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U.S. News Quotes Zhanna Ziering on Risks Related to Holding an Offshore Account

April 26, 2018, U.S. News & World Report

Before opting for an offshore account, remember that keeping your cash in a foreign bank isn't entirely risk-free.

"It's only lately that we've become so global that we can go to another country and take money out of an ATM," says Zhanna Ziering, member of Caplin & Drysdale [] in New York City. Even then, there may be foreign transaction fees or other costs associated with converting currency. Retirees who buy a condo in another country may find it beneficial to have a bank account in the local currency to pay their bills.

. . .

The problem is this strategy is illegal. By law, U.S. citizens need to pay taxes on all income, regardless of where it is earned. That means any interest or gains earned on foreign investments must be included on federal tax returns. However, in the past, countries such as Switzerland and Bermuda didn't require information about U.S. account holders to be released, which meant people could easily conceal their earnings and avoid paying taxes.

That's changed in recent years, as the U.S. has been actively working to eliminate the use of these tax shelters. Most notably, agreements have been made between countries to facilitate the release of banking information from traditional tax havens like Switzerland.

It's no longer a question of if someone will be caught for foreign tax evasion but when, Ziering says. "[It] was simple before the IRS enforcement," she says, "[but] using offshore accounts to hide money doesn't make sense anymore."

For the full article, please visit U.S. News & World Report’s website.

Excerpt taken from the article “Want to Put Money in an Offshore Account? Here's What You Need to Know” by Maryalene LaPonsie for U.S. News & World Report.

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