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How Does the Taxpayer Access the Funds in Offshore Accounts? - Abusive Tax Schemes

Although the unreported funds sitting in the offshore bank account are earning interest or being used for investment purposes, most of the time the taxpayer wants to have access to the money. There are several methods used to get the funds back to the taxpayer, but the following are the most common.  

Credit/Debit Card: One of the most popular methods in recent years has been use of the bankcard to access offshore funds.  Once the foreign bank account is established, the taxpayer is issued a bank card.  The taxpayer can use the bankcard in the to withdraw cash and to pay for everyday expenses.

Fraudulent Loans: The taxpayer's International Business Corporation (IBC) will make a loan to the taxpayer.  The funds are wire transferred back to the taxpayer's U.S. bank account.  Since these wired funds are allegedly loans they are not taxable.  Many times ownership of the IBC is through bearer shares so it is very difficult to prove that the loan is a complete sham.  Further adding to the difficulty is the fact that the promoters provide their clients with loan documents to make the transaction appear legitimate.

How Do You Report Suspected Tax Fraud Activity?
If you have information about an individual or company you suspect is not complying with the tax law, report this activity.


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Page Last Reviewed or Updated: 03-Dec-2013