John Bullis: Catching and punishing foreign bankers who avoid paying taxes

A U.S. judge sentenced two former Credit Suisse Group AG bankers to five years of unsupervised probation and ordered them to pay fines of $100,000 and $125,000, respectively.

Andreas Bachman and Josef Dorig pleaded guilty to helping U.S. customers evade taxes by using Swiss bank accounts.

They both pleaded guilty to conspiring to defraud the U.S. Internal Revenue Service. This was all part of a long time probe by U.S. officials into Americans who hid some of their assets in Swiss bank accounts to avoid paying taxes. The bank also pleaded guilty of helping Americans avoid paying taxes and the bank agreed to pay a fine of $2,500,000,000 — that’s $2.5 billion.

The two former bankers agreed to come to the U.S. to face the charges. They were indicted along with several other bankers, all of whom remain abroad.

The clients did not routinely receive statements. They were afraid the documents (monthly reports) could be seized by the government. For the years 1994 through 2006, the bankers would travel to the U.S. and meet with their clients in hotels or other places to show the clients the account statements.

Both of the bankers expressed remorse for their actions.

The attorney for one of the bankers said “ ... the U.S. should be focusing on prosecution of the Americans who dodged taxes. The system is clearly broken, stacked and unfair to foreign bankers and trust company officials ...”

IRS has suffered some reduction in the budget, added duties and responsibilities (Affordable Healthcare Act) and still assigned agents to follow up on discovering the foreign bank accounts a few taxpayers used to evade (cheat) on their taxes.

The reporting of foreign bank accounts has been on Schedule B of form 1040 for many years. Failing to answer the questions at the bottom of the page is a serious mistake.

The reporting of foreign bank accounts is complicated. If you have a significant foreign account, be sure to answer the questions on Schedule B correctly, and if required, file the various required forms with the details of the account identification, balances, etc.

Do you remember Al Capone was finally sent to jail for having foreign bank accounts and not reporting them? It was something the government could easily prove.

Did you hear? “Happy is the man who has learned to hold the things of this world with a loose hand,” Warren Wiersbe.

John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs.