| Tips On Choosing An Offshore Tax Advisor |
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Most people are rightly confused by the enormity and complexity of the
U.S. tax law.
But the part of the U.S. tax law that applies to cross border or foreign transactions by U.S. persons or to U.S. transactions by foreign persons is absolutely the most complex and ambiguous portion of our tax law.
Someone described the international elements of the U.S. tax law as a riddle, inside a maze that was within an enigma.
Nonetheless, there are many hundreds if not thousands of web sites that claim to offer tax advantages to those who venture offshore or who decide to invest offshore or to establish an offshore trust for asset protection. A great many of these web sites exist to sell you some kind of pre-packaged arrangement that purports to help you to avoid some U.S. taxes. The great majority of them are uninformed at best and fraudulent at worst.
Before you agree to any kind of international financial arrangement, whether for business, for investment or for asset protection, you need to seek help from a U.S. tax professional who is familiar with the international part of the U.S. tax law.
In many cases, the person who is trying to persuade you to go offshore is a lawyer who will sell you a trust or a foreign limited liability company or international business company for a flat fee. But unless you are well acquainted with that lawyer and have reason to know that he or she is an expert on international taxation, you should seriously consider getting a second opinion from someone who is not going to benefit from the purchase of an off-the-shelf foreign trust, foreign corporation or other foreign structure.
If the promoter who is trying to help you set up a foreign structure is not a U.S. person, that promoter has no great reason to worry about whether you get into trouble with the IRS. If you do, you have little recourse against the offshore promoter.
Most U.S. taxpayers will turn to their tax preparer or public accountant for help or advice on tax matters. The problem is that this person may not have spent any serious time learning about the complex rules in the international area. A better source of help is the tax department of a large accounting firm that has international clients. Many of these large firms won't be interested in a few hours of consulting work, but if you keep looking you should be able to find one.
Onother source is a competing lawyer or U.S. based promoter. But if that
person tries to simply persuade you to do the deal but with their
product, you will not be getting objective advice.
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There are many hundreds (perhaps thousands) of lawyers and CPAs who
specialize in international tax law and you can find them on the
Internet. If you use a popular search engine like Google, and enter [
international+tax+CPA ] in the search box, you should get as many as
240,000 listings. (My listing was number six on the first page when I
tried that.)
If you enter [ international+tax+lawyer ] in the search box, you should get about 750,000 listings.
Follow the links and then look for professional information to judge the level of their expertise. Send them an email and ask -- "Do you provide second opinion services regarding international transactions?" If they say yes, you should then find out if they offer any similar or competing offshore services or products. You can often learn a lot from those who offer competing products or services, but don't expect them to give you a positive opinion on the deal you are evaluating.
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In the
area of domestic tax law, financial planners ae often an excellent
source of good ideas on how to save taxes. In terms of international tax
law, I expect that any financial planner in this area is selling
something and isn't really qualified to offer second opinion advice on a
variety of international tax subjects. There are probably some
exceptions, but I suggest that you look for a lawyer or CPA who claims
to work extensively in the international area.
Vernon Jacobs
(C) Copyright 2004, All rights reserved
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