California Asset Protection Attorney, Sebastian Gibson
Asset Protection - Offshore Asset Protection and Bank Secrecy Advice from a Trusted Asset Protection Law Firm
If you’ve been searching for California asset protection lawyers or offshore asset protection attorneys in California and haven’t found the asset protection attorney in which you can be confident when retaining a lawyer for your asset protection, voluntary disclosure, offshore trust protection and family limited partnership matters in California, Sebastian Gibson is the asset protection attorney you’ve been looking for.
California Asset Protection Lawyer
With over thirty years of experience handling international matters, with law degrees in both California and in Great Britain, and years of international experience in London as well as decades of experience in California, California asset protection lawyer Sebastian Gibson brings a wealth of experience to the table and was chosen one of the 2011 Top Lawyers by Palm Springs Life Magazine.
Offshore asset protection advice given out by asset protection law firms today has changed dramatically from that given out in the 1990's due to the crumbling of bank secrecy worldwide.
Bank secrecy in the 21st Century is quite a different story from what it once was. Indeed bank secrecy is today, a misnomer. There is still bank privacy. Banks will not give out a bank holder’s name, balances or other account information to other individuals without an individual’s permission. But bank secrecy as far as the IRS and other monitoring U.S. agencies goes, is a thing of the past. Amazingly, this change has mostly come about only in the last decade.
Even after Switzerland signed a Mutual Legal Assistance Treaty with the U.S. in the 1990s that allowed for secrecy to be broken and information given only where a criminal investigation was concerned, secrecy was still maintained where U.S. account holders were simply failing to report income from their foreign bank accounts. So long as Americans weren’t involved in criminal activities (tax evasion not considered such an activity) they could still rely on Swiss secrecy. Not today. Today, the failure to report a foreign bank account or other financial entity or income from that account or entity is a criminal activity and foreign countries must exchange bank account information with the IRS.
Today the IRS feels confident that those persons who failed to participate in the Voluntary Disclosure Program in 2009 will be identified. Without any further amnesty programs currently in place, those taxpayers with unreported foreign financial accounts or entities and unreported foreign income are subject to the full arsenal of IRS penalties and criminal prosecution by the Department of Justice.
What has changed? Everything. The changes from just a decade ago are the difference between night and day.
The whole process really only began to unravel in the early 2000s. Since then, however, it has snowballed. Having suspected for some time that credit and debit cards were being used to provide easy, untraceable access to secret offshore accounts in tax haven countries, the IRS utilized one of their most useful tools in their arsenal, the "John Doe" summons to obtain information and issued the summonses to major credit card companies for account information in approximately thirty different countries for the tax years 1998 to 2001.
At the same time, the IRS served the summonses to airlines, hotels, rental car companies and internet providers for information on transactions using such credit and debit cards. It was estimated that up to two million U.S. customers had credit or debit cards issued by banks in offshore countries. Millions of records were turned over to the IRS by the credit card companies alone and as a result it was speculated that thousands of credit card users were given civil examinations by the IRS and dozens of cases referred for criminal investigation.
After the terrorist bombings on 9/11, the efforts by the U.S. as well as other countries increased to study the banking activities of possible terrorists and terrorist organizations. In seeking this information, the IRS has also been able to obtain a wealth of information concerning foreign bank accounts of its own citizens in offshore jurisdictions.
After 9/11 a U.S. surveillance system was stepped up to review large cash transfers that could be the movement of funds by terrorists, or linked to fraud, money laundering or other criminal activity. Such a system was undoubtedly in place for some time, but as a result of the events on 9/11, the monitoring activity took on new importance. A side result of this increase in monitoring was the closer scrutiny of offshore accounts by U.S. taxpayers who had once thought their offshore account transactions were secret or at least would not be noticed by the IRS or other government agencies.
Banks either in the EU or who route money through the EU are monitored by the CIA pursuant to the Brussels Agreement which gives the CIA access, upon their demand, to bank accounts in the EU. Although developed to monitor terrorist movements of money, the Agreement also facilitates U.S. tax authorities.
After the Qualified Intermediary Program (Q1) passed in 2001, foreign banks became required to share information with the IRS. After 2008, they had the additional requirement to investigate whether any U.S. persons were owners of accounts and report them to the IRS.
Thousands of foreign banks are Q1 banks. Failure by a Q1 bank to fulfill their obligations can result in the lack of access to the U.S. market, something no Q1 bank wants to lose. For a Q1 bank to lose access to international financial transactions would be to lose status and a significant portion of their deposits and profits.
In 2007 and 2008 bank secrecy truly began to unravel when a U.S. taxpayer entered into a guilty plea and then cooperated against his Swiss UBS banker. That banker was later arrested and he cooperated with authorities by providing his client list as well as documentation showing a pattern of marketing practices at UBS which allegedly encouraged U.S. taxpayers to evade U.S. taxes. That’s when offshore asset protection attorneys began to have a glimpse of what was coming.
In 2008, a former employee of a trust company affiliated with a bank in Liechtenstein allegedly stole customer data and provided it to tax officials in the EU and U.S. under a new whistleblower provision. Since then, it has been reported that other persons affiliated with offshore banks have stolen customer data and have approached tax authorities seeking rewards as whistleblowers. Tax authorities are, in many cases, only too happy to comply.
