In many marriages one spouse takes care of the finances. Whether it is for ease or because of understanding, the bills are often paid, the investments made and the assets controlled by one and not both partners. When the spouse with the financial responsibilities dies, it can be a very confusing task for the other. In many cases, the other spouse may not even be aware of some assets held by the couple let alone the tax consequences involved with them or a spouse’s underrporting of certain assets.
For a 79-year-old widow, it was no different from what is described above. After her husband died she was tasked with handling the finances and even inherited a few accounts that had been taken out in her husband’s name. One of these was an offshore account that eventually led to charges of tax evasion for the elderly woman.
The offshore account was not only opened by her late husband, but was completely controlled by him up until his death. Eventually, the widow became aware that there may be some tax issues surrounding the inherited account. She immediately hired an attorney in the attempt to notify the IRS of the possible issues and to seek quick resolution.
While the woman was taking the necessary steps to resolve the situation, she was unaware of a settlement between the federal government and UBS — the Swiss banking giant where the account was held — had resulted in a list of all offshore accounts held by the bank. The woman was charged with tax evasion.
During the trial, evidence of the woman’s actions to notify the IRS and a lifelong history of philanthropy were presented. This evidence and the fact that she had paid any back taxes as well as several fines resulted in a probation sentence of one year that was nearly immediatley suspended.
In situations such as this one, consulting a Minneapolis attorney as soon as a taxpayer becomes aware of a possible issue can make a measurable difference in the outcome.
Source: USA TODAY, “From 2 tax-evasion sentences, a lesson comes,” Kevin McCoy, April 25, 2013