In a recent statement, his attorney announced that the billionaire would be pleading guilty to the charge of tax evasion. This will cost the Beanie Babies founder more than $53 million in penalties. He is one of a few other people on Forbes 400 list to plead guilty to this offense in recent years. Number 209 on that list, Ty Warner is the 69-year-old maker of the stuffed animals that so many people have avidly collected. According to Forbes, he is worth $2.6 billion.
The guilty plea would be to one count of tax evasion, part of a plea agreement that has been reached in the case. The charge was leveled at Mr. Warner based on the discovery of hidden Swiss accounts where he had funneled some of his money. He did not report the income received from these accounts. In all, he failed to pay the IRS $1.2 million that were owed. According to the plea deal, he will now be paying over $53 million in FBAR penalties.
Tax evasion can demand criminal penalties of as much as 5 years in prison, and up to $250,000 in fines. Then there are back taxes, interest, penalties, and then civil fraud penalties on top of it all. The FBAR penalties can be the highest of all. These are civil penalties for money laundering, and can demand as much as 50 percent of the secreted amount.
It does not take being on the Forbes 400 to face tax evasion charges though. Perhaps you already know this. The tax code is so complex, that many people find themselves making costly mistakes. If you have offshore accounts, and you did not report interest or file FBARs, then you may be in trouble with the IRS. Even for more modest incomes, you can face criminal charges and their serious penalties if do not pay the full amount owed in taxes. If you have been charged with tax evasion, it is vital that you immediately discover what you are facing, and the possible defenses against this serious charge.
First off, if you have these charges leveled at you, a prosecutor can only turn this into a conviction if he or she can prove that you did not pay all your taxes (tax deficiency), and that this was purposeful. For the first criteria, it often takes missing a "substantial" amount of tax payments to be charged. This amount is subjective though, as any missed taxes will technically justify this charge. Tax deficiency is assessed by how much has not been paid, not by how much income you are said to have not reported.
The prosecution is likely to be without the hard proof of your tax records, so they are likely to use circumstantial evidence. This can mean pointing to your net worth, how much you have in banking accounts, and any cash payments they can trace. In order to counter this evidence, a defense lawyer may be able to show that you the taxpayer have some tax exempt income. More simply, your attorney may be able to demonstrate that the charges are based off of miscalculations, and that you in fact have no tax deficiency.
Even if a prosecutor is able to establish that there is a deficiency, he or she will have to further prove that you were intentional in not paying. The thing is, you cannot be convicted for slipping up, or being ignorant of what was owed. So a prosecutor would have to prove you gave false returns, kept income or assets a secret, put property under someone else's name, erased records, etc.
Few legal matters are more of a nightmare than the tax code. Criminal law is complex enough on its own. When the two are entangled, this can make for a difficult case. When your reputation and freedom could be on the line, you need a criminal defense attorney who can handle all aspects of your charge. Whether you have been charged, or whether you are being probed about a tax offense, you would benefit from finding a qualified lawyer immediately.
