Offshore Accounts Lawyers

The United States taxes its residents on their worldwide income. Foreign persons are only taxed on income originating in the U.S.
Foreign persons are also not taxed by the U.S. on certain types of investment income originating in the U.S., like interest income earned on bank deposits. Therefore, U.S. citizens sometimes try to structure their income to look as if it comes through foreign entities or namely ¿offshore accounts.¿

What Does ¿Offshore¿ Mean?

There are 2 ways in which ¿offshore¿ is referred to: 

• Country ¿ When referring to a country, ¿offshore¿ means a jurisdiction that offers financial secrecy laws in order to attract investments from outside its borders
• Financial institution ¿ When referring to a financial institution, ¿offshore¿ refers to a financial institution that primarily offers services to investors living outside the jurisdiction of the country where the institution is located

Abusive Offshore Tax Avoidance Schemes

The IRS is concerned about offshore accounts where U.S. taxpayers use them to conceal assets and income that are taxable. Abusive schemes usually create structures that make it appear a nonresident alien or foreign entity is the owner of assets and income, when in fact and substance, true ownership remains with a U.S. taxpayer. The Abusive Tax Scheme Program is concerned about these instances. Here are some different types of entities and schemes being used: 

• Foreign trusts
• Foreign corporations
• Foreign (offshore) partnerships, LLCs and LLPs
• International Business Companies (IBCs)
• Offshore private annuities
• Private banking (U.S. and offshore)
• Personal investment companies
• Captive insurance companies
• Offshore bank accounts and credit cards
• Related-party loans

Remember¿

Not all offshore accounts are illegal. However, there is a booming industry of offshore practitioners who advise U.S. citizens to set up offshore bank accounts. They persuade U.S. persons to have confidence in the secrecy laws of the jurisdiction where they are located; they also tell you it is impossible for the IRS to find out about such an account and its earnings. You could get in trouble because this constitutes tax fraud. U.S. citizens are required to report all financial interest in their offshore accounts. You may want to consult a lawyer who can tell you whether your offshore accounts are within the law.

What Can You Do if You Have Been Accused of an Abusive Offshore Tax Avoidance Scheme?

Consulting an international tax lawyer could be advantageous to you. An experienced attorney could explain your options and may help you with your problems.