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Restaurateur receives jail time for hidden, Swiss accounts

Rowen Seibel, a well-known restaurateur, was sentenced to one month of jail time and 300 hours of community service for hiding more than $1 million from the IRS. He hid the funds by using a secret Swiss bank account and Panamanian shell company.

It may seem like Mr. Seibel got away easy, as federal guidelines for this type of tax evasion call for 12 to 18 months in jail. He suffered far more than others, however, when you consider that more than 54,000 Americans with undisclosed Swiss accounts avoided jail time altogether through an amnesty program.

What was the difference? After seeking amnesty, Seibel secretly moved funds from his Swiss account to another secret account - a big mistake in the eyes of the IRS.

Instead of being open and honest with the IRS about all accounts, Mr. Seibel moved $1.3 million to a separate Swiss account and set up a Panamanian shell company. He essentially signed up for the IRS amnesty program and then immediately took actions that could be viewed as additional tax evasion.

The Rowan Seibel case is at the tail end of a massive crackdown on secret Swiss bank accounts, resulting in heavy fines for Swiss banks, more than 150 cases against account holders and the recovery of billions of dollars.

Jail time has been pushed for many of these cases, including Mr. Seibel's.

“This is an offense that can’t just be disposed of like a business debt as a cost of doing business,” U.S. District Judge William Pauley said during Seibel's sentencing.

Despite the push for harsher sentencing, U.S. prosecutors have not always been successful, even for cases that are larger than the one against Mr. Seibel. H. Ty Warner, the creator of Beanie Babies, is a good example. He was sentenced to probation and community service for evading almost $5.6 million in taxes.

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Friday, November 18, 2016

Chaya Kundra will be a panelist at the New England IRS Representation Conference on Preparer Penalties.

Preparer Penalties: Everything You Need to Know! Over time the IRS has increased its focus from individual taxpayers to tax preparers. When the IRS identifies a pattern of false or fraudulent returns, it does not hesitate to impose penalties on the return preparers. This panel will walk you through the various penalties and what preparers need to know to protect themselves.

Moderator: Amanda Evans, Green & Sklarz LLC, New Haven, CT

Panelists: Chaya Kundra, Kundra & Associates, Rockville, MD, Barbara Kaplan, Greenburg Traurig, New York, NY

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