11.10.11 | Articles

Fifth Amendment and Government’s War on Offshore Accounts

New York Law Journal

Under Treasury Department regulations, taxpayers are required to keep records relating to accounts they maintained at foreign financial institutions. Faced with a subpoena for such records, a taxpayer who did not disclose a foreign account on his income tax returns and on FBARs faces a difficult dilemma: producing the records will demonstrate that his previously filed returns were false, while denying that he has the records could subject him to prosecution for failure to keep required records. This article discusses two recent decisions--one out of the Ninth Circuit and one from the United States District Court for the Southern District of Texas--addressing taxpayers' assertion of their rights under the Fifth Amendment in response to such subpoenas.

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