Unreported Offshore Transactions

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The Internal Revenue Service has been making it a priority, as of late, to track down taxpayers who hide money from the federal government in offshore accounts.

First of all, there is nothing illegal about maintaining offshore bank accounts.  Not reporting the income in those accounts to the Internal Revenue Service, especially when there is a question directly pertaining to offshore accounts on everyone’s income tax return, is illegal.

Next, offshore does not have to mean that you have put your money in a bank account in the beautiful Cayman Islands.  Offshore, means anywhere but in the United States.  If you have bank accounts in Canada, those are offshore accounts.

It sounds easy to sidestep the Internal Revenue Service if, for instance, you have a bank account offshore and deposit gains you made from a business deal in London.  How could the Internal Revenue Service track that?  Well, that is exactly what they are working on, right now.  The Internal Revenue Service is making it a goal to be able to track the transactions of United States citizens from wherever they start to wherever they lead.  The IRS has even made slight inroads into the, formerly impenetrable, Swiss Banking System.  In some cases, ex-wives, ex-husbands, ex-business partners, or ex-friends turn in people to the IRS.  When it comes to money, greedy people usually talk.

Some people have gotten caught up in the offshore tax scam by fast-talking middlemen who operate outside the United States and convince business people or the fairly affluent to hide their money offshore.  The middleman profits from the illegal deception and is persuasive in explaining to the taxpayer that they will never get caught.

If you find yourself involved in this type of operation, you need to consult a tax attorney, pronto.  The fast-talker operates outside of the Internal Revenue Service jurisdiction and risks next to nothing in setting up and/or maintaining this deception for you.  He or she is not subject to U.S. tax laws.  Because you are subject to these laws, you need an attorney.

The Internal Revenue Service is not nearly so vindictive, if you approach them first.  If you are recalcitrant, and feign ignorance, you will probably not do any sort of jail time.  All the Internal Revenue Service wants is their share of the gains you attempted to hide.  Your attorney can negotiate to get them that share.  You will probably have to pay interest, fines, and penalties as well, but it is better than having the Internal Revenue Service finding you out on their own.


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