How to Avoid Falling into an Offshore Tax Fraud


Offshore tax planning is a very successful and completely legal way of minimizing U.S. taxes. This is the very reason many people are tempted to start offshore ventures in an attempt to save money. As a result, however, a lot of dishonest so-called tax attorneys and CPAs emerge, promising wonders, but in reality, just delivering an offshore tax fraud. In this article, we’ll give you the basics to help you recognize the features of a fraudulent offshore structure and avoid it.

What is a good offshore practice

  • Incorporating an international business
  • Creating an offshore asset protection structure, such as a trust
  • Choosing a jurisdiction that does not tax you locally
  • Using an experienced tax attorney or CPA to help you with choosing the right business structure for your needs and individual case

What are the offshore tax fraud indicators

  • An advisor who tells you to open an offshore foundation, register it as a charity and promises you won’t need to pay taxes is leading you to an offshore tax fraud. Only U.S. licensed charities (with a 501 (c)(3) status) are eligible for charitable deductions.
  • Anyone who guarantees you can have the complete privacy of accounts and finances by going offshore is not being honest and leading you to an offshore tax fraud. A good tax attorney or CPA will create a tax plan for you that will be reported to the IRS but will have certain components that will protect the privacy of your assets from creditors.
  • Don’t believe a person who convinces you to use nominee directors that he or she presents to you with the idea to save on taxes. It won’t work and is definitely an offshore tax fraud.
  • You need to be able to back up the economics and transactions in your tax plan. If you can’t the chances are you have fallen into an offshore tax fraud.
  • The 2% plan is another type of an offshore tax fraud because it lacks economic substance in the eyes of the IRS.
  • If your offshore corporation has no employees and operations outside of the U.S. it is an offshore tax fraud.

If you want to start an offshore business or a venture to save you money on taxes and avoid claims of an offshore tax fraud, do get in contact with us. You can email us at support@fascpaconsultants.com. We are looking forward to helping you protect your wealth the right way!

Fulton Abraham Sanchez, the founder of FAS CPA & Consultants of Miami, FL, is a Certified Public Accountant specialized in Offshore Banking Consulting. You can email him to fa@fascpaconsultants.com.

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9000 SW 137 AV Suite 224 Miami, FL 33186 T: 786-462-7899 E: support@fascpaconsultants.com

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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