Hello, I am new to this board, and was wondering if anyone has any information on a panamanian law firm called Offshore legal? I read in a seperate post some of Jay Adkisson's remarks on treaties between the U.S. and offshore institutions. This is what he wrote....

"How will the IRS know? Because now there are a lot of treaties out there by which the offshore jurisdictions have agreed to cooperate with the U.S. in tax evasion prosecutions. Then, the IRS has issued subpoenas to MasterCharge, Visa, American Express, and lately PayPal for information which link transactions to offshore accounts."

Now forgive me, this post was from 2006, and things might have changed since then, but according to this post it seems as though ones' privacy is dependent upon the particular offshore institutions discretion and any treaties it might have in place with the U.S. Now this company offshore legal is stating that Panama has no tax or MLAT treaties with anyone and that Panama has stood its ground on bank secrecy issues in the face of pressure from foreign governments including large revenue agencies seeking to find information on tax evasion suspects.

- Is there any truth to the level of secrecy Panama claims? Are there any laws that state an offshore (Panamanian) institution without any treaties is obligated to provide information to creditors or government agencies?

http://www.oecd.org/document/19/0,3343,en_2649_33745_1903251_1_1_1_1,00.html
and
http://www.oecd.org/dataoecd/60/16/2082513.pdf

Never, ever, ever believe what some offshore service provider says -- it is fundamentally no different than a crack-addict hooker telling you that she doesn't have HIV to try to get you to hand over the bucks.

What Jay says is about 80% true. Not EVERY offshore provider is completely without ethics, but a lot of them are. By the way, the same holds for many domestic asset protection planners, unfortunately.

By the way, I noticed neither Lichtenstein nor Cuba were on the OECD list! :p

On a tangent note, there are people that are able to hide income offshore without the IRS knowing about it. But, this isn't because the IRS couldn't find out. Rather, it's because they don't have enough manpower to pursue every tax evader. I certainly don't recommend hiding income offshore. You are taking a big risk if you do.

Regards,

W. Ryan Fowler
www.pfshield.com

Liechtenstein has agreed to come clean; details being worked out.

I remember back in 1997-98 when Marc Harris and some others were trying to develop Cuba into an offshore haven ("Just watch the IRS try to get cooperation there!"), but for a variety of reasons -- mainly no banks that one could trust and the fear of nationalization of assets -- it just never took off.

I'm not saying that all offshore providers are bad; in fact, I know some very good ones. All the same, whatever anybody offshore tells you (and particularly those who are marketing to you) should be taken with an enormous grain of salt.

Against the backdrop of the IRS pursuing UBS criminally and civilly, the OECD initiative against "tax havens", and multiple offshore jurisdictions becoming more transparent, it's astounding that some offshore promoters can actually claim that they are somehow immune from this trend and that Panama is some sort of standalone fortress of secrecy.

Further, we've been told by government officials of various Caribbean and Central American jurisdictions that the Obama administration has already indicated to them that Tax Information Exchange Agreements are on the way and are non-negotiable.

With respect to Ryan's comment, ". . .there are people that are able to hide income offshore without the IRS knowing about it. But, this isn't because the IRS couldn't find out. Rather, it's because they don't have enough manpower to pursue every tax evader." That is changing, too. Obama's announcement on Monday, May 4 about the new offshore tax regime mentioned that 800 new IRS investigators are being hired and trained specifically for offshore tax enforcement.

Within this context, we advise clients that offshore tax secrecy is a thing of the past. Going offshore does still have its benefits, asset protection vis-a-vis future creditors being the most notable, but clients should have no expectation of any tax secrecy and must in fact, file all forms and pay all taxes on foreign funds. Asset Protection, yes; hiding money from the IRS, no longer.

Finally, just a quick note that I have been "lurking" here for a while, and I've read some very insightful posts from folks who are clearly authorities. I'm looking forward to a great exchange of ideas and insights.

Asher,

You are right. Secret bank accounts are a thing of the past. They never were legal; but now, they are a pass for a free stay at club fed with bubba as a room mate.

Stealth is a good thing. ...but.... Asset protection should never depend on this; in fact, anybody doing asset protection should plan on his creditors discovering everything he did. If so, you still need to be able to hold your head high in front of a judge. In short, asset protection always needs to be legal, legit and effective, regardless of who knows what.

Regarding the Obama tax proposals (which come now and then) please note that they will not materially impact a U.S. Citizen with an offshore account provided the Citizen properly reports the account and pays his taxes.

The main impact will be on people and companies owning offshore corporations which under the Controlled Foreign Corporation and related tax codes can often isolate income earned offshore in a low tax jurisdiction. If the laws are changed to tax this income in the USA currently without a credit then we will have a lot of marginal companies paying more tax (US and offshore) than they have income. I really wonder if he can sell this. In all events I do not see how this will impact US human beings (or US people using Grantor trusts) who happen to have fully compliant offshore accounts. Obama is right in that these laws do "drive jobs" abroad. Maybe the solution is for us in the USA to be more competitive.

I will be doing a seminar on this issue in two or three weeks and I welcome any comments or suggestions....public or private (rob@rwl.net) or referrals to experts to interview. I will invite you all once it is scheduled.

Rob Lambert
non-moderator

Merely commenting that I have been reading the recent claims about Panama with great amusement.

Anybody who has followed Panama knows that the single most likely thing that can happen to your money down there will be that it will disappear -- for real. Marc Harris and his progeny (many of which are doubtless behind the recent marketing efforts) were masters at persuading Americanos to move their money away from the U.S. taxman to friendly Panama, where they promptly embezzled it and then threatened any complaining Americanos with turning over their names to the IRS.

Panama is one of the LAST places that I would even think about using in terms of an offshore jurisdiction; right down there with Grenada.

Jay,

Ditto to your comments. Not a place I would ever send a client based on the history.

Rob Lambert
non-moderator

I've also been getting a lot of promotional buzz about Panama's "offshore" advantages, for some reason -- even from some organizations that I have always thought of as reputable, or at least not crooked. The stuff that I've been getting pushes hard on the secret and bulletproof asset protection offered by Panama (including that ever-popular but incomprehensible "Panamanian foundation" business entity), as well as the great advantages to Americans who have lost their fortunes to relocate to Panama and live cheaply. So far, I have received nothing yet on Americans who have no choice but to live cheaply in Panama because they lost their shirts to Panamanian offshore hustlers, but it's probably on its way.

I know the IRS is hiring more people and stepping up enforcement efforts... but there are over 100 million taxpayers they are watching. I would never recommend hiding income offshore. I'm just trying to balance the comments out so people get a more realistic idea of how things really are.

Regards,

Ryan Fowler
www.pfshield.com