Foreign accounts and the IRS

Estimated Reading Time: 2 minutes 51 seconds

There is currently a trial underway that is drawing a substantial amount of publicity and not just because it relates to a wealthy individual running afoul of the complex US Tax code. 

While Mr. Manafort is garnering a lot of publicity because of who his past associations have been and where they are from, his trial is focusing on some rather mundane financial issues/crimes.

One of the key elements of the case against Mr. Manafort is the lack of proper reporting of foreign income or control over foreign bank accounts. The failure to follow the rules on these two issues can be very costly and in 2018 is something the US government can and will pursue.

Consider that the penalties reach around $10,000 and climb from there and there is an incredible paper trail that can be easily followed in most cases and it is no wonder that the US government pursues these cases with vigor.

Now that Mr. Manafort’s accountant and tax advisor has testified about how he answered the questions related to foreign accounts for US tax purposes, it will be interesting to see how his defense team responds. Ignorance of the law has typically not worked well as a defense in these cases, especially when the prosecution has provided evidence of extensive use of foreign accounts by the defendant for regular and exotic purchases.

For anyone getting nervous about their foreign holdings or wishing to avoid a Manafort spectacle trial experience, GP CPA is only an email or call away.