Prison Sentence For UAE/Qatar Resident Evading Foreign Income Taxes

Prison Sentence For UAE/Qatar Resident Evading Foreign Income Taxes

41 Month Prison Sentence For Evading Taxes with Foreign Income

In recent years, the U.S. government has significantly increased enforcement of international tax compliance and reporting. U.S. Taxpayers who knowingly falsify their income to artificially reduce their taxes may find themselves at the receiving end of an IRS and Department of Justice investigation and if it does not turn out well, it could lead to a prison sentence — as was the case in a recent UAE matter. In this case, the taxpayer allegedly falsified documents reflecting the amount of income he was earning while living overseas in the UAE and Qatar. Unfortunately, the Taxpayer was caught falsifying documents and then caught again trying to resolve the issue which led him down a deeper pull resulting in a stiff sentence.

Let’s look at the Department of Justice press release from February 2024:

Defendant Evaded More Than $1 Million in Taxes on Income Earned Abroad and Impeded the Investigation

      • A Texas man was sentenced today to 41 months in prison for evading his taxes by not reporting income he earned while working overseas.

      • According to court documents and statements made in court, from 2013 to 2018, Peter Joseph Tignini, formerly of Cypress, Texas, worked in the United Arab Emirates and Qatar, earning over $4,750,000 in income. For tax years 2013 through 2017, Tignini filed false tax returns that claimed that his income was only approximately $100,000 each year. The amount Tignini reported each year was near or below the amount that U.S. citizens who live and work abroad for most of a year can exclude from their taxable income on their U.S. tax return. Tignini did not file a return for 2018. As a result, Tignini caused a tax loss to the IRS of $1,169,348.

      • Following an interview with federal law enforcement, Tignini altered his employment contract and payroll documents to make it appear that his former employer, not Tignini himself, was responsible for failing to report the income and pay the tax. Tignini then caused his attorneys to provide the false documents to the Justice Department’s Tax Division and the IRS. After investigators asked a witness about the online program Tignini used to create the phony documents, Tignini attempted to delete the documents from his account.

      • In addition to the term of imprisonment, U.S. District Court Judge George C. Hanks ordered Tignini to serve three years of supervised release and to pay $1,169,348.60 in restitution to the United States.

      • Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas and Special Agent in Charge Ramsey E. Covington of IRS-Criminal Investigation Houston Field Office made the announcement.

IRS Criminal Investigation investigated the case.

      • Senior Litigation Counsel Sean Beaty and Trial Attorney Brian Flanagan of the Tax Division, and Assistant U.S. Attorney Adam Goldman for the Southern District of Texas are prosecuting the case.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure

Contact our firm today for assistance.