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$21 trillion hidden offshore

By Kay Bell · Bankrate.com
Tuesday, July 24, 2012
Posted: 5 pm ET

Here in the United States, offshore accounts have received a lot of attention thanks to Republican presidential candidate Mitt Romney's decision to put some of his vast wealth into foreign institutions.

Romney is far from alone in stashing money in Swiss bank accounts and shelters in Bermuda and the Cayman Islands. And let me make an important point here. Romney has reported these holdings to Uncle Sam, so there's nothing illegal in his choice of non-U.S. financial institutions.

But such transactions still raise eyebrows, not only of political foes but of we Average Janes and Joes who are simply looking for a CD that pays more than a paltry 0.4 percent return.

That's why we take notice when we get word from the Tax Justice Network, or TJN, that worldwide, the super-rich had at least $21 trillion hidden in secret tax havens worldwide at the end of 2010.

The TJN was by created by the British Houses of Parliament to research, analyze and report on how taxation and various types of tax evasion affect economies. It touts its latest report, The Price of Offshore Revisited, as the "most detailed and rigorous study ever made of financial assets held in offshore financial centres and secrecy structures."

And the group says the $21 trillion figure, which is equal to the size of the United States and Japanese economies combined, is conservative. It represents financial wealth only and excludes a welter of real estate, yachts and other nonfinancial assets owned via offshore structures.

When those other noncash assets are added, TJN suspects there may be as much as $32 trillion in hidden worldwide financial assets held offshore by high net worth individuals.

IRS offers amnesties for offshore accounts

Locally, the Internal Revenue Service is continuing its efforts to get foreign account holders to reveal their offshore assets and pay U.S. taxes on the money.

Two previous amnesties (what the IRS prefers to call offshore voluntary disclosure programs, or OVDPs), along with results so far this year in a third such program, have brought in more than $5 billion in back taxes, interest and penalties. That money was collected from 33,000 taxpayers who confessed their holdings in order to avoid criminal charges of tax evasion.

The 2012 offshore disclosure effort is underway indefinitely. The penalty for finally reporting previously hidden offshore assets has ticked up a bit to 27.5 percent from the 25 percent in the 2011 program. But it's better than the alternative if the IRS discovers your offshore money after it ends the amnesty period.

In that case, you'll face full penalties and possibly the inside of a federal jail cell.

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22 Comments
Sandy
August 17, 2012 at 4:23 pm

By not paying taxes causing the rise of the U.S.debt, the money to support the military that protects their money is reduced! Oh well, not my problem!

David
August 14, 2012 at 8:49 pm

I just love the tax evaders. Elect GW to corrupt the tax code, then claim they're not "breaking any laws". Claim their actions are justified, because the 15% capital gains tax is too high. News flash you tax evading filth - we all know anything over 0% is too high for trash.

Ken Puck
August 13, 2012 at 10:53 pm

These morons don't understand the power of incentives and rely instead, as do most tyrants, on the threat of punishment. To get these resources repatriated and injected into the economy, LOWER THE CAPITAL-GAINS TAX RATE AND GET RID OF THE SNARE OF STUPID REGULATIONS, DUMMIES.

It's a cinch nobody commenting on this blog ever met a payroll. Losers.

Adrelectro
August 11, 2012 at 12:16 am

Romneyembra: You do not state at what grade level you dropped out, which could be the only reason you did not understand the first paragraph of the article "(Romney has reported these holdings to Uncle Sam, so there's nothing illegal in his choice of non-U.S. financial institutions.)" Next: watch a very good program on PBS about the 2 crashes this country has had. The latest caused by...READY...Bill Clinton, He repealed a regulation that..READY again..was in place since the first crash (over 60yrs ago) and prevented the financial industry from conducting business the way they did and caused the crash less than 10yrs after it was repealed. Senator Mcain attempted to get the bill passed into law again and the same congress that passed the obamacare defeated it.

Romneyembra
August 09, 2012 at 5:58 pm

Another Republican crook Romney. Why do you trust the leader who hid the his money oversee and he did not paid a dime in taxes. Do you think that he asks you and me to paid my taxes make sense? Did you have enough of a stupid Bush who ran the country to the ground and mountain of debt.

John Fenner
August 07, 2012 at 9:08 am

Romney's Secret Plan to improve the Economy--he will bring all of his off-shore money, back to the USA.

Note to Mr. Priebus: This is a joke, sort of.

Larry
August 06, 2012 at 7:31 pm

Hey Mitt, SHOW ME YOUR TAXES! What are you hiding?

Bagui
August 05, 2012 at 11:05 pm

Hillary Clinton was elected in New York years ago, among other things,because Bill did tax amnesty for the tax-evading Rich family: a husband in European exile, and a wife whose combined wealth would dwarf Romney's wealth. How did Bill also benefit? They built his presidential library. Bain executives also gave to Obama's election campaign in 2008, and now other capital firms are to benefit from a relationship with the campaigner-in-chief. Soros has also received windfalls for supporting the President, in getting the offshore drilling rights for his Brazilian petroleum company, a military aircraft contract for a Brazilian aircraft company that he owns, and a Spanish company that will count this year's presidential election. The President had appointed tax evaders for his Cabinet, who were conflicts of interest in our country's bailouts. If all were known about this administrations' conflicting interests, they would have to use distractions of Romney's wealth, and blame Bush for all else.

Pat
August 04, 2012 at 12:15 pm

Steve: Why cannot people think? The question is not who is hiding money where, but why do they have to hide it?

Pat: How about because they have more wealth if they pay no taxes Steve. They are no better than criminals.

And my joint income was aver $300K last year. The difference is I paid my full brunt of taxes (except for my 401k). Which is why Romney paid a far lower tax rate than I did, even on the money he is not hiding.

How about following your OWN advice, and start thinking, huh?
There is a reason why the TeaParty Republicans could find no real money to cut recently, and we are facing huge cuts to defense because of their shut down games last year.