We originally posted about US taxpayers with undeclared income from Israeli Bank Accounts on Thursday, September 8, 2011 "More Tax Problems for U.S. Citizens with Foreign Bank Accounts in Israel" and more recently on Monday, March 11, 2013 "IRS Targets Israeli Banks and Their US Client;" now we have come to discover that Aaron Cohen of Encino, Calif., pleaded guilty Thursday,August 28, 2013 in the U.S. District Court for the Central District of California to conspiracy to defraud the United States. Cohen, a U.S. citizen, maintained undeclared bank accounts at two international banks headquartered in Tel Aviv, Israel, identified in court documents as Bank A and Bank B, according to the Justice Department and the Internal Revenue Service’s Criminal Investigation unit. One of Cohen’s undeclared accounts was maintained at a branch of Bank A located in the Cayman Islands.
- Last month, Moshe Handelsman pleaded guilty to filing a false tax return.
- On March 29, 2013, Zvi Sperling, pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained in Los Angeles at branches of Bank A and Bank B that were secured by funds in undeclared bank accounts in Israel.
- On May 21, 2013, Guity Kashfi, pleaded guilty to conspiring to defraud the United States in connection with back-to-back loans obtained from branches of Bank A and Bank B in Los Angeles that were secured by funds in undeclared bank accounts in Israel and Luxembourg.
- Alexei Iazlovsky of Potomac, Md., pleaded guilty on July 2, 2013 in the U.S. District Court for the Central District of California to filing a false tax return for tax year 2008.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial
account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns, the Justice Department noted.
In addition, U.S. citizens and residents must file a Report of Foreign Bank and Financial Reports, or FBAR, with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Cohen faces up to 5 Years in Prison and a maximum fine of $250,000.
He has agreed to pay a civil penalty to the IRS in the amount of 50 % of the high balance of his undeclared accounts for failing to file FBARs.
Read more at: Tax Times blog