The IRS Pursues Concealed Assets in Offshore Accounts 2022

The IRS Pursues Concealed Assets in Offshore Accounts 2022

The IRS Pursues Concealed Assets in Offshore Accounts 2022

When it comes to various Federal tax crimes and violations, the Internal Revenue Service publishes an annual list referred to as the “dirty dozen” list.  While each year they are various new entrants that make it onto the list, there are a few mainstays that tend to appear on each annual list –  and one of these mainstays includes matters involving offshore accounts. In general, the Internal Revenue Service does not like the idea that US taxpayers hide money and other assets offshore, without properly reporting to the US GovernmentUS Taxpayers who get caught with undisclosed offshore accounts and assets could be assessed significant fines and penalties, along with a possible criminal investigation if the Internal Revenue Service believes that the taxpayer acted willfully and with the intent to evade or defraud. Let’s take a look at what the IRS published in the Dirty Dozen list on matters involving offshore accounts and assets.

IRS Remains Focused on Concealed Assets

      • “The IRS remains focused on stopping tax avoidance by those who hide assets in offshore accounts and in accounts holding cryptocurrency or other digital assets.

      • International tax compliance is a top priority of the IRS. New patterns and trends emerging in complex international tax avoidance schemes and cross-border transactions have heightened concerns regarding the lack of tax compliance by individuals and entities with an international footprint. As international tax and money laundering crimes have increased, the IRS continues to protect the integrity of the U.S. tax system by helping American taxpayers to understand and meet their tax responsibilities and by enforcing the law with integrity and fairness, worldwide.

      • Over the years, numerous individuals have been identified as evading U.S. taxes by attempting to hide income in offshore banks, brokerage accounts or nominee entities. They then access the funds using debit cards, credit cards, wire transfers or other arrangements. Some individuals have used foreign trusts, employee-leasing schemes, private annuities and structured transactions attempting to conceal the true owner of accounts or insurance plans.

      • U.S. persons are taxed on worldwide income. The mere fact that money is placed in an offshore account does not put it out of reach of the U.S. tax system. U.S. persons are required, under penalty of perjury, to report income from offshore funds and other foreign holdings. The IRS uses a variety of sources to identify promoters who encourage others to hide their assets overseas.

      • Digital assets are being adopted by mainstream financial organizations along with many other parts of the economy. The proliferation of digital assets across the world in the last decade or so has created tax administration challenges regarding digital assets, in part because there is an incorrect perception that digital asset accounts are undetectable by tax authorities. Unscrupulous promoters continue to perpetuate this myth and make assertions that taxpayers can easily conceal their digital asset holdings.

      • The IRS urges taxpayers to not be misled into believing this storyline about digital assets and possibly exposing themselves to civil fraud penalties and criminal charges that could result from failure to report transactions involving digital assets.

      • “The IRS is able to identify and track otherwise anonymous transactions of international accounts as well as digital assets during the enforcement of our nation’s tax laws,” Rettig said. “We urge everyone to come into compliance with their filing and reporting responsibilities and avoid compromising themselves in schemes that will ultimately go badly for them.”

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