Beanie Babies creator is in tax trouble

Ty Warner, creator of Beanie Babies, has agreed to pay $53 million for failing to report millions in income he earned in a foreign bank account.

He had a secret offshore bank account at Union Bank of Switzerland (UBS) starting in 1996. UBS is a Switzerland-based financial services company that, as part of a 2009 agreement, has provided the IRS with the identities of certain customers. UBS and other overseas banks hid foreign accounts from the IRS.

Warner’s defense attorney said Warner accepts responsibility for failing to inform his accountants of the $3.1 million he earned in 2002 in the UBS account. It was reported he failed to pay about $885,300 in taxes for 2002.

He can afford to pay the tax, interest and penalties. Forbes estimated his net worth at $2.6 billion. That would make him the 209th-wealthiest American.

Warner lives in suburban Chicago. He still faces the prospect of prison time.

The agreement to pay a civil penalty of $53,552,248 for failure to file a foreign bank account report was announced by his attorney.

U.S. taxpayers are required to report all income. Also there are rules about reporting foreign bank accounts.

Form 1040, Schedule B has questions about Foreign Bank Accounts at the bottom of the page that require answers. If “yes,” additional forms must be filed.

It appears Warner’s penalty is for all years, not just 2002.