US Residents Beware of Dangerous Offshore Products and Banking

From the start — this was my territory. I know the legality and practicality of the offshore world better than all, but, perhaps, 500 experts in the world. If you don’t know any of these people (and none of them on the internet are trying to sell you anything) then please listen to me with both ears.

1. I know many US residents want to diversify their banking and portfolio to other countries. I don’t blame them.
2. I know many Americans are tired of the tax system and are looking for relief.
3. I know many US residents know little about “offshore” especially with the bombardment of attractive banking deals in Belize, Panama or “other jurisdictions”.

I will tell the truth.

It is nearly impossible for a US resident/citizen to legally exit the US tax system. It is impossible for a US citizen to create a bank account he/she controls with more than $10,000 CUMULATIVE ANYWHERE IN THE WORLD without reporting it on his regular tax return and filing special information that allows you to actually list the bank and account number. Unless the bank is in the US

There are several ways to work around all of this. I’ve never seen any of these methods ever mentioned on the internet and my emails are flooded with offers.

1. It is almost impossible to get a foreign bank account without showing a utility bill. If the utility bill comes from the US, then why would you even try?
2. There’s no point in buying an offshore company (IBC) unless you can get a bank account that YOU DON’T HAVE TO REPORT TO the IRS.
3. It immediately limits your total non-US deposits worldwide to less than $10,000. So why try?
4. Managing offshore bank accounts from within the US isn’t just stupid, it’s a death wish. If you don’t watch the news, these government people are very, very serious about catching people like you and setting an example for you.

Rules: The Panama Foundation is stupid. First: if YOU get a bank account for it, you’re screwed. Second: if you let someone else open an account for you, you’re screwed.

Rule: You can’t trust other people with your money unless you can trust them with your life too. Even in the US The days of trust are OVER! For example, unless you have family in Panama that you trust, then you don’t know anyone you can trust in Panama. Panama is a synonym for any place. You can’t trust banks or lawyers. Period. There are no exceptions.

Rule: If you want to diversify your portfolio to foreign locations, then GO THE PLACE and check it out. I’m not a big fan of US banking, but I have to tell you that once you’ve been to some of these places, you don’t want to exchange $20 at a local bank, much less leave your money there. You go to some restaurants and grocery stores and see them holding every bill you give to the light to check for counterfeiting. What does it mean?

THIS IS WHAT WORKS:

• Find HSBC near you in the US Open an account. Nothing to report.
• When you are overseas, look for another HSBC. Show your HSBC US banking bona fides and your account will be opened smoothly. Do not put more than $10,000 into the account. HSBC is a synonym for any solvent foreign bank with branches on US soil. Most advisors say never do this. They are right. But since it is very difficult to get an offshore bank account as a US citizen without a reference letter from your US bank, then I each disagree with the experts. Get a bank account at a local branch of a foreign bank and then open a real account with your US credentials. Not perfect in a game of hide and seek, but not much else.
• If you have real wealth, but not enough to want to spend $50,000 on a real international attorney, start reading about “dynastic guardianship” and check out Nevada as a jurisdiction. It is a bulletproof US entity that can withstand a government or creditor challenge or your death much better than an offshore trust.
• If you’re really serious, be a RESIDENT somewhere else. Not a citizen. A resident. It’s much easier and doesn’t cost millions of dollars for an economy passport. Once you become a resident, with the appropriate ID, you can open a bank account in your new country of residence that is unrelated to your US document. Is there still a reporting requirement if the limit is reached? Yes.
• If you wish, you should explore the “territorial tax” or “tax-free” jurisdiction of your place of residence. See if your dream wish list can be matched against countries that have a tax advantage.
• If you’re happy, then buy a nice condo in a place you don’t really mind living in and then rent it out. If you can get a mortgage on it, great. But foreign lenders usually want to drop 50%. Make a cheap condo. The condo gives you the utility bills you need to open a bank account. But once you’re “there” sometimes the utility bill terms get lost because your legal address is on your government ID By the way — YOU CAN USE YOUR IRA FUNDS to buy foreign real estate. If you’re nervous about the state of the US, clear out your IRA and buy foreign real estate. Do I need to tell you that due diligence is very, very important. Don’t buy anything that isn’t where you probably should be living. You probably should.
• If you can’t afford cheap foreign condominiums, think all things over internationally and buy some gold coins or bullion before you have to register.
• If you are a resident of a bona fide foreign country, there are major exceptions to US taxable income. Take. That will save the heap there.
• Don’t be too sweet about encryption and secrecy. You hide in plain view.
• For God’s sake, if you’re not a billionaire, don’t give up your US citizenship. Just get out if you don’t want to stay. Times change. This is a great passport and with the tax exemption you will rarely pay US taxes anymore.
• Learn to make money through trading or portable work before you move from the US you carry your cash flow. And remember the $10,000 banking limit? That’s the money you have IN THE BANK ACCOUNT. It’s not money that you make and then you take from the bank and keep it at home or in a safe. Remember, you declared it even if you didn’t pay taxes on it. This is legal.

