A tax court has ruled in favor of the Internal Revenue Service in a case involving offshore tax evasion by former Mobil senior executive Bryan Williams.
The Fourth Circuit Court of Appeals ruled that Williams violated federal tax law
by concealing more than $7 million in two foreign accounts between 1993 and 2000. Court documents reveal that the former executive opened two Swiss offshore accounts to hide his financial activities. More specifically, Williams was accused and convicted of purposely failing to fill out Foreign Bank and Financial Accounts forms, also known as Fbars.
The reporting requirement was inserted into federal law decades ago, but the widening tax gap has prompted the IRS to become more stringent about these regulations in recent years. Further, the IRS has been petitioning for more financial resources to expand its tax evasion programs in an effort to catch and prosecute lawbreakers.
The recent ruling struck down a 2010 court decision in Alexandria, Virginia, that ruled in favor of Williams and set the IRS back in its efforts to curb tax evasion. Williams was convicted in a separate case involving fraud and conspiracy in 2003, to which he plead guilty. In light of his previous conviction, two judges on the three-panel court had strong remarks for Williams.
“Williams cannot now claim that he was unaware of, inadvertently ignored, or otherwise lacked the motivation to willfully disregard the Fbar reporting requirement,” they wrote.
The IRS will now impose heavy penalties on Williams for his crime. According to Justice Department rules, willful failure to submit Fbar forms can result in $100,000 in penalties per instance or 50 percent of the account balance for each year of evasion. These penalties are assessed in addition to back taxes and interest.