Debate on Using Offshore Accounts


One reader doubts that offshore banks accounts are of value and may create problems. See another opinion here.

Dear International Friend,

A reader recently wrote:

"Hi Gary-

I'm reading with interest your back and forth emails with subscriberswho are skeptical about investing offshore investing and accounts. I too have felt that unless someonehad hundreds of thousands of dollars to invest…it wasn't worth it. What'sholding me back is the thought of immediately getting audited because Iwill have to check off that I have offshore accounts, to the IRS – even tho Ipay MORE taxes than I know I should. What are the real world implications ofsomeone suddenly doing $100,000 worth of business with Jyske Bank???Best"

My reply is that I have used dozens of overseas bank accounts for thirty years and was audited only once. The audit focused on home office deductions, whether my subcontractors were subcontractors or employees and whether I could deduct coffee provided to delegates at seminars etc. I do not think that marketing on your 1040 that you have an overseas account causes an audit, but am passing on a reply from eClub advisor and tax attorney Leslie Share LAS@PNRLAW.COM. Leslie specializes in international business and structures and has nearly 20 years experience in this field (see Leslie's Bio

"Mike–there is nothing illegal or immoral about investing offshore. Aslong as you report what you have to report, Americans generally don'thave a problem. People do not automatically get audited because theydisclose an offshore account. You could be audited, but you can getaudited by claiming that you gave too much to the Salvation Army orthousands of other items. In fact, you can get audited for no reason atall if your name pops up randomly in the computer.

The people who get into trouble are almost always the ones who don'treport and get caught, as opposed to the ones who do proper compliance.

The bottom-line decision is up to you, and each person's unique factsand circumstances are different, but you should generally take advantageof potential offshore opportunities without fear of governmentretribution.

Leslie A. Share"

We'll look at this in more detail (and hear a reply from an overseas banker). In ending I would add that one of the best ways to use overseas accounts that provide tax benefits is with a genuine overseas business. This is why we will conduct three sessions of International Business Made EZ in Quito Ecuador this winter. Won't you join Merri and me there?

Gary


Related Artices

If you enjoyed this article "Debate on Using Offshore Accounts" you may find these related articles of interest too:

    None Found