Monte Carlo Banking

[Shabber]

When I was 18 I took a trip to Monte Carlo and decided to take a walk into one of their banks. I sat and spoke to the banker about opening an account and how it would work. If I am remembering correctly, they explained that I can put money in and buy US stocks and earn interest without paying any Monaco taxes. Also, since the account is linked to a number not a Soc Security # there was no reporting to the US and hence no US taxes. Is this an option to allow me to retire early with a smaller bankrole? Does anyone do this?

- Shabber

 

[mathjak107]

well you are required on your taxes to report foreign accounts.....not sure if you dont how it will come back to haunt you....... maybe when you receive checks from them your bank will report them.....

 

[2B]

Shabber,

I don't know how long ago you were 18 but what you are saying was very true 30 years ago. Since then, there is a checkoff on Sch B to "declare" your ownership of a foreign bank account. Probably the only thing worse than checking "yes" is checking "no" when you have one. Checking "yes" guarantees a rectal exam like audit. Tax fraud is forever.

There is now greater "transparency" with most foreign banks. They will generally cooperate with US investigations. If you are a small player, you will likely be able to get away with it indefinitely. If something ever looks funny to the IRS, you will be investigated more closely and probably get nailed.

Ex-spouses and former girl friends are the leading cause of the "better" tax cheats getting caught.

 

[LOL!]

I used to check "Yes" when I controlled a foreign bank account. I have never been audited.

 

[2B]

I used to check "Yes" when I controlled a foreign bank account.  I have never been audited.

My data is from many years ago and right after the check off was put in. If you had your money in a "respectable" country as far as banking was concerned and claimed interest,etc, you were probably ok. The person I knew had money in Grand Cayman and had multiple business interests, tax loss carry-forwards, etc. He was an audit waiting to happen.

 

[Shabber]

It was about 20 years ago when i was there. And yeah, I was thinking the exact same thing about the ex-wife/girlfriend scenario. So many must fall into that.

 

[Nords]

It was about 20 years ago when i was there. And yeah, I was thinking the exact same thing about the ex-wife/girlfriend scenario. So many must fall into that.

Tax reciprocity & the IRS's lifestyle audits have pretty much ended the "good deals" of overseas accounts.

Add in that most American mutual fund companies won't accept P.O. boxes as mailing addresses and it's difficult to "Hide Your Assets and Disappear". Heck, there are even problems with American military from FPO/APO addresses being turned down by American mutual-fund companies and brokerages, right Flowgirl?

 

[brewer12345]

One of our friends and neighbors is a UK citizen but has been here forever. You cannot imagine the difficulties he has had trying to deal with his overseas assets because all of the US financial institutions won't touch anything that might increase their level of scrutiny from the federales. Things are very different these days.

 

[mark500]

For US citizens:

All foreign accounts must be reported if the amount is over $10,000, or you risk fines and/or possibly criminal penalties. You must fill out Treasury Department Form 90-22.1

All taxable income must be reported to the IRS, or you risk fines and/or criminal penalties.


I suggest you seek professional advice from a tax lawyer or accountant.

 

[AltaRed]

For US citizens:

All foreign accounts must be reported if the amount is over $10,000, or you risk fines and/or possibly criminal penalties. You must fill out Treasury Department Form 90-22.1

Applies to Resident Aliens as well.... i.e. anyone filing a 1040 US tax return. I have filled in that form more times than you can count (well, actually I just zerox last year's copy, use a bit of whiteout to change what has to be changed, and re-zerox and sign). Not that big a deal, but important to ensure it is filed before June 1 for the previous tax year.