by Brian Mahany
About a week ago, I received an email from Doug Casey of Casey Research. The email discussed the benefits of opening an offshore account. His email brings up an important reminder. Often we receive calls from folks who have unreported offshore accounts. They often ask if they should close the account and repatriate the proceeds to the U.S. Assuming there was a valid business reason to open the account in the first place, the answer is NO!
Although some people advocate hiding money from Uncle Sam, that sort of behavior comes at a high price – five or more years in prison!
The reason most people give for having a foreign account are completely legitimate:
- they inherited the account,
- they wish to diversify their holdings and not have all their assets in one country,
- some foreign banks have more attractive products or offer higher rates of return,
- they are dual nationals with family or ties to another country,
- they have an investment or business in that country,
- although US taxpayers, they live or work in a foreign country,
- they have a child who is a student or lives in a foreign country,
- they were born overseas,
- they have created an offshore trust or investment device for asset protection purposes, or
- they simply don’t believe in the stability of the U.S.banking system.
Doug and many others believe that U.S. is already bankrupt and probably can’t be saved. No matter where you fall on the political spectrum, there are great reasons to move some of your assets offshore. We can help you do so legally.
If you have financial accounts offshore and haven’t previously filed a Report of Foreign Bank and Financial Account (FBAR) or properly reported these accounts to the IRS, we can help. The IRS has just offered another offshore tax amnesty; this one called the Offshore Voluntary Disclosure Program or OVDP. The penalties are high but much lower than you can expect if you don’t take advantage of the amnesty and get caught. The program also offers a “get out of jail free” card for most participants.
Even the offshore gurus like Doug Casey believe you should keep your offshore accounts legal. Here is what he had to say in the email newsletter I received:
“Things we’ve said before: Set up foreign bank accounts in places you like to travel, while you can. Set up vault arrangements for physical precious metals outside the US. Buy foreign real estate that you’d like to own, because it can’t be forcibly repatriated. Offshore asset protection trusts are a good idea too. Become an International Man. Let me emphasize that US taxpayers should stay within all US laws, because the consequences of breaking them are unbelievably draconian.
Generally, one simply must internationalize one’s assets. The biggest danger investors face, by far, is not market risk – huge as that will be – but political risk. The only way to insulate yourself from such risk is to diversify yourself politically and geographically.”
The tax lawyers at Mahany & Ertl have helped many U.S. taxpayers with a wide variety of international and foreign reporting issues. OVDI, OVDP, the new FATCA (Foreign Account Tax Compliance Act) reporting, voluntary disclosures and defense of criminal tax investigations.
If you have questions, give us a call. Your inquiry is protected by the attorney client privilege and will kept in strict confidence. For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; San Francisco, California and Minneapolis, Minnesota. Legal and tax services available anywhere.