An #FBAR story with a happy ending http://t.co/IBkI5cmnju – Judge frees Curran and criticizes prosecutors. But massive #FBAR penalty!
— U.S. Citizen Abroad (@USCitizenAbroad) April 26, 2013
You may recall that this was the 79 year old woman who was coerced into paying the 50% FBAR penalty on her offshore accounts. The tweet references the post at Jack Townsend’s blog which includes:
U.S. District Judge Kenneth Ryskamp sentenced Mary Estelle Curran of Palm Beach to one year probation Thursday on tax charges, before revoking the sentence five seconds later and sending her out of the courtroom a free woman.
Ryskamp chastised the government for prosecuting the 79-year-old woman when 38,000 other people in the same situation were given amnesty.
* * * *\
“Based on these facts, did it ever occur to the government to dismiss these charges,” Ryskamp said. “Instead, the government decided it had to make a felon out of this woman?”\
Mark Daly, from the Department of Justice Tax Division, told Ryskamp that Curran’s husband, Mortimer, was a “very wealthy man” and shouldn’t have turned to a foreign national for an interpretation of U.S. Law.”
$23 million penalty should have been enough, but Hubris gets in their way!
23 million penalty is extortion. The government shouldn’t be able to just take your money from you like that. It makes profligate government into the criminal, not the little old lady who lives frugally.
This is the type of case that makes me glad that I don’t live in the US any more. I am a proud former American.
This woman was a whale not a minnow. Very few lessons can be learned for Brockers.
whale? No statement of where the Money came from, only that it wasn’t in USA. The only taxes she might have avoided were interest—–as petty as anyone else.
The only difference is proportionality.
Just add to it that no person who is not approved to be rich, cannot be allowed to remain rich.
For her, “rich” is a high dollar amount. For someone who lives outside USA, “rich” is any person saving responsibly for retirement.
I don’t think that someone who is wealthy is for that reason a “whale”. The question here is about what this little old lady intended. Was she willful violator of FBAR rules (which are by the way, a violation of her constitutional rights)? If she wasn’t willful, then she wasn’t a whale either.
And don’t forget the argument “a fortiori”: If an injustice is done to a little old lady, who is wealthy but lives in the United States, how much more is an injustice perpetrated against American citizens abroad who are not wealthy. This means there is actually very much to learn from this case and the judges harsh words against the Obama government. Receiving a pardon is the constitutional solution to this FBAR conundrum that I suggested many months ago on these pages.
I agree, the criteria for being a whale isn’t how big your bank accounts are, it’s whether you intended to hide them from the IRS or Treasury. The burden of proof lies with the accuser.
I jave nothing against FBARS if this is to avoid people from hiding bank accounts in foreign countries, But if there will be amnesty, everyone should be invited to start reporting their bank accounts in foreign banks and continue to do so. Ther great majority never heard of it. And Americans Living Abroad should have a different treatment because they have no choice but have “foreign” bank acounts and by being way they have lee chances to learn about the need for FBARS. But no, it seems that the main goal of FBARS was to set traps for people, with stiff penalties that do no apply to Americans in the mainland.
FBARS are fine for stateside Americans, but Americans living abroad shouldn’t be bothered with such.
I figure she paid top dollar for an excellent lawyer to defend her; that tragic Patricia in Canada who lost over $78,000 in OVDP miscellaneous Fbar penalty plus $23,000 in legal fees was not poor but also not wealthy or well-connected enough to get decent legal protection. She also felt too intimidated by the IRS to defend herself. She was ripe pickings: a naive, vulnerable pensioner. The whole thing makes me sick
Who among you is naive enough to think that this lady’s husband had 46 million in a UBS account without the intention of hiding it?
whether or not she is a whale, there is still nothing in this story of much use to brockers except the pure unadulterated joy of IRS bashing.
@Kalc, what I can’t get over is the contrast.
1. Her husband who set up the accounts was not charged. The widow was. They are different people.
2. The criminal side of this is the DOJ and not the IRS.
3. “Not much to this story except the pure unadulterated joy of IRS bashing”?
