Paul L. Caron
Dean




Thursday, October 29, 2020

Feds Throw Historic One-Two Punch At Offshore Tax Cheats

Wall Street Journal Tax Report, The IRS Reels in a Whale of an Offshore Tax Cheat—and Goes for Another:

U.S. tax officials have thrown a historic one-two punch at wealthy Americans hiding money offshore.

On Oct. 15, they announced that Robert Smith, the 57-year-old private-equity billionaire who founded Vista Equity Partners, admitted he criminally evaded taxes on more than $200 million of income from 2000 through 2015 by using secret foreign accounts in the Caribbean and Switzerland. Mr. Smith, who is famous for announcing at Morehouse College’s graduation that he would pay off student loans for the class of 2019, will pay $139 million to the Internal Revenue Service in taxes and penalties. He will also forgo claims to $182 million in deductions for charitable donations, which could add more than $65 million to what he owes the IRS. But he won’t be prosecuted.

At the same time, the U.S. officials charged Robert Brockman, a Houston-based billionaire and software CEO who was the sole investor in Mr. Smith’s first private-equity fund, with hiding about $2 billion of capital-gains income from the IRS in secret offshore accounts from 2000 through 2018. Mr. Brockman, 79 years old, pleaded not guilty and was released on $1 million bond.

The two cases are landmark events in a U.S. crackdown on undeclared offshore accounts that has been underway since 2009. Mr. Brockman’s alleged evasion of tax on $2 billion is the largest criminal tax prosecution ever brought, according to the Department of Justice, and Mr. Smith’s $139 million payment is among the largest made in connection with secret offshore accounts.

https://taxprof.typepad.com/taxprof_blog/2020/10/feds-throw-historic-one-two-punch-at-offshore-tax-cheats.html

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