Are you considering forming a cheap offshore company? Has some scammer in Nevis promised you tax freedom and privacy? Forming a cheap offshore company that does not include U.S. tax compliance is a roadmap to disaster for the American living, working or investing abroad.
How much would you be looking at in penalties for using a cheap offshore company formation mill? The most common error is failing to Ale the Foreign Bank Account Report or FBAR. Most get a penalty of $100K per year and are happy to avoid jail time.
Others get in to even more trouble for failing to file an offshore corporation return on Form 547 or one of the various LLC reporting forms. Those of you with complex asset protection trusts have even more risks. You may need to file a form when you fund the structure and Forms 3520 and 3520-A each year to report transactions in your trust. Add to this the requirement to report foreign assets in a variety of situations, and in improperly structured and reported cheap offshore company can cost you a fortune.
When asked how much a cheap offshore company will cost, I like to say about $100K. This is because the FBAR is the IRS’s first line of attack and other forms base their penalties on the amount of unreported tax or as a percentage of assets (i.e. an offshore trust). For the trust, the usual penalty is 25% of assets under management per year!
Back when I was defending cheap offshore company users, I commonly saw people who were out of compliance for multiple years and who owed more in taxes and penalties that they had taken offshore. In one case, a client put $75,000 offshore for a few years and ended up paying $225,000 in taxes, fines and penalties. . .and happy to pay up rather than sit in jail.
Some were not as lucky. U.S. jails are full of people who had a cheap offshore company and found themselves in theirs crosshairs – to eventually spend time
behind bars. How much does a cheap offshore company cost? If the IRS wants to make an example of you, about 3 to 5 years of your life.
The U.S. is one of the very few nations on earth that locks away its citizens for not paying taxes. In fact, America has put people away for failing to file a form when no tax was due (lawyers calls this a zero tax loss case). I personally know people in jail for 10 months for failing to file a form in a zero tax loss case. I know of another person who got 2 years home confinement on a zero tax loss case.
This is all to say, stay away from cheap offshore company formation mills unless you are an international tax expert, you are heading for trouble using such a provider because you can’t tell puffery and salesmanship from fact.
When you form an offshore company with Premier, we include 12 months of tax and business consulting services at no cost. Our U.S. tax experts are here to answer any questions from you or your tax preparer, explain what forms to use and when to file and make sure you in compliance with the IRS. We also assist with any business or banking questions – including opening additional bank or brokerage accounts in the first 12 months. We are always her to answer your questions.
While advice and consulting services are free, we also offer tax compliance packages for corporations, LLCs, trusts and asset protection structures that we have created. We do not prepare complex returns for structures we have not formed . . .this is just too much liability for us to assume from others’ mistakes.
- We also prepare personal returns, Form 1040 and 2555, for anyone living and working abroad.
So, how much does a cheap offshore company formation cost? Too much! If you don’t select Premier to structure your international affairs, please use a U.S. attorney or firm that can keep you out of trouble. The cheap offshore company formation is not worth the risk.
For a free and confidential consultation, please call us anytime or send an email to firstname.lastname@example.org. All discussions are private and there is no obligation.