Real Case-Prosecution for Filing False Tax Returns and Failing to File Report of Foreign Bank and Financial Accounts (FBAR).
In November 2022, a U.S. citizen in California was indicted by a federal grand jury for filing false tax returns and failing to file a report of foreign bank and financial accounts (FBAR).
The indictment was unsealed in October 2023.
According to the indictment, the accused is an employee of a company in California and has also worked for China companies for at least 6 years. However, he used an account of Industrial and Commercial Bank of China (ICBC) in his sister-in-law’s name to receive payment from two China companies and he didn’t report that income on his federal tax returns from 2016 to 2020. The indictment also alleges that the accused failed to file FBAR for his ICBC account for 2019 and 2020.
The indictment only alleges crimes have been committed. If convicted, the U.S. citizen would face the following penalties:
(1) Making and subscribing a false tax return: up to 3 years of imprisonment and a fine up to $250,000.
(2) Failure to file a report of foreign bank and financial accounts (FBAR): up to 10 years of imprisonment and a fine up to $500,000.
USCPA Sophie Luo (羅霞) reminds you that U.S. citizens, green card holders, and U.S. tax residents are required to report their worldwide income to the Internal Revenue Service (IRS) and if the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the calendar year, there is an obligation to file a Report of Foreign Bank and Financial Accounts (FBAR) to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury.
Read more:
2023 U.S. FBAR Penalty Adjustments
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