Latest news with #FBARs
Yahoo
08-05-2025
- Business
- Yahoo
Credit Suisse penalized more than $510 million for helping wealthy US clients evade taxes
The Department of Justice (DOJ) said Credit Suisse Services AG will pay more than $510 million in penalties for its part in aiding U.S. taxpayers in skirting the IRS through offshore accounts. The more than $510 million in "penalties, restitution, forfeiture and fines" that Credit Suisse Services AG must pay are part of a guilty plea and non-prosecution agreement that the now UBS-owned bank entered on Monday for "conspiring" to hide more than $4 billion worth of assets held by some rich clients via several hundred offshore accounts, according to the DOJ. Credit Suisse Services AG "conspired with employees, U.S. customers, and others to willfully aid U.S. customers in concealing their ownership and control of assets and funds held at the bank" during the 11.5-year period between January 2010 and July 2021, the DOJ said. The logo of Swiss bank Credit Suisse at its headquarters in Zurich on March 24, 2021. During that time, the bank allowed extremely wealthy U.S. customers to have "undeclared" offshore accounts and furnished them with "offshore private banking services" that facilitated hiding assets from the IRS and "continued failure to file FBARs," measures that violated a previous 2014 plea agreement, according to the DOJ. Credit Suisse's non-prosecution agreement, the DOJ said, centers on "undeclared accounts" for American taxpayers worth over $2 billion held at Credit Suisse AG Singapore from 2014 through June 2023. The DOJ said UBS "became aware of the accounts held at Credit Suisse AG Singapore that appeared to be undeclared U.S. accounts" after it acquired the rival bank and "voluntarily" supplied the DOJ with information on them. Read On The Fox Business App The Department of Justice in Washington, D.C., on Aug. 18, 2022. Credit Suisse Services AG and owner UBS have agreed to cooperate with "ongoing investigations" and provide any further information about U.S. accounts that may arise, as part of its guilty plea and non-prosecution agreement, according to the DOJ. In 2014, Credit Suisse became the largest bank in 20 years to plead guilty to a U.S. criminal charge, agreeing to pay a $2.5 billion fine for helping Americans evade taxes in a conspiracy that spanned decades. Chinese Community Leader-businessman In New York Convicted As Illegal Agent Of The Ccp In 'Fox Hunt' Scheme Before Monday's settlement, the U.S. Senate Finance Committee in 2023 had found Credit Suisse violated its 2014 deal made with U.S. authorities by continuing to help with tax evasion and concealing more than $700 million from the government. UBS said on Monday that Credit Suisse Services AG pleaded guilty to one count of conspiracy to aid and assist in the preparation of false income tax returns.
Forbes
13-04-2025
- Business
- Forbes
The Hendler Case: FBAR Penalties Survive Beyond Death
Death doesn't erase FBAR penalties. Noncompliant taxpayers leave a problem to their estate which ... More may simply inherit the liability. This leaves beneficiaries in a state of peril as well. A recent decision reminds taxpayers and the tax compliance community of the importance of filing the Report of Foreign Bank and Financial Accounts. The U.S. District Court for the Southern District of New York in United States v. Hendler, 23 Civ. 3280 (Sept. 17, 2024) has clarified the enduring nature of penalties tied to FBAR. The court held that FBAR penalties 'accrue' on the date the form is due (but fails to be filed) and not when the IRS assesses the penalties which might be years later and after the taxpayer has died. The court also determined that an individual's death does not extinguish these obligations or render them excessive under the Eighth Amendment. Adding another layer to the ruling, the court found that the government was not time-barred from assessing these penalties, thanks to the taxpayer's agreement, while still alive, to extend the statute of limitations. The Hendler case revolves around David Benishai, a U.S. citizen who held financial interests in multiple bank accounts in Israel from 2004 to 2010. Benishai failed to timely file FBARs as required by the Bank Secrecy Act. Mr. Benishai later filed delinquent FBARs and agreed to extend the statute of limitations for the IRS to assess penalties. He passed away a few months before the IRS finalized its assessment. Benishai's estate, administered by his wife Hanna Hendler, challenged the assessment of 'nonwillful' penalties which IRS had assessed at $10,000 per form per calendar year in line with the U.S. Supreme Court landmark decision. The estate argued that the FBAR penalties could not be enforced after his death, that the statute of limitations had expired, and that they violated constitutional protections. The district court rejected these claims, delivering a ruling with significant implications for taxpayers and their estates. A key element of the Hendler ruling was the court's determination that FBAR penalties 'accrue' on the date the FBAR form is due. What does this mean in practice? Unlike penalties that might depend on an agency's action such as an assessment, FBAR penalties are tied to the moment of noncompliance. For each year an individual fails to file an FBAR by its due date (now April 15 of the following calendar year, with an automatic six-month extension to October 15), a liability is created. This liability doesn't require the IRS to act immediately; it exists as a latent