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Sandi Hargrove, SkyHawks
Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience:  I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
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offshore

Customer Question

I would like to take advantage of the higher interest returns I can receive from offshore investments. Opening a bank account in the Dominican Republic would supply tax advantages. As an example,savings accounts, bank certificates of deposit and commercial paper investments are both locally tax-free. However I am concerned that the IRS will perceive this as
evasive and I will be red lined. I am not concerned about an audit but would
rather not have the hassle. What can I do to prevent this?
Submitted: 11 years ago.
Category: Tax
Expert:  R. Greg Paszkiewicz replied 11 years ago.
As a US citizen you are required to pay tax on all of your worldwide income, wherever it is earned. So moving it offshore does not avoid US taxes, but if the rates are higher and you pay no local taxes you would still be ahead of the game.
Expert:  Sandi Hargrove, SkyHawks replied 11 years ago.

 IRS already knows where your money is located and is informed of the income it receives for investing.  You should report the interest as usual to avoid audit. 


Your election to deduct foreign tax credit from a country of unrest may be the only problem you may incur. 

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