From the Tax Law Offices of David W. Klasing - The Senate & IRS are Going After Offshore Shell Banking and Tax Evasion
Retrieved on:
Tuesday, October 25, 2022
FATCA (the Foreign Account Tax Compliance Act) is intended to combat tax evasion by requiring account holders to report their offshore assets.
Key Points:
- FATCA (the Foreign Account Tax Compliance Act) is intended to combat tax evasion by requiring account holders to report their offshore assets.
- However, a somewhat popular "shell banking" technique has been used to hide these assets and avoid reporting requirements.
- Since FATCA only requires reporting when U.S. persons hold these offshore accounts, many investors instead use a shell company to hold these accounts.
- This risk also adds increased urgency for anyone facing potential offshore IRS criminal tax investigation, auditing of foreign financial accounts, or criminal tax prosecution for shell banking schemes.