As reported by local newspapers, a Hillsdale woman pled guilty to filing false tax returns and admitted she concealed more than $750,000 in an offshore account set up with her father with UBS AG. Lucille Jackson admitted that in her 2005 tax return she failed to report interest, dividends and capital gain income from a Swiss account that had been opened in her name and funded by her father in order to evade IRS reporting requirements. Of all the UBS tax evasion cases around the country, so far this is the lowest tax loss that anybody has been charged with. Omitted from her tax returns the year 2000 and 2007 was a tax loss of more than $5,000 but less than $12,000. In this case, the taxpayer faces up to three years in prison while her father faces five years in prison.
Interest and dividends earned on foreign savings accounts are reported on Form 1040, Schedule B. In addition, the taxpayer must file Form TD F90-22.1 (Report of Foreign Bank and Financial Accounts (FBAR)) annually by June 30th to report financial interest in, and other authority over, each foreign account – even if the account does not generate any taxable income – if the value of the account exceeds $10,000 at any time during the calendar year.
For those who have filed FBAR disclosures, this conviction may seem like a “surprise.” It comes as no surprise to me as Treasury has been extremely diligent in tracking down foreign accounts. This conviction is a “shout out” to all who have foreign accounts that they better comply, or else.