Monday, April 27, 2009

IRS Continues Offshore WitchHunt

The IRS has demanded in court documents information from one of the large offshore credit card processing companies.

Evidently, a fishing expedition by the IRS meant to dredge up tax evasion, money laundering or worse, became newsworthy only on April 15th. The press release was eagerly gobbled up and ran on the US tax day by the Ny Times, among others.

OK, so, I'll admit that some editor could have called it "timely" but it was a transparent attempt by the tax collection authorities to scare the general populace into compliance. Further, it was an attempt to scare people out of offshore accounts, offshore banking in general, and of course offshore credit cards.

However, the IRS itself has issued a ruling that there is nothing inherently illegal about either an offshore account or an offshore credit card. However, they want you to claim and report any offshore account holding over 10k dollars in cash.

Of course, in reality most offshore accounts are linking into using offshore debit cards, or prepaid offshore credit cards, but given that most fall under the mastercard of visa network, offshore credit card is a convenient moniker.

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