Offshore Banking - Are Offshore Bank Accounts Legal And Why Would You Want One?

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NOTE: The Voluntary Disclosure policy does NOT apply to illegal source income. For example, unreported drug trafficking income will not qualify for the Voluntary Disclosure procedure, as that type of income is illegal under other (non-tax) laws. In contrast, there is nothing illegal about earning interest income from a Swiss bank account, so it is not illegal "source" income. However, the failure to report such income on your tax return can be a tax crime. Therefore, the Voluntary Disclosure policy can apply to the Swiss interest income.

When I hear of millionaires investing their money into useful system account accounts and only paying a small portion in taxes, that just tells me that the middle class on down are who is actually paying the president's paycheck. But, the millionaires have the president's ear. So, we pay but where is our voice?

offshore bank account Honesty - Always be honest with the IRS. Lying to them never works. It only gets you into even more trouble with them. You can start by actually participating in the voluntary disclosure program. This tells the IRS that you are not deliberately running from them or hiding your financial activity from them. Fill out all the forms correctly without tossing numbers down just to fill out the form and get it filed in time.

These lenders will have a look at your offshore banking. You need not worry if a credit history will be insisted for opening a bank account. Most of the banks do not insist on a credit history for opening an account with them. If you have an operating bank account, that is a positive factor that may be considered by lenders for extending a loan. The very fact that you are having an operating bank account shows to the lenders that you are able to manage your finances fairly well. Even the same bank will consider extending a loan to you if your account is clean without any returned checks.

Having a bank account outside the U.S. is not illegal if you report your interest income each year and if you disclose the account. Generally, accounts with a balance of $10,000 or more must be disclosed each year on a Report of Foreign Bank and Financial Accounts or FBAR as they are commonly called. The FBAR filing is separate from one's yearly tax return.

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