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U.S. Citizen Thinking Of Expatriating? Important Articles on What it Means

Due to the nature of our practice with thousands of Americans we have safely helped use a variety of tools including offshore trusts in a safe and legal way, we get lots of questions about expatriation.

Our position remains the same;  the best of usage of these tools is tax neutral and provides surety while allowing you to maintain your life and family inside the U.S. Below are some recent articles that address issues faced by those seeking to flee taxation by abandoning their U.S. citizenship forever.  – Ike Devji





Expats Face Steep Exit Tax Courtesy of Facebook

Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO


Shelf Corporations, Nevada, Wyoming and other Asset Protection FAILS


“Many times when these corporations or LLC’s are sold, the buyer is told that simply because the entity was formed and registered a few years ago, it has more value because it’s an ‘aged’ corporation,” said Ellsworth. “Buyers are sometimes told that the aged nature of the entity makes it more valuable for things like getting a line of credit, or just general credibility. It does not, and so that’s a serious misrepresentation.”


I love the quote above from officials from the state of Nevada. Nevada’s fraud problem, especially as related to asset protection and corporation sales is finally being addressed in a very real way, in fact they have a whole new “task force” out looking for people misusing the the state’s laws to commit fraud or sell bogus legal planing under false pretenses.


Why? Because it helps eliminate fraud and misrepresentation by lawyers and non-lawyer “mills” that sell these things with no regulation or consequence and stops the misuse of legal tools by crooks that want you and I to pay their share of taxes, avoid the law and use shell corporations for fraudulent conveyance, the number one requested use.

Q: I thought you always say “old and cold” is better and that you love aged corporations and other entities?

A: I do, but that’s because corporations that you have owned, run, and have properly funded and maintained for some period of time are typically strong, have records and can illustrate business purpose and usage  – THIS MEANS THE LEGAL PROTECTION WORKS.

This is different from the use of a shelf corporation, an old entity that someone recorded somewhere and that has typically been just barely funded and operated if at all by a third party who often promises to pass it to you “in secret”.

THIS SOLVES NO PROBLEMS FOR MOST PEOPLE - as they are typically funded too late, so  even if the corporation itself is old, your assets being inside it is not, and if you are being sold this as a solution to an existing exposure you are still committing FRAUD.

Thanks, Ike Devji

 See the Article here:

Nevada Securities Division Issues Cease and Desist to Wyoming Company

A Doctor’s Guide to Navigating Offshore Waters Safely – Asset Protection

A Doctor’s Guide to Navigating Offshore Waters Safely

By Ike Devji, J.D. | April 19, 2011

In the world of physicians’ legal and financial planning there is no term as simultaneously oversold, feared, and misunderstood as “offshore.” This is especially true at tax time, as all doctors and their practice managers have been bombarded by the promoters of various tax savings schemes that range in skill from “genius” to “criminal.” The legal jeopardy of using these tools the wrong way has been well illustrated by the recent crackdown on U.S. taxpayers including thousands of doctors who have been caught up and exposed by in the recent UBS scandal, as just one notable example among many.

As someone who has used these tools with doctors on a weekly basis for nearly a decade, I have seen a variety of approaches implemented with varying degrees of success. The following are core issues you must understand to use these powerful tools effectively and legally.

TAXES — All U.S. taxpayers have a duty to report any and all offshore accounts. The U.S. operates on a system of worldwide taxation, and while in certain limited cases money actually earned offshore may be tax exempt (see your CPA) it almost always carries a corresponding duty to report the income. If your primary motivation is to move money offshore and grow it free of taxes or at a lower tax rate, you are looking at the wrong strategy and creating a liability.

SECRECY — Secrecy is never part of any competently drafted offshore plan. Further, secrecy relies on the hope that you can open a “secret account” and no one will know about it and be able to reach it. It also relies on your willingness to lie about the existence of the account if you are ever asked about it in court or discovery proceedings, also known as perjury, which itself has substantial legal penalties.

TITLE — Who holds title to any offshore bank accounts is also crucial in effective use of the tool. If you hold title personally, including through a family member, or through a revocable trust in any form, assume the funds are accessible to a hostile party almost as easily as if they were located here in the U.S. From an asset protection perspective, using an irrevocable trust with an offshore third party trustee that is immune to U.S. court proceedings and a bank experienced in such matters in a protective jurisdiction is crucial.

