Category Archives: Offshore Tax

Hiding Assets From The IRS: Criminal Consequences

hiding assets from the IRS - lawyer adviceAuthorities can file criminal charges against individuals who are hiding assets from the IRS, don’t file tax returns, file false returns, and otherwise evade taxes.

Hiding Assets From The IRS: FBAR

Under U.S tax laws, parties must report overseas bank accounts, brokerage accounts, securities, mutual funds, and other foreign accounts. The procedure is known as FBAR, and you can read more about it here. Be aware: failure to file FBAR documentation can result in gigantic fines and a 10-year prison sentence.

Hiding Assets From The IRS:Violations and Punishments

Hiding Assets From The IRS: Achieving Compliance Through OVDP

Reporting foreign financial interests can be a complex process, especially when juggling multiple accounts. Thankfully, via the Offshore Voluntary Disclosure Program (OVDP), the IRS offers tax assistance to parties who owe penalties on foreign assets.

In short: program participants can reduce fines, avoid criminal charges, and come clean.

Let’s Chat About How We Can Help You

Do you need to clean up some back tax issues? We know the process seems daunting, but we’ve helped countless other people get over the hump, and we can do the same for you. In many cases, people end up owing a lot less than they think.

The key is to just jump in and get it done. The water is more tolerable than you think.

Get in touch today to begin the conversation. The consultation is on us.

Puerto Rico Tax Haven: Best For Internet Businesses

Puerto Rico tax havenLooking for a “tax haven”? Consider Puerto Rico. The U.S. territory passed two laws which offer significant tax benefits to lure businesses and residents to the island.

Puerto Rico is a U.S. Commonwealth; it’s part of the US, but enjoys a level of independence that includes tax breaks not available in other states and jurisdictions.

Puerto Rico Tax Haven: Act 20 Basics

On January 17, 2012 Puerto Rico enacted the “Act to Promote the Export of Services” — a.k.a., Act 20. The provision bestows tax exemptions and credits on businesses engaged in eligible activities on the island. To leverage Act 20, businesses must apply for a tax concession and obtain an exemption decree. The decree is available for 20 years, with a possible 10-year extension.

Puerto Rico offers generous tax incentives to eligible businesses. For example:

Puerto Rico Tax Haven: Act 22 Basics

At the same time, Puerto Rico enacted the “Individual Investors Act” — a.k.a., Act 22. A resident cultivation attempt, the law obliterated all manners of tax obligations. Eligible participants enjoy:

Exemptions under Act 22 are valid through December 31, 2035.

Puerto Rico Tax Haven: Act 20 and 22 for Internet Business

To make conditions even more attractive, Puerto Rico recently eliminated the five employee requirement. After moving your business to Puerto Rico, you will only pay 4% on Puerto Rico sourced business profit. And if you yourself move to Puerto Rico as well, you can then pay all the profits as dividends to yourself which are 100% tax exempted. Therefore, since many internet businesses are highly portable, relocating to Puerto Rico is relatively easy and may give you one of the most competitive tax incentives around. Besides, the year-around summer weather!

Disclaimer: This article is not intended to provide legal advice. Please consult an attorney for legal advice for your particular situation.

How to Preserve Your Wealth Before a Lawsuit

Offshore asset protection lawyerTax lawsuits are a pain. And if you find yourself entangled in one, you may want to take actions to preserve your wealth before “bad things” happen.

The goal of wealth preservation is to protect your assets before a cause of action (or “bad thing”), by moving them to a safe jurisdiction. Once authorities file a cause of action, you can no longer transfer assets offshore without violating U.S. law.

Below, we’ll discuss two of the most effective wealth preservation structures, the Cook Islands Trust and the Panama Foundation, and why the Cook Islands Trust is a better choice.

How To Preserve Your Wealth: Cook Islands Trust

Cook Islands trusts afford numerous asset protection benefits. Similar to a living trust, settlors have 100% control of the trust’s assets unless trouble strikes; and when it does, offshore trustees assume responsibility for accounts.

In the event of a hiccup, if you choose a Cook Island option, a licensed, bonded, and insured trustee in the Cook Islands will step in and manage your trust, until the issue is resolved. During this period, trustees can also facilitate overseas investments based on prior instructions.

Cook Islands Trusts Afford Mobility

Portability is another attractive aspect of a Cook Island trust. You can move the trust and its assets out of Cook Islands any time, which provides another layer of asset protection.

For instance, let’s say creditors prevail in a U.S. case and attempt to enforce the judgment in Cook Islands. Assuming the statute of limitations has not run out, to avoid the seizure of the trust and its assets, affected parties with Cook Island trusts can move them to another country.

New Zealand Courts Hear The Cases

If creditors want to bring a suit against Cook Islands trusts have to initiate the process in New Zealand, whose courts hear the cases applying Cook Islands Law. In such situations, creditors may spend many thousands of dollars bringing an action only to find nothing is left. And for the record, Cook Islands’ statute of limitations is only one year form the trust funded date or two years from the cause of action (the date the harm occurred). Once the statute of limitations runs out, New Zealand courts will refuse to hear any cases against your Cook Island trust.

Cook Islands Trusts Statute of Limitations Advantage

Moreover, even if it’s within the statue of limitation, the asset-protection-friendly Cook Islands can still protect your trust. The only feasible way creditors can enforce judgments against Cook Islands trust holders is to prove beyond a reasonable doubt that the sole reason for the offshore trust was to transfer assets away from creditors. Thus, each creditor must prove the transfer was a fraudulent transfer as to him or her — a very high legal standard.

Finally, an offshore asset protection can also facilitate your international investments, international estate planning, and general protection (not related to one particular creditor).

How To Preserve Your Wealth: Panama Foundation

Panama foundations are separate and distinct entities from their owners. To set up the Panama foundation, you don’t need members or shareholders. However, the structure requires a founder (you, the settlor), the foundation council, and a beneficiary. The council can be any three people or any one company that manages assets if you become unable. Under Panama foundations, settlors can also be beneficiaries.

As a legal entity like a corporation or LLC, the foundation must have a local address and local agent. However, foundations cannot operate active businesses. Foundations may form Panamanian corporations, but may not own businesses directly.

Be aware that parties operating businesses in Panama must pay Panamanian taxes. Moreover, you must also pay U.S. taxes on any  income generated by the foundation.

In short and generally speaking, people use Panama foundations to diversify investment portfolios and minimize U.S. estate taxes.

Connect With An Offshore Tax Lawyer

Interested in learning more about how to preserve your wealth? Considering a Cook Islands trust or Panamanian foundation? Either way, we can help. Our team of offshore tax lawyers have helped countless businesses and individuals with various international tax matters. We know how to save clients money and protect assets.

Get in touch today. Let’s start discussing your options.  The consultation is on us.


Disclaimer: This article is not intended to provide legal advice. Please consult an attorney for legal advice for your particular situation.