Private Offshore Accounts for US Citizens

(most of this information came from an interview with some friends of mine in the business of providing offshore banking services. They service predominantly non-US citizens since it is just a whole lot easier. However, they had some interesting tidbits for those that are looking to move some money offshore of open an offshore bank account as you'll see below).

Sometimes US citizenship isn't all it's cracked up to be. While immigrants from around the globe sometimes view the US as their opportunity for financial advancement, citizenship brings with it it's own set of challenges. This is especially true for those trying to offshore with their assets.

If you are a US citizen resident anywhere in the world, or a US resident for tax purposes, and have a financial interest, signature authority, or other authority over any financial accounts, including bank, securities/stock, or other types of financial accounts in a foreign country and the account exceeds $10,000 at any time during the calendar year you must report that relationship each calendar year with the Department of the Treasury on or before June 30, of the succeeding year by filing TD F 90-22.1


Of course, when you do, you automatically add your name to a FINCEN database of potential money launderers. This means the government will scrutinize everything you do. This is a Treasury form, NOT an IRS form, so you do not even have the very limited privacy protection that goes along with IRS filings.

So what are your choices?

The course most often chosen is simply not to file. This is illegal and can carry a fine of up to US$500,000 and prison time. That being said, I have never known anyone who was prosecuted simply for not filing this form. The government’s preferred modus operandi is to prosecute a person for tax evasion and/or money-laundering, and then add every year they did not file this form as a predicate count in order to run up the total number of years in prison the defendant is looking at.

Some chose to file the report and hope for the best. So long as everything you do is legal and squeaky clean, compliance is always the best route.

That being said, there are two more choices that allow you NOT TO FILE AND NOT TO BREAK THE LAW.

FIRSTLY, you can hire a bonded fiduciary who signs on foreign accounts on behalf of a company, or other entity; but in that case you have to trust the fiduciary, make sure the bond is bulletproof, AND do your company paperwork in exactly the proper way so you don’t end up still having “other authority” as the IRS defines it, and defeating the whole exercise.

Also, one can establish a gold repository account, at some place like the Perth Mint where you could be the signatory on the account and STILL LEGALLY NOT REPORT IT because, properly set up, it is a storage contract, NOT a financial account.
For many people this is absolutely the very best choice. If you:

1. avoid using a US representative, and
2. set up the account outside the US, and
3. make the payment through a non-US payment service,the whole transaction can be handled privately and without filing any government reports.

There are other steps you can take to add layers of asset protection as well—all without filing special reports or tax filings. The best thing about this option is that you do not have to trust anyone else to sign on your account!

Happy Offshore Banking!