THE BANK— Any serious offshore planning involves the use of a bank to be the custodian of funds. I advise that those seeking the protection these plans require use reputable first-world, (typically European) state-owned, and insured banks. New banking jurisdictions are emerging and there are reputable banks in most of the developed world, but few of them have experience in dealing with the issues you are likely concerned about. Further, international banks that have U.S. offices are not considered protective in any way; an experienced lawyer would simply move on the assets through a domestic branch. As an example, not only did the physicians that moved money to illegal unreported accounts through UBS commit tax fraud, they didn’t protect the money in any real way.

JURSIDICTION — Another vital issue is the jurisdiction of the account and the entities you are relying on to mange and protect it. Some offshore jurisdictions have laws and decades of history and infrastructure that specifically support the use of offshore trusts and accounts for legitimate purposes. A whole new group of jurisdictions would like to play in this arena and are aggressively promoting their laws, banks, and trust companies. While only time can sort out which of these jurisdictions are truly safe and politically and economically stable enough to trust with your life savings, I can tell you that few of us that practice primarily in this area would ever let our clients be a part of this “test.”

If you are considering offshore planning, keep these issues in mind and make sure the organization you are working with is staffed by experienced legal and accounting professionals with the resources necessary to do more than sell you a bank account and the proven infrastructure to help you achieve legitimate goals.

This article originally appeared at the nation’s leading practice management resource, where Ike Devji is regular contributor. It is reprinted here with permission.

People Don’t Live In Delaware. But They Keep Their Money There.

We see lots of discussion about the “best” legal & financial jurisdictions. If you are familiar with my writing or the work we do in protecting billions of dollars for our clients you know what I think of most domestic jurisdictions and that we think that they have little or no value for Asset Protection despite any nominee corporation b.s. and promises of secrecy that the snake-oil salesmen in various states pedal.

The link below is to an interesting piece about Delaware, which is also now promising Asset Protection through domestic asset protection trusts that we never use because they fly in the face of full faith and credit laws and we don’t want our clients to be test cases.

Yours, Ike

See the story here on DEALBREAKER:

Its beaches don’t compare with those of Bermuda or the Cayman Islands. You can’t ski there. But the most boring state in the union is best damned tax shelter on earth.

The First State is finally first at something else, according to the Tax Justice Network. It’s the best place for non-Americans to hide from their taxmen, earning the august moniker, “most secretive financial jurisdiction.”


The IRS is currently running a “Voluntary Disclosure Opportunity” that expires October 15, 2009.

You have likely heard reference to this amnesty event in the context of allowing those with “secret” offshore accounts (see my other posts on this amateur practice) to report them and get square with the tax man – but there are many other situations that require reporting and which are often intentionally or accidentally overlooked – be sure you and your clients are fully aware.

If any of the following situations apply in your case, make sure that you file proper forms to report these transactions and if required declare income prior to the extended deadline of October 15, 2009 in order to avoid severe and harsh penalties including criminal penalties:

1. Do you have a foreign bank account including a security account, credit
card account etc outside the United States that you did not report as
required by law?

2. Do you have unreported income from a foreign country?

3. Do you own any unreported foreign entities such as corporations, trusts,
partnerships or disregarded entities?

4. Do you own Mexican real estate through Mexican Bank Trusts?

5. Do you have rental income from property outside the United

6. Did you receive unreported inheritance from outside United States?

7. Are you a beneficiary in any trust formed in foreign jurisdiction? Did
you receive any unreported distribution from the trust?

8. Have you sent money outside United States by way of loan, equity etc in
last few years and not reported it to the IRS?

If any of the above situations apply to you, please contact professional accounting help as soon as possible so that they can help you – Penalties will be exceptionally harsh after October 15, 2009.

My thanks to Pallav Acharya, CPA, FCA, CIM of CPA global Tax & Accounting
for this list. Phone: (480) 889-8949 – Pallav is in Scottsdale, AZ and works with clients all over on international taxation issues.