California Offshore Asset Protection Attorney, Sebastian Gibson

Offshore Asset Protection Advice and an Analysis of Recent IRS Efforts to Learn the Names of Holders of Offshore Bank Accounts

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 handed out these days to undeclared holders of offshore bank accounts is not very positive. Day by day, the IRS gets that much closer to learning the names of undeclared holders of offshore bank accounts, many of which just find it impossible to force themselves to become tax compliant.

Here are just some of the recent efforts by the IRS to discover the names of owners of undeclared foreign bank accounts and other offshore entities.

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.

Countries around the world, even Switzerland have recognized the threat terrorism poses to their way of life. As a result, financial institutions have been instructed by their countries to keep detailed information on their accounts to fight this terrorism threat. These banks can no longer tell countries like the U.S. that such information was never obtained or does not exist. It exists now.

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.

Today under the watchful eyes of the U.S. authorities, even the simple use of a wire transfer from a foreign bank account to the U.S. triggers a Suspicious Activities Report from the receiving bank to the IRS.

In March 2009, nearly all of the foreign tax haven jurisdictions agreed to exchange foreign banking information with other foreign governments and the U.S.

In April 2009, it was reported that the IRS was in the process of developing additional John Doe summonses on some of the other offshore banks identified by the IRS that were believed to be helping Americans evade taxes.

There are also other treaties, protocols and Tax Information Exchange Agreements between the U.S. and other countries. Liechtenstein has entered into such an Information Exchange Agreement. Switzerland and the U.S. have signed a new Treaty protocol.

In 2009, after serving a "John Doe" summons on First Data Corporation, which processes credit and debit card transactions, a settlement was reached with First Data which is believed by some to have resulted in the IRS obtaining account information on U.S. merchants depositing business receipts to foreign accounts.

Press reports have indicated that over the past year or two, the IRS has also obtained information on additional foreign financial entities, their bankers, advisors and promoters that may be used to seek additional treaties or summonses to be served by Department of Justice.

Its not just the IRS that has been putting the screws to tax haven jurisdictions. Offshore asset protection lawyers around the world are advising their undeclared clients who hold offshore accounts to come forward before tax authorities in their home countries find them first.

The Organization for Economic Co-operation and Development, an organization based in Europe has also been pursuing its own investigation of tax havens.

The Obama administration meanwhile has been sending Tax Information Exchange Agreements to Caribbean and Central American jurisdictions under which the U.S. Treasury Department can request assistance from foreign banks simply when there is an IRS audit of a U.S. taxpayer.

Tax Information Exchange Agreements obligate a foreign country’s banks to assist U.S. tax authorities in criminal and civil investigations. Most countries have signed these agreements as failure to do so can ostracize a country’s banks from international financial banking. Those which haven’t signed one of these agreements probably soon will be. These Agreements are reportedly non-negotiable and preempt a jurisdiction’s secrecy laws.

Foreign financial institutions that had or have Q1 status who failed to exercise due diligence under applicable rules that require them to know their customers or who knowingly and intentionally facilitated tax evasion by U.S. taxpayers today may not only face revocation of their Q1status, but may also face criminal prosecution.

There are also Mutual Legal Assistance Treaties which require signatory countries to disclose bank account information to the U.S. in connection with the investigation of serious crimes such as tax fraud. These treaties close prior loopholes and state that secrecy laws of the foreign jurisdiction may not be the basis for refusing to provide the information requested by U.S. tax authorities. Most countries in the world have signed these treaties with the exceptions of countries a person might expect and which would not make for safe havens for a person’s assets.

In April 2010, a client of HSBC, Europe’s largest bank pleaded guilty to conspiracy over assets kept abroad to evade U.S. taxes. In early March 2010, HSBC also said that data on up to 24,000 Swiss client accounts were stolen by a former employee and were obtained by authorities in France, where the ex-employee reportedly fled. If true, U.S. tax authorities can be expected to seek the names of any U.S. HSBC clients involved through a treaty request.

As a result of a Swiss court ruling in favor of one of the UBS account holders whose names were to be handed over under the settlement made by UBS and U.S. authorities, even more UBS account names may be required to be disclosed than the 4450 agreed to by the bank. The Swiss court found that the transfer of the data on these accounts would breach Swiss law. If the ruling is not dealt with by approval by the Swiss Parliament of the Treaty Request Agreement between the U.S. and Switzerland, the U.S. may return to court where they are seeking the names of all 52,000 UBS account holders.

On February 24, 2010, the Swiss Federal Council agreed to submit the Treaty Request Agreement reached in August 2009 between the U.S. and Switzerland to the Swiss Parliament for formal approval. If approved by the Swiss Parliament, Switzerland will be allowed to provide assistance to U.S. tax authorities not only in cases of tax fraud but also in more serious cases of tax evasion.

In recent months, handfuls of previously uncooperative foreign jurisdictions have rushed to enter into tax sharing agreements with the U.S. The Treasury Department is reportedly in negotiations with several other countries to exchange information regarding the accounts of U.S. citizens.

As a sign of the fruitful efforts being waged by the IRS, the IRS has opened offices in additional foreign countries such as Panama and has opened a new division to investigate tax evasion by global high net worth individuals.

Recent news articles have discussed new initiatives by the IRS and state tax authorities in need of money targeting companies, the wealthy, and tax delinquents.

On March 15, 2010, an IRS agent stated that U.S. tax authorities are expected within a month to begin prosecution of a foreign bank similar to the tax evasion case pursued against Switzerland’s UBS bank. So far unnamed, the foreign bank is reputed to be in trouble for the same type of behavior that got UBS in trouble.

Just as attorneys faced a flood of U.S. taxpayers getting off the fence when the settlement was announced with UBS for the disclosure of information on 4450 account holders in Switzerland, another flood of panicked taxpayers can be expected by attorneys when the prosecution of this additional bank is formally announced.

We can expect to see waves of tax evasion prosecutions over the next six to eight months, according to the same IRS agent who announced the impending prosecution of another foreign bank in the next month.

While foreign banks in countries such as Switzerland have reported outflows of funds previously kept in their banks by such high net worth individuals, at the same time banks have reported an entirely new wave of U.S. citizens depositing large amounts of money concerned about the ever increasing U.S. debt, the U.S. financial crisis, or who are simply unhappy with the current U.S. administration.

While some major banks in countries such as Switzerland are W-9 tax compliant, reporting such deposits to the U.S., one cannot but wonder how many other U.S. citizens in this new wave are people sending their money out of U.S. banking institutions because of their fears for the safety of their money in U.S. banks, or because of their fears of the current administration, and are either unaware of IRS reporting requirements or seeking to avoid paying taxes on their income and immediately putting themselves into hot water.

If a taxpayer has only recently taken this step and has now learned either that they have extensive reporting requirements or have learned of the strong likelihood that their foreign bank account or offshore trust information will be discovered by the IRS, there may still be time to become tax compliant without the payment of extensive IRS penalties. However, for such individuals, the time is often short.

The prosecutions of U.S. taxpayers with undisclosed foreign accounts and their investment advisors continues. When one reads the list of convictions, it is interesting to note that while some of the early taxpayers convicted are fugitives, those more recently convicted have all been caught.

In compliance with IRS requirements, as offshore asset protection lawyers, we must advise you that any asset protection advice and U.S. federal tax advice contained in this informational article and our analysis of the jeopardy facing holders of undeclared offshore bank accounts is not intended 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.