Forensic Accounting 2 Discussion Boards (Graduate level)

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Question 1:

Fact patter: Taxpayer was born in France. He studied marketing in Paris. In 1990, he began working for a foreign corporation based in Switzerland that required him to open a bank account in Switzerland. He had his paycheck deposited into the Swiss account. In 2002, he immigrated to the United States and he began his own consulting company. The consulting company provided services to clients in the United States and overseas. His US based clients made payments to him in a corporate bank account in the United States. His foreign clients made payments to his foreign bank account opened in Switzerland. From time to time, Taxpayer would transfer monies from his Swiss bank account to his American bank account. Taxpayer prepares his own tax returns. From 2002 until 2014, Taxpayer reported 100% of the income he received from his United States clients; however, he only reported as income the monies that were transferred from Switzerland to the United States for his foreign clients. Taxpayer answered no on his tax return when asked if he has a bank account outside of the United States. Taxpayer also failed to file Foreign Bank Account Reports (FBARs). Taxpayer was audited in 2008 for tax years 2005 and 2006 and no changes were made to his tax return. (First, make the argument that Taxpayer acted willfully in not disclosing all of his foreign income and his foreign bank account. Second, make the argument that Taxpayer DID NOT act willfully. Third, you are the judge. Which argument is stronger? (50 points))

Question 2:

During the semester, you have become familiar with various laws, policies, and overall procedures involved in the criminal tax world. Now, put on your two hats as a CPA in the real world: one as a return preparer and one as a forensic accountant. The first part of the question is, as a return preparer, given what you now know, what are some safeguards and procedures you will put in place in order to protect yourself from any criminal exposure? Secondly, as a forensic accountant, what are some strategies you can now employ in terms of ensuring you are value-added to a team in terms of defending a criminal tax case (working with a lawyer).

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