The easiest way to evade tax and pile personal savings is to tuck away money in offshore/overseas accounts. Mitt Romney, the Republican presidential candidate is currently enjoying attention for having put away his ‘vast wealth’ into overseas establishments. However it is not Romney alone, who stocks money in Swiss bank accounts, provides funds to third world countries (money laundering) and clever as he is he has allocated all asset listings to a certain omnipresent ‘Uncle Sam’.
But can Romney rest in peace? Can the ‘Uncle Sam alibi’ silence his political foes and also the common mass? This is, in fact, a warning for the others to take due notice of summons for the Tax Justice Network. TJN conceptualized by British Houses of Parliament is a research center that analyzes and reports on ‘how tax evasion on part of high net worth investors affects national economy’. In its latest report ‘The Price of Offshore revisited’ it presents a detailed study on financial assets invested in foreign fiscal centers and secrecy structures. It traced $21 trillion (a total of US and Japanese economy combined) as reserved with overseas banks. This amount is exclusive of non-financial assets like real estate holdings, yachts & bonds, and equities, etc. if these non-cash assets are added to $21 trillion, the amount increases to $32 Trillion, TJN reports.
The IRS is trying hard to convince high net worth investors to reveal detailed property holdings in order to clear tax with the US government. In fact, the IRS has designed two amnesties to encourage the investors to bring back national currency from their foreign bank accounts. Offshore voluntary disclosure programs this year have brought in more than $5 million as taxes, interests, and penalties. Almost 33,000 taxpayers revealed their financial holdings in order to dodge criminal charges for evading taxes.
The offshore voluntary disclosure endeavor is an ongoing process. Penalty charges for those that have avoided paying taxes for overseas assets have gone up by 27.5 % from 25% in last year’s program. However, the amnesty is far better for high net worth investors for it charges only a penalty fee. On the other hand, if the IRS discovers foreign assets after the amnesty period is over then they might as well confiscate all fiscal assets or might even send the investor to federal jail.