An American businessman best known for his creation of the popular Beanie Babies line of plush toys is facing up to five years in prison along with fines he has already paid over tax evasion allegations. Ty Inc., founder Ty Warner has asked a judge to sentence him only to probation rather than jail time, citing penalties already paid and involvement in charitable giving as factors to consider in assessing his sentence.
The businessman was one of over 100 people who have been prosecuted over the past several years as a part of the crackdown on overseas tax evasion. This is a major issue to California taxpayers and others around the country who may have held bank accounts overseas without realizing that they were in violation of the law. We have written about this issue fairly often in the past since it impacts so many taxpayers. A few simple mistakes or taking advice from an untrustworthy source can lead to situations like this for many taxpayers, even those who do not realize that they have violate the law.
His attorneys noted in the filing that aside from this tax debt which was created by holding income from overseas accounts in a Swiss bank account, he has abided by the letter of the law. One other major issue in this case is the fact that Mr. Warner attempted to participate in the IRS amnesty program that was available to over 38,000 American taxpayers. He was denied entry into that program, leading to the present day situation and potential time behind bars.
Source: Bloomberg, “Beanie Baby Billionaire Seeks to Avoid Jail for Tax Crime,” David Voreacos, Jan. 2, 2013.