THIS IS WHAT THE BEACH GUYS DON’T SAY — IT’S ILLEGAL

• There is absolutely no way to open a bank account for a COMPANY you own and put more than $10,000 into it and not report it, even if you don’t go into the bank account. If you don’t report it is a serious crime and prima facie tax evasion. No doubt you will also be charged with money laundering.
• If you do get into a company account, even if you are a minority shareholder, and it has more than $10,000 in it and you don’t report it to the US, that is also a crime and prima facie tax evasion. And money laundering.
• Should you file a US tax return and fail to report foreign income? More problems.
• If you set up a trust, but you indirectly control it, it’s a crime not to report it annually through a very annoying IRS filing that is about 40 pages long.
• If you set up a trust with real money in it – in an offshore jurisdiction – but you don’t control it, you are stupid. I hope you see the rock and the unruly place.
• There are guardians you can trust. You don’t know any of them or you won’t be reading this.

END BEACH TRAPS

• Many decent-sounding banks have low entry requirements. They don’t dig too deep before they will “receive” your deposit. Great online service. Encryption. Personal. Multi-currency account. Your confidence grows. You move more funds there. Maybe you’ve decided you’re going to play the tax game and you’re not actually declaring all the money on some state tax returns. Your balance is piling up. One sunny day, say, USD$100,000.00 and you decide to withdraw $25,000.00. Suddenly your account was frozen by the “compliance” department. They’ll want to see another copy of your passport, your utility bill again (oh, you let that rental condo go?), they’ll want a statement and proof of origin and, yes, they might even want to see a tax return. Guys, I’m not talking about mud banks in Belize. I’m talking about a good Swiss bank. And not the owner of a US citizen. And a year to make it unravel.

CONCLUSION

These are difficult and dangerous times. Everyone wants your money – which is very fast with most of your life. your country. other countries. Bank. government agency. County property tax authorities. State or provincial government. Sales tax authority. Added to the “official” pirate list, you now have an offshore pirate looking to sell you useless legal stuff.

Keep your money where you are. If you want to diversify, go somewhere and do something. As in go exploring options and then exit. If you don’t have that kind of money and you are still scared, join a club. And keep your money hidden in your house and/or buy silver and gold.

NO third party investment opportunities. If you don’t pay attention to your money, it will be lost. Don’t lend. All loans are bad loans. Invest in and near yourself.

The real bad times haven’t even started yet. This is, at best, the eye of the storm.

Author: Jack Campitelli, JD has lived and worked in a number of tax-advantaged foreign countries. He has taught asset protection in and outside the US. He knows most of the people in this business. The website is jackcampitelli.com. His recommended de jour books are “Trade and Portable Work” and “Bye Bye Big Brother” available at ascolibooks com. If you want to start an internet business as a portable commerce, then consider his Legal Guide to Websites

Jack really no available for “offshore” consultation!

Copyright 2010 by RioneX IP Group LLC. All rights reserved. This material may be freely copied and distributed provided this copyright notice, author information and all hyperlinks remain intact.

by Jack Campitelli, JD

10 September 2010

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