Many high net worth individuals or business owners looking to get a tax break use offshore accounts to keep their financial assets secure. Though offshore accounts are a perfectly legal way to protect your money, they are considered less secure than federally insured funds housed in U.S. banks.
There are several circumstances when offshore banking may look favorable:
- Offshore corporations and limited liability companies are often set-up for international trading and asset protection and can help to manage taxes on foreign income. There are certain tax flexibilities and advantages that are allowed for these offshore accounts. It’s best to consult with an IRS attorney to find out what legal benefits these accounts can offer.
- Trusts that are set-up offshore are usually a part of an estate planning process and help to keep future and current creditors at bay. This is an ideal way to protect funds for family heirs and decedents. An offshore trust is advantageous, as it can remain confidential to other parties.
- Private foundations that are established offshore operate much in the same fashion as a trust, and operate similarly to a company. Offshore, they can be protected against excess taxation and the claims of creditors.
Due to the complexity of the legal and tax issues that are associated with starting and managing an offshore bank account, it is in your best interest to consult with an experienced IRS tax attorney. Strategic Tax Lawyers LLP is headed by a former IRS lawyer, Mouris Behboud, who represented the government for over 8 years. Now he’s here to offer you advice on your next financial move. Contact Mouris today to get answers to your offshore account questions.
Offshore account penalties:
Though offshore accounts may seem like a smart way to store some of your assets, if you use your offshore accounts to unlawfully hide your income or funds due to the U.S. government, you could end up in a lot of hot water.
If you have an offshore account and have undisclosed foreign income or are accused of tax evasion, your money may remain untouched, but you can still face the possibility of criminal prosecution and additional fines.
Criminal charges possibly related to offshore account tax returns include:
- 5 years of prison and fine up to $250,000 for tax evasion (26 U.S.C. § 7201);
- 3 years of prison and fine up to $250,000 for filing a false return (26 U.S.C. § 7206(1);
- 1 years of prison and fine up to $100,000 for failure to file an income tax return (26 U.S.C. § 7203);
- 10 years of prison and fine up to $500,000 for failure to file an FBAR or the filing of a false FBAR (31 U.S.C. § 5322).
Do you have an offshore account that has caused you to incur IRS penalties? If so, it’s time to hire IRS tax lawyers who can protect you and help to mitigate the damage. Any one of our IRS attorneys can provide you with a free one on one consultation to discuss your options. Contact us today. We can help. (800) 669-4775
Learn about offshore tax-avoidance and IRS compliance efforts from the IRS.gov. The IRS Q&A page on offshore voluntary disclosure may also be helpful. Google can provide you with results targeted to your local state area laws.