A divorcing spouse seeking hidden marital assets; a creditor pursuing the payment of a debt; or an IRS revenue officer collecting a delinquent tax; may sometimes be looking for assets hidden by those offering offshore asset protection services.

According to Equity Development Group’s “Why Go Offshore” link-page, placing bank accounts offshore protects them from “predatory attorneys”, ex-spouses, disgruntled employees, etc.  Another asset protection service, (Offshore Services Inc. of Belize), alleges that “A Belize Offshore Trust” offers tax reduction, protection from lawsuits and other benefits.  The website of Dominion Investments (Nassau) Ltd. similarly offered “international tax planning, asset protection, and other wealth preservation techniques” until the arrest of its proprietor during a federal undercover sting operation for money laundering.

As the Internal Revenue Service’s Offshore Credit Card Program recognizes, an asset protection scheme can be as basic as first parking monies in an offshore bank account and then using a credit or debit card drawn on that same account in order to make domestic purchases.  Offshore asset protection schemes involving tax evasion are referred to as Abusive Offshore Tax Avoidance Schemes by the Internal Revenue Service.  According to the Internal Revenue Service, such schemes typically involve:

  1. Foreign trusts
  2. Foreign corporations
  3. Foreign (offshore) partnerships, LLCs and LLPs
  4. International Business Companies (IBCs)
  5. Offshore private annuities
  6. Private banking (U.S. and offshore)
  7. Personal investment companies
  8. Captive insurance companies
  9. Offshore bank accounts and credit cards
  10. Related-party loans

Perhaps the most important thing to remember is that a good legal strategy can be an effective countermeasure to all of the foregoing; and many times lead to the recovery of assets hidden offshore.

Edited February 25, 2015

Copyright 2007-2015 Fred L. Abrams