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Manafort & Gates faces MORE criminal charges for failure to file an FBAR

by: Anthony Parent   2018-02-22

UPDATE: In a 77-paragraph indictment, Special Prosecutor Robert Mueller announced on February 22, 2018 that even more FBAR and Bank Secrecy Act criminal charges against Paul Manafort and Robert Gates for conduct that preceded their involvement in the 2016 president election. Today’s news that a Grand Jury returned an indictment against Paul Manafort and Richard Gates confirms my observation that too many high profile individuals are still not filing FBAR forms at significant risks. While many have learned that FBARs can result in significant civil penalties, today’s indictment reminds us that there can be criminal charges for failing to file an FBAR as well. In this article, I'm going to answer what an FBAR is, the uphill road Manafort and Gates have, and what steps to take if you should have filed an FBAR but did not.

 

 

 

 

Manafort and Gates are facing FBAR criminal Criminal Charges

Failing to file an FBAR alone with no other crimes involved includes a civil fine (discussed below)  and prison exposure of up to five years. If they violated FBARs and are convicted of some other related crime (as Manafort and Gate are alleged to), they can face up to 10 years in prison.

 

If it either of their's actual money an FBAR is required if they controlled the account

An FBAR is required to be filed if you control the funds or if you have a financial interest in the account. Even if your name is not formally attached, you may still have an FBAR requirement. When the law was passed, it was anticipated that proxies and strawmen would be utilized to avoid reporting.

 

What is an FBAR?

An FBAR form is a Report of Foreign Bank Accounts, FinCEN Form 114, and TD F 90.22-1. It is now required to be filed electronically by the October 15th tax deadline.

 

The FBAR form is authorized by the Bank Secrecy Act of 1970. The FBAR used to be administered exclusively by the Financial Crimes Enforcement Network (FinCEN), but now there is a split of responsibilities between FinCEN and the IRS. FBAR reports are filed with FinCEN, and the IRS is typically in charge of assessing FBAR penalties for non-filing.

 

Civil FBAR penalties that Manafort and Gates face

There are two types of civil FBAR penalties. Non-willful and Willful.

 

Non-willful penalties are $10,000 per occurrence. However, if you present evidence to the IRS that you had a reasonable cause, you may argue for something as benign as a warning letter. A Willful FBAR penalty is 50% of the account balance on the date of violation. The penalty can be smaller if the balances were under $1.0 million and penalty mitigation guidelines apply. However, for Manafort and Gates, these mitigation guidelines will not apply, as the accounts they are alleged to have controlled are well over $1.0 million.

 

They may each be facing a 50% penalty for the accounts they controlled or had a financial interest in, along with jail time.

 

If you are concerned about your own FBAR filings or lack thereof

If you have not filed an FBAR we suggest reviewing our FBAR Frequently Asked Questions and Answers to see if some sort of FBAR Amnesty program can apply.

 

As for practitioners, Attorney Hanson and I will be joined by Dennis Brager, Esq. for a CLE about how to handle FBAR and other international reporting form penalties this Wednesday, Novembr 1st. You can find information here

 

Contact us to schedule a consultation to get details about how your particular case can be handled. Any information you share with us will be kept confidential. 888-727-8796 or info@irsmedic.com.

 

Link to Indictment:

United States of America v. Paul Manafort and Richard Gates III.
 

 

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