Tax Planning, Wealth Management

Tax Scam #12 (and the final of the “Dirty Dozen” for 2018): Offshore Tax Cheating

Written by: Scott Estill – Public Speaker and Tax Attorney

Offshore Tax Cheating

the IRS has recently released its annual report on the “dirty dozen” tax scams. I will be discussing each one in a series of posts concerning these very real tax scams. If you would like more information from the IRS, here is your link:

Tax Scam #12: Offshore Tax Cheating

What is the scam?:   

Taxpayers move assets to a foreign jurisdiction, often through a complex system of corporations, partnerships, and/or trusts, in an attempt to avoid paying any taxes on the investment income of the offshore funds. The IRS has been and still is focusing on aggressive enforcement of this potentially fraudulent tax area. As the IRS states: “Successful enforcement actions against offshore cheating show it’s a bad bet to hide money and income offshore. People involved in offshore tax avoidance are best served by coming involuntarily and getting caught up on their tax-filing responsibilities.”

I would prefer that you don’t start engaging in offshore tax avoidance without professional tax advice. Notice that there is nothing illegal about “tax avoidance” (it is “evasion” you need to be concerned about), there are many different filing obligations and other tax-related issues for U.S. Citizens and complying with the tax laws. Do not rely on any tax advice that the promoter of the offshore plan is offering. Get independent counsel before venturing into this area.

Here is the link for information that pertains specifically to this scam:(IR-2018-64)

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