obligation from that due date onward. In Benishai's case, his FBARs were due annually between 2005 and 2011 for the calendar years 2004 through 2010. Because he was alive on those due dates and failed to file, the penalties accrued then and not at the later time after his death when the IRS assessed them. The court likened this to tax deficiencies, which arise by operation of law when a return is due but not filed, requiring no formal assessment. Even though Benishai died in 2021 and the IRS assessed the penalties posthumously, his FBAR liability had already crystallized years earlier while he was alive and failed to file the forms when due. This interpretation means the IRS can pursue these penalties against an estate long after the taxpayer's death, provided it acts within the statutory timeframe. While the IRS may face greater hurdles in FBAR penalty collection, it has various means to ensure payment. The estate argued that assessing the nonwillful FBAR penalties after Benishai's death extinguished the claim or violated due process and the Eighth Amendment's Excessive Fines Clause. The court disagreed. It found that FBAR penalties are primarily 'remedial', designed to compensate the government for the costs of investigating noncompliance and to enforce tax collection. FBAR penalties are not purely punitive and designed to punish the taxpayer. When a penalty is remedial in nature, the penalty can survive the taxpayer's death. Various precedent was cited by the Hendler court that supported this view, affirming that estates remain on the hook for accrued FBAR violations. As an aside, even 'willful' FBAR penalties have been found to be 'remedial' and survive death, despite the huge penalty amounts involved. The Eighth Amendment challenge that the penalties were excessive was also unsuccessful. The estate claimed any fine against a deceased person is inherently excessive, but the court found no legal basis for this blanket assertion. The court declined to rule definitively on whether the Excessive Fines Clause applies to FBAR penalties, but it made clear that death alone doesn't render a penalty unconstitutional. The estate's final defense was that the FBAR six-year statute of limitations barred the IRS' 2021 assessment. This argument was undermined by Benishai's own actions. The Bank Secrecy Act provides the government six years from the due date to assess FBAR penalties, but taxpayers can extend this period by agreement with the IRS. While Benishai was alive, he signed extensions pushing the deadline beyond his death to December 31, 2021. Since the IRS assessed the penalties in April 2021 this assessment was well within the extended window. The estate's argument that such extensions are invalid lacked supporting authority, and prior cases have consistently recognized their legitimacy. The Hendler decision reminds us that FBAR obligations don't vanish with the taxpayer's death. For individuals with unreported foreign accounts, the accrual of penalties on the due date means liability begins ticking the moment they miss a filing, whether the IRS catches it during their lifetime or not. Estates can inherit these debts, facing enforcement actions years later. If beneficiaries receive assets tied to unreported foreign accounts, they could inadvertently become entangled in ongoing compliance issues or audits, exposing them to further legal and financial risks. For tax pro's, wealth advisers and estate planners, the Hendler decision is a reminder to investigate potential FBAR liabilities when managing a decedent's affairs. Consider a taxpayer who failed to file an FBAR for a $50,000 Swiss account by April 15, 2018 (for the 2017 tax year), with the automatic extension expiring October 15, 2018. If they died in 2020 without extending the statute of limitations, the IRS could still assess a $10,000 penalty against their estate as late as October 15, 2024, six years from the due date. FBAR rules can be, and are, enforced beyond the grave. By tying penalty accrual to the FBAR due date and upholding penalty survival post-death, the Hendler court has closed loopholes that might have let estates escape a decedent's FBAR penalties that are not assessed during his lifetime. Taxpayers who are not compliant leave a problem to their estate which may simply inherit the liability. As foreign account scrutiny intensifies, this decision serves as both a warning and a call to action. There are many avenues to rectify FBAR noncompliance and often, without any penalty being imposed. Stay on top of tax matters around the globe. Reach me at vljeker@ Visit my US tax blog It is an invaluable guide in all areas of U.S. international tax. Stay on top of legislative developments and tax reform (including FBAR developments) and keep ahead of U.S. tax changes impacting your life, family or business.
Bloomberg
10-03-2025
- Business
- Bloomberg
Ex-Credit Suisse Client Pleads to Hiding $90 Million From IRS
A former Credit Suisse Group AG client pleaded guilty to a tax evasion conspiracy in which she and family members concealed $90 million from the Internal Revenue Service through undeclared accounts in Switzerland, Israel, Andorra and Panama. Gilda Rosenberg, a Florida businesswoman, admitted Monday in Miami federal court that she conspired to defraud the US, evade taxes and fail to file foreign bank account reports, also known as FBARs. Her family held about 15 accounts at Credit Suisse — now owned by UBS Group AG — between 1979 and 2013, according to a 27-page statement of facts in the case.
