US Settles With Broker in FBAR Case Carrying Penalty of More Than $835,000
A Laredo, Texas, man effectively will pay $90,002.87 to settle a penalty case brought for his failure to report income in foreign bank accounts from the Mexican customs brokerage he owned, according to a July 6 notice. Miguel Mireles owned over 50% of Enrique Mireles Y Compania (EMYC), a Mexican customs brokerage, and failed to report income from the foreign accounts between the years of 2006 and 2013, DOJ said (U.S. v. Miguel Mireles, S.D. Texas # 21-00138).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Though the penalty for the violation is $80,000, the dismissal agreement stipulated that Mireles would agree not to pursue the recovery of $90,002.87 in excess balance on aggregate payments to the IRS he made in 2016, and the penalty would be satisfied by that amount.
Mireles, a U.S. citizen, had established his brokerage, EMYC, in 1995, while still residing in Mexico, and operated as a Mexican customs broker. In its October 2021 complaint, DOJ said that Mireles failed to disclose income in foreign bank accounts for the years of 2006 through 2011 and failed to inform his U.S. tax preparer that he had ownership interest in foreign accounts and foreign entities. In 2015, Mireles finally filed late foreign bank and financial accounts (FBAR) documents for the missing years.
DOJ said that Mireles' failure to timely report his foreign financial interests was non-willful but assessed more than $835,000 in aggregate FBAR penalties, including interest and other statutory additions that had accrued since. In 2016, Mireles paid $207,616 in income tax, penalties, and interest for the missing years, including what is now considered to be the overpayment amount he has agreed not to pursue. A Supreme Court decision in 2023 caused DOJ to lower its penalty sought in the case for non-willful violations to $80,000, representing a cap of $10,000 per violation year, 2006 through 2013.