Publisher's Synopsis
The United States generally taxes its citizens and resident aliens on their worldwide income. For years, the solution to hiding money from the government was to deposit those funds at offshore banks or similar financial entities. U.S. taxpayers can hold offshore accounts and foreign assets for a number of nontax reasons, including access to funds while living or working overseas, asset protection, investment portfolio diversification, enhanced investment opportunities, and to facilitate international business transactions. Taxpayers must report annually whether they have offshore accounts and pay taxes on any income earned from them . Taxpayers who intentionally fail to report income earned on offshore accounts or who neglect to disclose foreign assets as required by law face significant penalties and possible criminal prosecution if discovered by the Internal Revenue Service (IRS). If that was not enough, more than 50,000 individuals have come forward to disclose their offshore accounts to the IRS through the OVDP and other voluntary disclosure programs, paying more than $8 billion in tax, penalties, and interest. And according to the IRS FATCA website, as of July 31, 2016, there are over 206,000 foreign financial institutions registered from over 200 countries/jurisdictions. These foreign financial institutions have agreed to report customer information to the United States in an effort to ensure that tax cheats cannot hide assets offshore. This handbook provides a summary of some of the tools the government is using in its campaign to identify tax evaders.
