“International tax and estate planning may lead to tax evasion (and additional crimes: money laundering, mail fraud, wire fraud) if the U.S. taxpayer either fails to pay tax due to federal, state or foreign governments. The U.S. taxpayer may be culpable for violation of U.S. wire fraud laws, money laundering laws or mail fraud laws, which may lead to asset forfeiture.
Income tax deficiencies (i.e. failure to pay tax due) which create “tax cheating” proceeds, when used to purchase assets or make investments may subject the taxpayer to separate felonies:
1. Tax Evasion (failure to pay the tax due);
2. Money Laundering -The use of proceeds from a specified unlawful activity, i.e. tax evasion, to purchase or make investments in assets which transmute the original “illegal tax-cheating” proceeds into another asset;
3. Mail Fraud: The use of the postal system to effectuate a scheme to defraud (18 U.S.C. Sec. 1341);
4. Wire Fraud: the use of the telecommunications facilities to effectuate a scheme to defraud (18 U.S.C. Sec. 1341).”
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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.