LEGAL GUIDE
Written by attorney Sebastian Gibson | May 22, 2010

Transferring Assets Out of the U.S. into Foreign Bank Accounts and Overseas Trusts

An asset protection lawyer can advise a client with a foreign bank account or assets overseas what reporting requirements they have to report their assets to the IRS. When there have been past failures to report, a voluntary disclosure lawyer can advise a client what it will take to become tax compliant.

In the 1990s and early 2000s, wealth was flowing from the U.S. into foreign countries on the promise that money could be sheltered there confidentially with no payment due to the IRS. Many taxpayers who took advantage of such promotions now lose a little more sleep every time they've read an article about the crumbling of bank secrecy.

Subsequent reasons for the transfer of wealth from the U.S. have been the unwinding of the gold standard in the U.S., the financial crisis of the recent great recession, the growing U.S. debt and the inauguration of the Obama administration. Every few years there is another reason. Once the reason which caused an individual to transfer their assets is no longer of concern to that individual, they often reevaluate whether their actions were done legally or whether any of their actions or non-actions since their transfers of wealth have since become illegal.

On a parallel course, Congress and the U.S. government as a whole, in conjunction with the IRS and the Department of Justice have been mounting a campaign not only to stem the flow of wealth into offshore tax havens, they have also been creating an onerous maze of reporting requirements to catch tax cheats and discourage new ones.

There are oppressive reporting requirements that, if not complied with, can wipe out an individual's entire fortune. There are also tax laws that put these offshore entities and their beneficial owners at a tax disadvantage in the U.S. There will likely be more such tax increases as the federal government looks for sources of money to reduce the country's ever increasing national debt. The increased concern of members of new political parties in the U.S. angry at what they consider to be socialism or the takeover of individual rights may cause a new outflow of money as their ranks swell.

The U.S. government has also targeted boiler-plate off-the-shelf foreign trusts and offshore corporations sold by mills on the internet and in foreign jurisdictions often by unscrupulous individuals.

If you are considering transferring your wealth out of the U.S. or have already done so, we suggest you speak to a lawyer at our law firm to discuss your situation. All discussions are confidential, even if your bank accounts in foreign jurisdictions no longer are.

In compliance with IRS requirements, we must advise you that any U.S. federal tax advice or advice regarding the transfer of assets out of the U.S. contained in this informational article is not intended to be used nor is it published in order for it to be used and you may not use it for the purpose of avoiding penalties or fines under the Internal Revenue Code. It is not intended to be used nor is it being published in order to promote, market or recommend any specific transaction, tax-related matter or estate planning tax scheme to any party.

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