US Reporting of Anonymous Overseas Bank Accounts

US Reporting of Anonymous Overseas Bank Accounts

Anonymous Overseas Bank Accounts

How Does the U.S Find an Anonymous Overseas Bank Account? The U.S. government has various tools at its disposal to try to uncover Anonymous Overseas Bank Accounts held by US account holders.  Whether it is through FATCA (Foreign Account Tax Compliance Act), FBAR (Foreign Bank and Financial Account Reporting), J5 or the Hague convention, the IRS has many ways to investigate overseas bank accounts.  Common countries with Anonymous Overseas Bank Accounts, include: Switzerland, Luxembourg, Panama, Singapore, Israel & More.

IRS Investigates Anonymous Overseas Bank Accounts

Anonymous Overseas Bank Accounts for U.S. Persons in foreign countries were much more common before the IRS got wind of them.  They are called “blank or numbers accounts,” because they are not identified by the account holder (you) — but rather by an ID number.

The purpose was not necessarily for any illegal purposes — some people just wanted to put the money aside and forget about it for a while. Technically, they are not illegal — but the IRS has been honing in on these accounts and issuing penalties against the account holders, if the IRS learns that the accounts have not been properly reported.

Over the past few years, we have helped many clients escape the wrath of the IRS, by safely getting into IRS Offshore Compliance aka (Offshore Amnesty) before the IRS discovered them.

How does IRS find of Anonymous Overseas Bank Accounts?

There are 5 easy ways the IRS can locate these accounts:

Anonymous Overseas Bank Accounts are Dangerous

One of the most important reasons why a numbered account is dangerous, is because if the IRS discovers your account before you have a chance to disclose, the IRS can allege an intentional misrepresentation by way of willful blindness — even if that is not the case.

In other words, when a person opens a bank account, the financial institution is tasked with sending the account holder ongoing information and statements about the account.

When a person opens a numbered account, the account holder name is intentionally disassociated from the account.

And, generally for a fee, the Foreign Financial Institution puts a hold on sending out any statements, or other account information to the account holder — and intentionally keeps the client in the dark.

Anonymous Overseas Bank Accounts & Deferred Prosecutions 

Under a deferred prosecution agreement (which several Swiss institutions have entered into), the foreign financial institution volunteers your previously “Secret” or “Hidden” Account information to the IRS.

The IRS is then armed with enough information to show that you may have been willful in your failure to report the account information and/or pay tax on the income.

The IRS does not always immediately act on the information they receive on your foreign accounts.

They may wait until you are already under audit (aka reverse eggshell audit) – and put you in a serious jam.

If the matter is not handled properly, it may lead to a criminal investigation.

What if I am Out of Offshore Compliance?

If you are out of offshore compliance, the penalties can be severe. Therefore, you may consider entering the IRS offshore voluntary disclosure/tax amnesty, before it is too late.

What Should You Do?

Everyone makes mistakes. If at some point you discover that you should have been reporting your foreign income, accounts, assets or investments, the prudent and least costly (but most effective) method for getting compliance is through one of the approved IRS offshore voluntary disclosure programs.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.

Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.

*Please beware of copycat tax and law firms misleading the public about their credentials and experience.

Less than 1% of Tax Attorneys Nationwide Are Certified Specialists

Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.

Recent Golding & Golding Case Highlights

  • We represented a client in an 8-figure disclosure that spanned 7 countries.
  • We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
  • We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
  • We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
  • We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.

How to Hire Experienced Offshore Counsel

Generally, experienced attorneys in this field will have the following credentials/experience:

  • 20-years experience as a practicing attorney
  • Extensive litigation, high-stakes audit and trial experience
  • Board Certified Tax Law Specialist credential
  • Master’s of Tax Law (LL.M.)
  • Dually Licensed as an EA (Enrolled Agent) or CPA

Interested in Learning More about Golding & Golding?

No matter where in the world you reside, our international tax team can get you IRS offshore compliant. 

Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.