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Chinese Income Figures in Case Against Californian

Date: 09/01/2024 Type: Articles Featured Article Topic: Private Client | Trusts | Wills and Estates | Inheritance | Next Generation Wealth | Investment and HNWI’s | Tax |

A man who worked simultaneously for employers on the West Coast and in the People’s Republic of China may be on the hook for failure to file FBARs, among other tax charges.

A federal grand jury in San Jose, California, has indicted local resident Chunsheng “Jay” Huang, 67, on charges of filing a false U.S. tax return and failing to file a Financial Crimes Enforcement Network (FinCEN) Form 114, “Report of Foreign Bank and Financial Accounts” (FBAR).

In a case pursued by the Internal Revenue Service and the Federal Bureau of Investigation, Huang is alleged to have been an employee of a company based in Milpitas, California, for more than 15 years while also working for companies based in the People’s Republic of China for at least six of those years.

The indictment alleges that Huang used an account with Industrial and Commercial Bank of China (ICBC) in his sister-in-law’s name to receive payments from two companies in China. The indictment also alleges that he failed to report that income on his federal tax returns for 2016 through 2020.

In addition to the obligation to report foreign income for tax purposes, the indictment alleges that Huang did not file a FBAR for 2019 and 2020, the form that U.S. citizens and residents must file if they have a financial interest in or signature or other authority over a bank account in a foreign country with an aggregate value of more than $10,000 at any time during a particular calendar year.

Huang has not made an appearance in the case; an arrest warrant has been issued.

If convicted, he faces a maximum sentence of three years of imprisonment, a $250,000 fine, a year of supervised release and a $100 special assessment for each count of violating 26 U.S.C. § 7206(1) (Making and Subscribing a False Tax Return); and 10 years of imprisonment, a $500,000 fine, three years of supervised release and a $100 special assessment for each count of violating 31 U.S.C. §§ 5314 and 5322(b) (Failure to File Report of Foreign Bank and Financial Accounts).

The case promises to be one of several lately that will test the definition of “willful” non-filing of a FBAR, the penalty for which is much more severe than for that of non-willful failure to file. Recent cases have hinged on factors as varied as to simple mistranslations to infamous historical circumstances surrounding the overseas accounts.

No matter the eventual decision, the U.S. government seems to be making good on its pledge to turn up the heat on failure to file FBARs.

Your tax specialist needs to stay on top of this and many other issues of wealth, foreign income and tax enforcement. If we can help, please let us know.

Authored by Alicea Castellanos, CEO and Founder of Global Taxes LLC

 

 

Author

Alicea Castellanos, CEO and Founder of Global Taxes LLC
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