Facts

Gregory Wasserman was a United State citizen who had a financial interest in or signature authority over three foreign certificate-of-deposit financial accounts at the FirstCaribbean International Bank (FCIB) in Grand Cayman, Cayman Islands, during the 2010 and 2011 calendar years. He has held an FCIB account in the Cayman Islands since 1998 and closed an FCIB account in the Caymans in 2003, receiving a check close to $1,300,000 before using that money to open another offshore financial account in 2006. At times during 2010 and 2011, Wasserman's FCIB account held more than $1.5 million. In 2010, Wasserman requested that his attorney assist him in repatriating the funds in his FCIB account from the Cayman Islands into the attorney's client-trust account at Bank of American in Concord, California. Between 2011 and 2012, Wasserman transferred at least $1,554,192 from his FCIB account to his attorney's client-trust account. Wasserman's attorney used certain funds from the FCIB account to purchase a single-family residence in Camarillo, California, and transferred the remaining funds to a domestic bank account owned by Wasserman. The Camarillo property was titled in the name of Viceroy Leasing, Inc., a Nevada corporation for which Wasserman's attorney is the registered President, Secretary, Treasurer, and Director. Wasserman has used the Camarillo property as his primary residence. Wasserman filed Forms 1040, U.S. Individual Income Tax Return for the 2010 and 2011 tax years and signed the form under penalty of perjury, averring that the return and accompanying schedule were true and correct. On March 9, 2023, the United States of America at the direction of the Attorney General of the United States and at the request of and with the authorization of the Chief Counsel of the Internal Revenue Service, a delegate of the Secretary of the Treasury of the United States, brought a complaint to reduce civil money penalties to judgment against Wasserman.

PLAINTIFF'S CONTENTIONS: Plaintiff alleged that defendant willfully did not timely file Treasury Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) with the IRS by the deadline of June 30 that year and did not disclose to the IRS on his 2010 schedule B that he held a financial account in the Cayman Islands. Further, plaintiff contended that both defendant and his attorney knew of the FCIB account but did not report any of the income associated with the account on his 2010 or 2011 tax return. Thus, plaintiff argued they were entitled to $72,873 in penalties, with $68,326 in FBAR penalties, $3,897 in late-payment penalties, and $650 in interest.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Result

The court entered judgment for plaintiff in the amount of $12,500.