Hidden offshore income
Putting money into a foreign bank account is not illegal. Putting money into a foreign bank account for the sole purpose of hiding it from the IRS is illegal.
These so-called offshore accounts, as well as associated debit cards, credit cards and wire transfers, have cost the U.S. Treasury billions of dollars. So the IRS is continuing its crackdown on individuals it believes are evading U.S. taxes by hiding income outside the United States.
Most foreign account owners must report that money to the IRS. In fact, the tax agency recently instituted a new foreign account reporting document, Form 8938, that some taxpayers must file with their tax returns.
The IRS' Offshore Voluntary Disclosure Program encourages taxpayers to report their non-U.S. accounts. Since the national amnesties began in 2009, the IRS has collected $5.5 billion (and counting) from people who admitted that they had taxable money in foreign accounts.
For those who insist on keeping their foreign accounts secret, beware. The IRS and Department of Justice investigators are pursuing taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas.