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What is so bad about offshore bank accounts?

On Behalf of | Sep 28, 2018 | Tax Evasion

There is something very alluring about offshore banking that makes it a common theme in movies and novels. Usually, the person engaging in the behavior is, at least implicitly, doing something illegal by using the offshore account or, at best, is trying to cover his tracks.

In real life, people in the Chicago area and in other parts of the country can and do get accused of tax evasion in light of their holding offshore account.

However, this does not mean that there is something inherently bad about offshore banking per se. While ultimately whether or not to hold an offshore account, that is, an account in a foreign bank, is an investment decision, generally speaking, they are usually legal and can offer lawful tax advantages.

On the other hand, a person setting up such an account must not be doing so to hide money or make illegal income that he or she has no intention of reporting. Moreover, setting up the account must be above board, that is, for legitimate reasons as opposed to for money laundering or other fraudulent purposes.

Finally, a person will need to follow all applicable laws when setting up an offshore account and will need to keep appropriate records of doing so.

Banking in a foreign country is not illegal, but it unfortunately can arouse the suspicion of tax authorities, perhaps because it has procured for itself a bad reputation over the years. An Illinois resident can and should rely on quality legal advice with respect to his or her offshore accounts, and he or she may need representation in the event of a tax controversy.