Beanie babies get justice

March 06, 2014 by Carol Thompson, EA
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Taxpayers frequently ask, “Why do I pay so much in taxes, and other people are getting away without paying any?” Well, not always. In a recent case of tax evasion, Ty Warner, the creator of “Beanie Babies” was hit with $53.6 million in penalties for hiding money offshore. He stashed $93.6 million in a secret Swiss bank account, which generated about $3.1 million in foreign income earnings, and would have been taxed for $885,300. Normally, if someone inadvertently left investment income off of a return, they would be subject to an accuracy-related penalty of 20% of the additional income tax. With the new, aggressive Federal program (to make sure all Americans pay their fair share), the penalty for not reporting foreign investment income is 50% of the high balance of the account. Hiding money in another country goes on around the globe. The U.S. government is currently negotiating treaties with dozens of countries to report income to one another and stop the flow of untaxed money. So yes, sometimes there is justice in our system. Maybe Ty can go online and sell a few dolls to pay his debt.

Tags: income, IRS, tax scams

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