Question from an US-based IM Member:
Q: “With all things being equal; does simply having a Swiss bank account create a greater chance of IRS audit.”
A (by Terry Coxon): When you file your tax return, you are given a free ticket to an IRS lottery. But each ticket is different. Each ticket carries an audit score that reflects IRS thinking on the factors that make a given return more likely or less likely to be inaccurate. The higher your score, the higher your return’s chance of being selected for an audit.
The formula by which the IRS assigns audit scores is a closely guarded secret. But tax attorneys and tax accountants have an abundance of experience that reveals much about the formula. Most (and I don’t know of any exceptions) will tell you that having a foreign bank account does nothing to raise your audit score or to increase the severity of the audit if you happen to have a winning ticket. And they will all urge you to follow the reporting requirements as the only way to stay out of trouble.
Terry Coxon is the president of Passport Financial, Inc., a publishing company specializing in international financial planning, and a senior editor for Casey Research. Terry is the author of Keep What You Earn, Using Warrants and the co-author (with Harry Browne) of Inflation-Proofing Your Investments. He edited Harry Browne’s Special Reports for its 23 years of publication and all of Harry Browne’s investment books since 1974.
PLEASE NOTE: The information contained within this article is based on the best research we could find as of the date of publication. However, the world changes fast and information can become out of date relatively quickly. So, two points... First, before undertaking any action described in this material, please conduct your own due diligence and verify all facts. Second, if you happen to spot an out of date fact or figure (or even suspect something is out of date or false), simply get in touch with us and we'll look into it. International Man is a network made up of some very smart people - tax specialists, accountants, lawyers, analysts and many other talented individuals. As a group, we can create and maintain a very accurate and highly actionable resource for internationalization.