U.S. residents with secret bank accounts outside of the United States rely on some weak strategies to keep themselves out of trouble. “How will the IRS ever find out?” is what I hear again and again.
The truth will come out. Maybe not now. But eventually.
Here’s a bullet, headed straight at you. It may not arrive for a few years. But it will arrive.
Automatic information exchanges between governments is coming. In the Cayman Islands, it is mentioned as a possibility in a recent article in The Economist:
Anthony Travers, a former managing partner of Maples and Calder who
chairs the Cayman Islands Financial Services Association, argues that
this bill would damage the American economy, by tempting hedge funds to
move their managers from Connecticut to the Caymans, for example.
Better, he says, would be a “proactive” treaty, with the American
authorities automatically notified of their taxpayers’ offshore
Automatic data dumps from foreign governments don’t mean that the IRS will find you. But it give them one more way to find out about you.
Secrecy as a tax strategy works well until it fails. And then it doesn’t work at all.