Quote:
Originally posted by Amputate Your Head
I just watched something about this a few weeks ago. You may have a LEGAL offshore entity, but if that entity serves no real purpose other than to funnel money away from tax responsibility, they are starting to classify you as a tax evader. From what they said, this is because this type of hollow entity is becoming more popular recently.
And in all truth, it IS tax evasion if your entity does nothing more than shield you from taxes.
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Avoidence is legal.
If you have an offshore company making offshore revenue and you have no immediate plans of repatriation of assets then the IRS can't do squat. The IRS in international matters has almost no power to enforce local laws so they push the idea on the news that hey can to scare people.
You have no requirement to pay taxes to one jurisdiction from profits made in another. U.S. Oil companies funnel billions of dollars every year into offshore corporations because they have no plans of bringing the money back to the U.S. This is legal.
It is in the IRS interest to gather as much revenue as possible whether they have a right to it or not.