MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT



In a brilliant critique of an NBC interview with a defiant Ann Romney who disdainfully refused to release any further family income taxes, Lawrence O'Donnell raises the interesting prospect that the real smoking gun may be that the GOP presidential candidate committed a felony by sequestering taxable income offshore.

This is speculation, of course, because as Ann Romney has said, she and Mitt won't release more income taxes because it will provide the public with "ammunition." Of course, as O'Donnell points out, there is only ammunition if there are improprieties.

Beyond Harry Reid's claim of informed knowledge that that Romneys have paid no income taxes for a period of ten years in the recent past, the most compelling possible scenario is that in 2008 many of the nation's 1% paid little or no income tax because they took large capital gain losses as offsets against capital gain profits due to the crash of Wall Street. Romney quite possibly, given his inclusion in the plutocracy, was among those who paid no income tax.

But, as O'Donnell pointed out, the year 2009 even looms larger on the horizon. (Remember that Romney has only released a 2010 income tax return with the vague offering to release his 2011 income taxes at some undesignated point in the future.) Given that most of Americans paid their taxes by August 15th, the indefinite delay in sharing his 2011 income taxes raises the question of why he just won't release his 2009 IRS filing, which is completed.

Here may be the answer: Romney may have taken advantage of a 2009 IRS amnesty period to disclose income hidden in offshore accounts but subject to US taxation. The amnesty offer allowed such persons to escape potential criminal prosecution for tax evasion.

Here is an example of what happened to one person who banked taxable income in offshore accounts to avoid paying US taxes, according to a law firm that specializes in such cases. It is entitled, "Additional Criminal Prosecutions for Undeclared Offshore Accounts.":

This week, Anton Ginzburg, another taxpayer with a non-compliant account at UBS, plead guilty in a Federal Court in New York to criminally concealing his account and failing to disclose the account on the required FBAR form. This taxpayer faces a jail sentence of up to five years and a fine of approximately $1.5 million, constituting fifty percent (50%) of the value of the account during 2007. In fact, the law allows the government to impose a 50% penalty for every year that the account was non-compliant, although the pattern in recent criminal prosecutions is that if the defendant enters a guilty plea, the government imposes a 50% penalty for one year.

This potential jail sentence and monetary fine stands in contrast to taxpayers who voluntarily disclose their foreign accounts. A proper voluntary disclosure would avoid a criminal prosecution and jail time, and the fine would be capped at twenty five percent rather than fifty percent.

Indeed, even the Internal Revenue Service (IRS) information web page on the amnesty (which was re-instituted for part of 2011) notes: "Taxpayers with undisclosed foreign accounts or entities should make a voluntary disclosure because it enables them to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution."



More explicity, according to the IRS:

Possible criminal charges related to tax returns include tax evasion (26 U.S.C.§ 7201), filing a false return (26 U.S.C. § 7206(1)) and failure to file an income tax return (26 U.S.C. § 7203). The failure to file an FBAR and the filing of a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322.

A person convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000. A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000. Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.

This is addition to the civil penalties, including fines.

No one can do other than hypothesize that Mitt Romney might have taken advantage of the 2009 amnesty to report previously undisclosed foreign bank accounts and interest earning. But if he did, he would have on the one hand committed a felony, but then had it expunged by participating in the 2009 program.

And that is possibly why we are still awaiting the 2011 Romney income tax returns, even though his 2009 returns are complete and ready for public review. It would be hard, as O'Donnell notes, to win the presidency when you have committed a potential felony, even if you escaped possible prosecution because of a special IRS pardon for past behavior.

If this theory is incorrect and unfair to the Romney, all Mitt has to do is release his 2009 returns to prove the contrary.