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Non-Tech : Shorting with Offshore Accounts -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (2)	2/8/1999 3:35:00 PM
From: peter michaelson	Read Replies (2) \| Respond to of 127

Rajiv: I believe that US taxpayers are obligated to report all income, whatever the source. I think the reason that people don't talk much about their offshore accounts is that the IRS hates them. The IRS has difficulty knowing you have offshore income unless you report it. I suppose that means that people with offshore accounts are more likely to be audited. peter

To: Rajiv who wrote (2)	2/9/1999 1:06:00 AM
From: Mark L.	Read Replies (1) \| Respond to of 127

"Are people with offshore accounts paying taxes ?" Not necessarily, but it is very difficult to repatriate the funds. In the structures I'm familiar with, different tax attorneys have reached different conclusions about whether the gains are taxable, or, more precisely, about which event triggers the tax liability. And, in no event, will you be controlling the funds personally. The bottom line is that, at least for the structures I'm familiar with, there is little likelihood of ever being able to spend the money in the U.S. on anything that resembles food, clothing, shelter, luxuries, or services. None of the structures I'm familiar with are simple or cheap. It looked like about $20K/yr in accounting and legal alone, and that's assuming there's no audit. There are two reasons why people are secretive about these deals. First, their primary use is asset protection. To the degree that the assets or techniques are widely known, their protection is diminished. Second, the people I know utilizing the techniques are, in their opinion (and mine), obeying the law but avoiding various SEC and IRS regulations. The investors are acutely aware that these benefits might disappear if there were too much scrutiny. So there's a "don't kill the goose that's laying the golden egg" mentality. There's, of course, a whole different, lively industry in ILLEGALLY ducking taxes offshore. Those operations are despised by the people I know, just as any businessman despises threats to his livelihood.

To: Rajiv who wrote (2)	2/9/1999 4:14:00 PM
From: Philip S. LaMar Jr., J.D.	Read Replies (1) \| Respond to of 127

Unfortunately, many people who simply open up bank accounts offshore do not report them. They do so with the cooperation of providers who insist that these people will not get caught. Whether they get caught or not, does not change the fact that this failure to report is illegal. Responsible offshore activity is accomplished through structures established under the law of a foreign jurisdiction. To the extent that a citizen maintains ownership or signatory authority over the accounts of such entities, reporting is still required. However, when there is no legal connection between an individual and a structure there is nothing to report. This requires that there not be control,indices of ownership or any relationship between the individual and the structure other than one which is truly "arm's length." When a naked repatriation of dollars from an offshore entity takes place, and is not structured, these funds are considered income and thus taxable. Please see http//www.barringtongroup.com