U.S. and International Investors who invest in the US or immigrate to the US face the same issues:
1. Worldwide US income, estate and gift tax reporting and taxes due.
2. Disclosure of foreign bank accounts (over $10k by annual FBAR filings) and disclosure of foreign financial assets over $50k (FATCA Form 8938, attached Form 1040).
Failure to report income, disclose accounts, pay taxes subjects the investor to multiple tax felonies including: IRC 7201(willful evasion of tax; 5 years in jail), IRC 7212 (obstruction of tax collection; 3 years in jail), 18 USC 371 (conspiracy to commit tax evasion; 5 years in jail); IRC 7206 (filing a false tax return; 3 years in jail).
Use of tax evasion proceeds to purchase assets implicates the investor in a sister trio of 20 year felonies:
1. Money Laundering - purchase of assets with either illicit proceeds from criminal activity or tax evasion proceeds;
2. Wire Fraud - use of interstate wires in “furtherance of a scheme to defraud which includes interstate telephone calls, and wire transfers;
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Our author, Gary S. Wolfe, has more than 34 years of experience, specializing in IRS Tax Audits and International Tax Planning/Tax Compliance, and International Asset Protection.