Wednesday, June 28, 2023

Jury Finds That Oregon Taxpayers Failure To File FBAR Wasn't Willful!

According to Law360, prosecutors didn't meet their burden to prove that an Oregon couple willfully failed to disclose their Iranian bank accounts for 2011 to the IRS, a jury found, handing the couple a win after a federal court previously concluded that they intentionally neglected to report other accounts.

A Jury Found That Federal Prosecutors Didn't Convincingly Prove That Ali Mahyari And Roza Malekzadeh Intentionally Failed To Disclose Their Iranian Bank Accounts For 2011
 To The Internal Revenue Service.

The Oregon federal court in 
U.S. v. Ali Mahyari et al., case number 3:20-cv-01887, in the U.S. District Court for the District of Oregon, had sent the issue to a jury after concluding that the couple had willfully failed to report accounts they had in Canada, as well as Iranian accounts for years other than 2011.

Mahyari and Malekzadeh became U.S. citizens in 2006 after moving from Iran, the court said in an order in January. They had been trying to transfer to the U.S. money they had made from the sale of a property in Iran when that country was hit with sanctions, which complicated their transfer efforts and meant they were leaving money back in Iran. 

The IRS eventually began investigating whether the couple properly filed Reports of Foreign Bank and Financial Accounts for 2011, 2012 and 2013, the order said. In that order, the Oregon federal court concluded the couple intentionally failed to comply with their FBAR requirements for all three years for their accounts in Canada with the Canadian Imperial Bank of Commerce.

Evidence indicates that the couple used the Canadian accounts to surreptitiously send money from Iran to the U.S., the court said in granting the U.S. summary judgment on the issue. They failed to discuss those accounts with the tax professional who prepared their returns, the order said, and they repeatedly told an IRS agent that they had already reported all their foreign accounts.

Mahyari And Malekzadeh Also Recklessly Failed To Comply With Their Reporting Requirements For Their Accounts In Iran With Eghtesad Novin Bank For 2012 And 2013, The Court Said.

That they didn't ask their attorney or the person filing their returns about their foreign bank account reporting requirements suggests that they "made a conscious effort to avoid learning about their reporting requirements," the court said.

But The Court Declined To Come To The Same Conclusion For Their Iranian Accounts For 2011, Sending The Issue To The Jury.

It's not clear that their failure to file an FBAR for that year was intentional, given that a jury could find that the couple had initially been somewhat honest with their tax professional about their holdings in Iran, the order said.

Have Undeclared Income from an Offshore Bank Account?
Been Assessed a 50% Willful FBAR Penalty?
Contact the Tax Lawyers at 
Marini& Associates, P.A. 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243

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