The IRS does not like offshore and foreign bank accounts that are not reported on the FBAR, IRS Form 8938, and Schedule B of IRS Form 1040. Millions of U.S. taxpayers have perfectly legal and properly reported offshore and foreign bank accounts. But legal or illegal, they must be reported on the two income tax forms and the FBAR.

Panama is now part of the tax-defined North American area where tax deductions are favored by tax law. For entry into this favored tax-deductible area, Panama had to agree to give the IRS and other government agencies banking and other information that otherwise was not available under Panama’s bank secrecy laws.

Terry Gerber was sentenced to two years and six months in federal prison for tax evasion.

Roy Lewis, a dentist from California, was sentences to 2 years in prison for tax evasion. He was involved with Tower Executive Resources, a Denver-based company that set up a failed tax-evasion scheme with false invoices, bogus tax deductions, and secret offshore bank accounts.