Later in 2008, a U.S. Federal District Court authorized the use of "John Doe" summonses on UBS in order to obtain records of all U.S. taxpayer accounts it held during the period from 2002-2007 for which U.S. taxpayers attempted to hide their identities from the U.S. At the same time, the IRS sought assistance under a Swiss-U.S. Treaty for records of accounts in which blocking entities had been used to hide the account’s owners and assets.
In a widely publicized event, in February 2009, UBS AG Bank, the largest bank in Switzerland, entered into a deferred prosecution agreement with the U.S. (not approved by Swiss authorities) on charges of conspiring to defraud the U.S. It was alleged that UBS had helped U.S. citizens to evade IRS reporting requirements.
In the repercussions from the UBS event, in February 2009, UBS AG Bank, the largest bank in Switzerland, entered into a deferred prosecution agreement with the U.S. (not approved by Swiss authorities) on charges of conspiring to defraud the U.S. It was alleged that UBS had helped U.S. citizens to evade IRS reporting requirements.
At first, UBS handed over the names of 250 to 300 U.S. taxpayers to the Department of Justice. What was perhaps most surprising to the account holders was that they were not notified before their information was released to U.S. authorities and that Swiss authorities allowed the transfer of information to occur. Then UBS agreed to disclose 4,450 additional taxpayer names and pay $780 million to avoid prosecution and admit that it had assisted those taxpayers to evade taxes.
This deal was later blocked after a Swiss court ruled in favor of one of those account holders, the court finding that the transfer of the data on these accounts would breach Swiss law. If the ruling is not dealt with by changes to the U.S.-Swiss Treaties and Agreements or by changing Swiss law, the U.S. may return to the U.S. District Court for the Southern District of Florida where they are seeking to enforce the John Doe Summonses served in early 2008 to learn the names of an additional 52,000 UBS account holders.
If UBS wishes to continue to do business in the U.S., as we expect it does, it is anticipated that UBS will eventually hand over the information on any accounts that are not W-9 compliant.
About the same time as the UBS situation was unfolding, Credit Suisse, another large bank in Switzerland asked its wealthy U.S. clients with offshore accounts to sign W-9 forms which require Credit Suisse to withhold at a rate of 28% any taxes that could be owed to the IRS. Credit Suisse declined to say if this was its first request of these clients or whether this request had been made of it’s account holders on previous occasions as well. Accounts held by U.S. taxpayers who decline to fill out the W-9 forms are considered "undeclared" and must sell any U.S. investments held in those accounts. By requiring its account holders to do this, Credit Suisse can maintain its status as W-9 compliant.
The account information requested of UBS was for undisclosed (non W-9) accounts of U.S. domiciled clients who directly held and beneficially owned accounts in excess of one million Swiss Francs at any point in time from 2001 though 2008 and for which a reasonable suspicion of tax fraud or the like could be demonstrated, or U.S. persons who beneficially owned offshore company accounts and for which there was a reasonable suspicion of tax fraud or the like.
The criteria for activities presumed to be fraudulent conduct included any activities that would lead to a concealment of offshore assets or hiding income based on a "scheme of lies" (and if a scheme of lies was found, any accounts over $250,000 or so would need to be included) which included account holders using false documents, engaging in certain fact patterns, or using calling cards to disguise their activities.
For offshore company accounts, activities presumed to be fraudulent conduct included concealment of offshore assets and under reporting income based on a scheme of lies or submitting false documents. This scheme of lies could be evidenced by, among other things, using calling cards or special mobile phones to disguise activities, using debit or credit cards to deceptively transfer funds or pay personal expenses, disguising wire-transfers to accounts in the U.S., using related entities or persons as conduits to transfer offshore company account funds, or loaning money to the U.S. beneficiary owner from the offshore company’s account.
In compliance with IRS requirements, we must advise you that any U.S. federal tax advice regarding bank secrecy contained in this informational article is not intended by our offshore asset protection attorneys to be used nor is it published in order for it to be used and you may not use it for the purpose of avoiding penalties or fines under the Internal Revenue Code. It is not intended to be used nor is it being published in order to promote, market or recommend any specific transaction, tax-related matter or estate planning tax scheme to any party.
California Asset Protection Attorney, Sebastian Gibson
Sought out to be a writer for California’s two largest and most prestigious legal newspapers, California asset protection attorney Sebastian Gibson’s articles have been published in the Los Angeles Daily Journal and the San Francisco Daily Journal. Today thousands and thousands of people visit this website and his blogs monthly for useful advice and thousands more follow him on Twitter for his humor.
One of the best asset protection attorneys for people in California to follow for his humor and wit, one of the funniest California asset protection lawyers as well as one of the top humorous California asset protection attorneys people follow on Twitter, California asset protection attorney Sebastian Gibson has been called "brilliant," "hilariously funny" and a "legend."
It matters more than you think who you call for your asset protection and other legal matters. When it matters most, call California asset protection lawyer Sebastian Gibson. When it’s time to hire a California asset protection attorney, hire a legend.
