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Is the US the Next Tax Haven?

Wednesday, February 10, 2016

If you’ve paid attention to the Strategic Tax Lawyer blogs over the few years, then you’re aware that the United States is fighting the war on tax havens globally. The IRS and Justice Department are the tax powers that instill fear around the world.  To date, the U.S. put an end to the historical Swiss banks and has made financial institutions worldwide comply with the IRS to divulge the U.S. account holders. The U.S., through Foreign Account Tax Compliance Act (FATCA), has fought to make these foreign banking instructions and governments hand over information about U.S. citizens with bank accounts overseas.

FATCA requires global foreign banking institutions to give the U.S. details about Americans holding bank account details or else they will face hefty penalties. The penalties associated with not providing information about American’s foreign accounts withhold a maximum of 30% on most transactions.  Also, FATCA requires that American bank accounts that have more than $50,000 will need to be disclosed. If the financial institutions do not comply, then FATCA will deny those companies with access to the U.S. financial markets.  There are over 100 nations who have agreed to FATCA’s rules.

However, it is interesting that there are reports that claim the U.S. is the newest tax haven.  This so-called report is claiming that the U.S. is worst when it comes to tax haven.  That means worse that the Swiss and the Cayman Islands. Is it true that the U.S. is not complying with the global pact to provide bank data information in order to target tax evasion?  We want to believe that the IRS has joined in on the cause since they preached for this global fight.

The U.S. is now ranked as third, up from sixth place, in tax haven standings. The U.S. is large, which means the size of its offshore sector is large. U.S. does not provide information about itself easily to other countries, even though it has insisted on ending foreign banking secrecy. 

The IRS does offer a voluntary disclosure offshore tax haven program for Americans to disclose their accounts before they get caught red handed. The penalty has increased to 50% (instead of 27.5%). This Offshore Voluntary Disclosure Program is a safe and easy way to come clean about offshore tax havens. 

The Strategic Tax Lawyers, LLP are a firm of established Offshore Tax Attorneys. We, at the www.mytaxattorney.com , are experts in the IRS tax code with years of experience dealing with offshore tax evasion and other tax-related matters.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your case.