Tax Tips From Paul Manafort's Conviction

Robert W. Wood (Forbes), Tax Tips From Manafort Conviction That Might Keep IRS Away:

The conviction of former Trump campaign chairman Paul Manafort on eight counts of financial crimes nets the first conviction for Special Counsel Robert Mueller.

Political commentators on both sides are jabbering over this. They also have the guilty plea by former Trump fixer Michael Cohen to talk about. But aside from politics, there are some serious tax lessons here for everyone. And they are surprisingly simple.

The IRS wants you to report your worldwide income on your taxes, and (separately) to report your foreign accounts. That sounds simple, but there has long been temptation with hidden accounts. FBARs, the foreign bank account reporting form Manafort failed to file, have been required by law since 1970, so the requirement is hardly new. It is very easy for the government to win FBAR cases, and the penalties--both civil and criminal--are steep, worse than tax evasion. ...

The biggest lesson from Manafort? Declare all your income and your foreign accounts, and don't obscure or cover up the facts. ...

If you don't want to end up like Manafort, what other things do you want to avoid? Avoid setting up trusts or corporations to hide your ownership. Avoid filing some tax forms and not others. Avoid keeping two sets of books. Avoid telling your bank not to send statements. Avoid using code words over the phone. Avoid cash deposits and cash withdrawals. You get the idea. Even if you can explain one failure to comply, repeated failures can morph conduct from inadvertent neglect into reckless or deliberate disregard. That may have been part of Manafort's problem.