Americans aren't Reporting Offshore Accounts
April 6, 2000
Whether driven by financial privacy concerns or simply to avoid U.S. taxes, Americans are opening overseas bank and financial accounts at a record pace. But if the goal is shielding income from taxes, the Internal Revenue Service warns that it is easier to get caught than people think.
- The number of reports of foreign bank and financial accounts filed by U.S. individuals and companies grew by 20 percent from 1995 to 1999, to 166,127.
- But it has been estimated that fewer than one in 10 follow the instructions on their federal income tax return to file the reports.
- It is also estimated that $70 billion in revenue is lost to the U.S. through foreign accounts.
- Canada, the United Kingdom, Japan, Switzerland and Germany were the top five countries disclosing such accounts.
The Organization for Economic Cooperation and Development launched a campaign two years ago to pressure offshore tax havens to revise their laws so that banks there could be forced to divulge customer information to foreign governments conducting tax investigations.
Some important offshore centers -- including Switzerland, the Cayman Islands and Bermuda -- have indicated a willingness to bend on the issue.
Source: Michael Allen, "Secret Offshore Bank Accounts Aren't Always So Secret," Wall Street Journal, April 6, 2000.
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