CHINESE INCOME FIGURES IN CASE AGAINST CALIFORNIAN

By January 4, 2024 No Comments
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Chinese Income Figures in Case Against Californian

 

A man who worked simultaneously for employers on the West Coast and in the People’s Republic of China may be on the hook for failure to file FBARs, among other tax charges.

A federal grand jury in San Jose, California, has indicted local resident Chunsheng “Jay” Huang, 67, on charges of filing a false U.S. tax return and failing to file a Financial Crimes Enforcement Network (FinCEN) Form 114, “Report of Foreign Bank and Financial Accounts” (FBAR).

In a case pursued by the Internal Revenue Service and the Federal Bureau of Investigation, Huang is alleged to have been an employee of a company based in Milpitas, California, for more than 15 years while also working for companies based in the People’s Republic of China for at least six of those years.

The indictment alleges that Huang used an account with Industrial and Commercial Bank of China (ICBC) in his sister-in-law’s name to receive payments from two companies in China. The indictment also alleges that he failed to report that income on his federal tax returns for 2016 through 2020.

In addition to the obligation to report foreign income for tax purposes, the indictment alleges that Huang did not file a FBAR for 2019 and 2020, the form that U.S. citizens and residents must file if they have a financial interest in or signature or other authority over a bank account in a foreign country with an aggregate value of more than $10,000 at any time during a particular calendar year.

Huang has not made an appearance in the case; an arrest warrant has been issued.

If convicted, he faces a maximum sentence of three years of imprisonment, a $250,000 fine, a year of supervised release and a $100 special assessment for each count of violating 26 U.S.C. § 7206(1) (Making and Subscribing a False Tax Return); and 10 years of imprisonment, a $500,000 fine, three years of supervised release and a $100 special assessment for each count of violating 31 U.S.C. §§ 5314 and 5322(b) (Failure to File Report of Foreign Bank and Financial Accounts).

The case promises to be one of several lately that will test the definition of “willful” non-filing of a FBAR, the penalty for which is much more severe than for that of non-willful failure to file. Recent cases have hinged on factors as varied as to simple mistranslations to infamous historical circumstances surrounding the overseas accounts.

No matter the eventual decision, the U.S. government seems to be making good on its pledge to turn up the heat on failure to file FBARs.

Your tax specialist needs to stay on top of this and many other issues of wealth, foreign income and tax enforcement. If we can help, please let us know.

 

About the Author 

Alicea Castellanos is the CEO and Founder of Global Taxes LLC. Alicea provides personalized U.S. tax advisory and compliance services to high net worth families and their advisors. Alicea has more than 17 years of experience. Prior to forming Global Taxes, Alicea founded and oversaw operations at a boutique tax firm, worked at a prestigious global law firm and CPA firm. Alicea specializes in U.S. tax planning and compliance for non-U.S. families with global wealth and asset protection structures which include non-U.S. trusts, estates and foundations that have a U.S. connection.

Alicea also specializes in foreign investment in U.S. real estate property, and other U.S. assets, pre-immigration tax planning, U.S. expatriation matters, U.S. persons in receipt of foreign gifts and inheritances, foreign accounts and assets compliance, offshore voluntary disclosures/tax amnesties, FATCA registration, and foreign companies wanting to do business in the U.S. Alicea is fluent in Spanish and has a working knowledge of Portuguese.

Alicea is an active member of the Society of Trusts & Estates Practitioners (STEP), the New York State Society of Certified Public Accountants (NYSSCPAs), the American Institute of Certified Public Accountants (AICPA), the International Fiscal Association (IFA), a member of Clarkson Hyde Global, a world-wide association of accountants, auditors, tax specialists and business advisors and the Global Referral Network (GRN).

Distinctly, in 2020, Alicea was awarded with a prestigious NYSSCPA Forty Under 40 Award. She was selected as someone that has notable skills and is visibly making a difference in the accounting profession. 

In 2021 and 2022, Alicea was the Gold and Silver Winner, respectively, of Citywealth’s Powerwomen Awards in the category USA – Woman of the Year – Business Growth (Boutique). In 2023, she continued her winning streak by receiving the Gold award for Company of the Year Female Leadership (Boutique). Furthermore, Alicea is currently listed in the Global Elite Directory 2023, which is an annual exclusive directory of the world’s elite lawyers and outstanding wealth advisors advising ultra-high net-worth clients.

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