Many Americans dream of retiring abroad, perhaps to a tropical island or other exotic and stress-free location. The last thing anyone wants during their retirement years is an IRS tax reporting headache. That’s why consulting a New Jersey tax lawyer is a great way to understand the IRS requirements for banking abroad before you make an error that could cost you some of that retirement money.

In the first quarter of 2018, a total of 1,099 U.S. citizens gave up their citizenship. In both 2016 and 2017, more than 5,000 people decided they  no longer wanted to be citizens of the United States. A big part of the reason why so many Americans have decided to give up their citizenship is because they are burdened by complex tax laws that make it difficult for them to live their lives.  

The Internal Revenue Service has been trying a number of tactics in recent years to identify U.S. affiliated taxpayers who keep funds offshore in an effort to avoid their responsibilities to pay taxes on income earned.  Because of the aggressive crackdown by the IRS on offshore investments, any Americans with undeclared accounts offshore should consult with a New Jersey international tax attorney in order to obtain help protecting their assets and exploring options to reduce the risk of IRS prosecution.

If you are considering investing any of your funds in an offshore account, you should talk with a New Jersey international tax attorney before you make the decision to open the account. Investing offshore has become much more complicated in recent years thanks to global efforts to fight tax evasion.  While there are still ample reasons to make investments in foreign financial institutions, there is a lot to consider about what obligations you're taking on when you open an account at a foreign bank.

Across the globe, there are certain locations that have favorable banking, finance, and tax laws. Historically, many investors have put their money into financial institutions in these locations. There are a wide variety of motivations for investing in these different jurisdictions, but one of the reasons why people have put their money into these offshore locales is to hide their funds from taxing authorities.