(973) 507-9760 Paul@wiggmax.com

Offshore Banking  | Foreign Banking

An offshore bank account is an account at a bank located outside the nation of residence of the depositor. An offshore bank account is convenient if you do business with the country where the account is located, travel there regularly, or work there from time to time. Offshore bank accounts are often left over from a prior stay in the country or are acquired by inheritance or gift from a family member living in the other country.

 

It has been easy in the past not to pay much attention to offshore bank accounts acquired over time.  Foreign banks have competed with each other to provide bank services and have considered privacy and anonymity an important part of their service. Very little routine reporting of these accounts was provided.

 

Customers of offshore banks were lulled into an understanding that money in these accounts was safe and that unless the customer voluntarily reported the income to the tax authorities, it was unlikely that the tax authority in their home countries would ever discover the existence of the account. There was a culture of collusion and acceptance that although not reporting these bank accounts was a bad thing, that no one reported their offshore account and that it was acceptable or even expected that you would leave the earnings off of your tax return.

 

An industry developed in certain countries to bring financial service jobs and industry to those countries.  The banking laws were designed to provided stronger assurances of privacy for banking transaction. Special rules were created for the benefit of international banking customers. Tax laws in these countries were written to minimize any local country tax on the earnings on these accounts.  Small countries, in particular many island nations adopted very favorable banking and tax rules and the tax haven industry was created.

Why are Offshore Bank Accounts in the News?

Over the past ten years, customers of offshore banks have learned that the game has changed.   Bank secrecy has been cracked.  The U.S. has bullied banks in other countries into reporting banking transactions with U.S. taxpayers with two powerful threats:  1) non cooperating banks will find that all of their financial transactions with the U.S. will be subject to a high withholding tax and 2) any non cooperating foreign bank holding U.S. assets risks having those assets frozen or attached by tax liens pending releasing requested tax information.

 

A flood of information is flowing into the IRS concerning foreign bank accounts.  It is no longer a question of whether or not information will be turned over, but simply when such information will be in the possession of the IRS and when the IRS will have the manpower to look at it and do something about it.

 

Many innocent taxpayers with foreign bank accounts are worried that they will be caught up with the criminals.  It is tough to defend yourself against accusations of wrongdoing when your defense is everybody else did it.  A better presentation is to show how your relationship with the international account occurred naturally over time, and from your usual business and family relationships.

Call Paul Wigg-Maxwell – (973) 507-9760 for international tax advice. Paul is an international tax attorney with over 25 years of experience representing individuals and business with cross-border ties.

Free Case Evaluation

Fill out the form to receive a free confidential consultation

Case Type*
Enter the Captcha

Reload
profile image
Maria Alexander
04-04-2018
Paul is an excellent attorney for small business owners like myself. He will make the appropriate research and make sure that the documents I have are all in working order and official. Paul always responds to phone my calls immediately, and he works fast whenever I need to have documents prepared quickly. His knowledge has helped me steer my business in the right direction and his advice is always on point and concise. I’ve had the pleasure of using Paul’s services for nearly a decade. During this time I had help with drafting and reviewing the following: several lease contracts, employee contracts, confidentiality and non-disclosure agreements, new client contract/liability waivers, US copyright electronic registrations, independent contractor agreements, website disclosure language, video release forms, and business registrations with the state. Having Paul as an attorney and being able to reach out to him whenever I have an emergency makes me more confident to run my business and I know that if I have a legal problem Paul will be there to help me.
profile image
Oded Hecht
23-03-2018
Very good experience. I had some uncommon and large financial situations abroad as a US Citizen. I just wanted to make sure I am going about it legally and wisely. I am a business executive (Harvard B. School), having interacted with many top lawyers worldwide, and working with Paul was a pleasure and a wise choice. Beyond helping me professionally to solidify a winning strategy through his sound knowledge and experience, the interaction was exceptionally forthcoming and pleasant. I would recommend Paul without any hesitation!
profile image
Dan Trolaro
16-10-2017
Took the time to listen, ask good questions, and provide good thoughts during initial phone call. Highly recommend giving him a call.
profile image
Bill
07-08-2017
Mr. Wigg-Maxwell helped me out with a complicated international inheritance tax question. He was quick to respond with a knowledgeable answer. I would happily bring any future tax issues I have to Mr. Wigg-Maxwell for resolution.
profile image
mathew gajewski
25-03-2018
Cool guy, extremely nice and knows his stuff.