I disagree very strongly. An incredible injustice has been done and these injustices continue. The recognition of this injustice is of use and interest to everybody including “Brockers”!
The amount of money in the the account is irrelevant to whether non-compliance is willful. The 50% penalty is the penalty for willfulness. But accounts with large balances provide incentives for the extortion of large penalties and therefore incentives to allege willfulness. The US government is using the FBAR as a fundraiser.
The 21 million fine bears NO relation whatsoever to the “so called crime”. The legal test for willfulness is:
The intentional disregard of a known legal duty.
This is an elderly woman who may have had little knowledge of her husbands affairs. Even if she knew of the FBAR, she may not have known of a legal duty to file the FBAR. The knowledge of a duty to file the FBAR is irrelevant to whether those accounts were used for tax evasion. If this had gone to trial, (in the absence of overwhelming direct evidence) the government may not have been able to prove the elements of this offense.
Therefore, it is likely that she was terrorized into turning 21 million over to the IRS. Why? For not filling out a form.
They then have the audacity to threaten this woman with a criminal prosecution. A criminal prosecution. Threats of jail, etc. Thank God for this judge who had the courage to say “enough is enough”.
FYI, the Husband has been dead for more than ten years more like fifteen years. Supposedly the husband never shared any details of his finances with the wife before he died. Additionally the wife I don’t believe even had a high school education. Do I believe the husband was a tax cheat yes but the husband is long dead and the statute of limitations has long expired.
Your first clue should have been, in your own words, “this lady’s husband”.
I personally would be interested in hearing stories that cast the IRS in a better light. It gives me hope, please share.
I agree, it never serves anyone well to make generalizations.
I really don’t understand this at all. She freely came forward and was then smacked down. Either way there’s a massive penalty, so much, for $23 million, I’m fairly certain you can just ditch the US, buy a citizenship somewhere far nicer and burn that US passport. It’s far easier to live far nicer on that money pretty much anywhere in the world… except for the US obviously, where the entire culture is geared towards finding ways to steal it all.
Here is the plea agreement and the statement of facts in the Curran case. Those who can stomach this may find it interesting. Lot’s of emphasis on the fact that the existence of the offshore accounts were not disclosed on schedule B. Very small amounts of tax owing.
Paragraph 12 of the plea agreement merely says that she agrees to pay the 50% penalty.
With respect to the statement of facts:
1. She doesn’t agree to the facts, she agrees to NOT contest the facts and STIPULATE (which I don’t understand to be agreement) …
2. It says that she failed to disclose the “offshore accounts” (not that she willfully failed to disclose them). This is significant because in the paragraph before she stipulates that she willfully failed to disclose the income from the accounts.
3. It says that she willfully failed to report the income and accounts to the accountant doing the returns.
Conclusion: I don’t believe that the “statement of facts” supports a finding that failure to file the FBAR was willful.
I.e. It doesn’t say she knew of FBAR, doesn’t say she knew it was a legal requirement to file FBAR. In short this statement of facts does not (it seems to me) convincingly justify the finding that her failure to file the FBAR was:
The intentional disregard of a known legal duty.
I am not defending the IRS but it seems to me that she had a CPA he most have told her about the FBARS in case she had money in a foreign bank because he had to answer in 1040 if she had a foreign bank account. Otherwise he would be responsible for not answering or answering it wrong.
You may be right. The point I am making is that the statement of facts don’t seem to support the finding of willfulness. Willfulness requires that she knew of a legal duty to to file the FBAR. That element is missing from the statement of facts.
This seems to be me to more “extortion” than the intentional disregard of a known legal duty.
Laura Saunders wrote about it in the WSJ.
The first sentence sets the tone for the rest of the article: “U.S. courts are doling out more lenient punishment to tax evaders hiding money offshore than to other tax cheats.”
Incidentally, Saunders is also the one who writes the WSJ’s articles about the Federal Register “name and shame” list. (And dutifully parroted the “45” nonsense last quarter without any sign of being willing to question the absurdity or look more deeply into the evidence).
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