In a gross attempt to skirt the rules, a taxpayer thought if he kept his foreign-earned income to himself it would be….all net? The taxpayer played professional basketball in China and was charged with wire fraud for failing to report multiple years of foreign-earned income. He retained a U.S. firm to do his taxes for one of the early years of his career in China, and a CPA at the firm found an online article about his career in Beijing. He told the CPA he didn’t have any foreign income in that year and never returned to the firm for subsequent years’ tax return preparation. However, he had applied for an insurance policy and reported income of $1.25 million. Alley-oops. (U.S. v. Morris (September 16, 2021) U.S. District Court, Eastern Dist. of Kentucky, Case No. 5:21-014-DCR)
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