| 1. Form 1040
Schedule B |
| |
| This form asks if you own a bank account offshore. IBC
owners should answer "yes" unless they also own a trust that owns the IBC. The bank account
of a trust is legally owned by your trust company, Argon Limited, who holds its assets in trust for
your beneficiaries. An IBC owned by a trust is legally owned by the trustee of the trust and its
assets are held in trust for the beneficiaries of the trust. |
 |
Line 11A of Part iii asks "...did you have an interest in or
signature or other authority over a financial account in a foreign country, such as bank account,
securities account, or other financial account?"
The answer should be "yes" for IBC bank accounts. In the case of a trust, while in some
cases the principal may not be a signatory to the bank account, she nevertheless has a financial
interest in the account. It is the opinion of Richard Duke, a tax attorney, that they should
therefore answer "yes"
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| 2. TDF 90-221
Report of Foreign Bank and Financial Accounts |
| |
The US government requires each citizen who
has a financial interest in or signature over an offshore bank account, securities account or
other financial account with more that ten thousand dollars ($10,000) during the calendar year.
A "financial interest" includes interest in foreign accounts in the name of nominee
directors, agents and trust, if the current beneficial interest of the US citizen in a trust
exceeds 50% of the assets or more than 50% of the current income distributed to a US citizen.
"Signatory authority" is interpreted to include the ability to control the disposition
of money or property in the foreign account by either oral or written instructions to the
signatory or the titleholder of the account.
The penalty for non-compliance is a fine not to exceed five hundred thousand dollars ($500,000) or
imprisonment of up to ten years or both.
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| 3. Form 4789
Currency Transaction Report |
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This report must be filed for deposits,
withdrawals or exchange of currencies or other payments or transfer of more than ten thousand
dollars ($10,000) per year.
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| 4. Form 4790
Report of International Transportation of Currency |
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This report must be filed if you transport
currency or financial instruments in the excess of ($10,000) ten thousand dollars.
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| 5. Form 926
Return by a US Transferor of Property to a foreign Corporation |
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The US requires this form to be filed if
you transfer assets directly or indirectly to a foreign corporation. The penalty is 10% of the
fair market value of the property at the time of transfer, if you do not file. If you have the
stock of an offshore company owned by a nominee director, the US law still holds you responsible.
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| Form 5471
Information Return of US Persons With Respect to Certain Foreign Corporations. |
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US Law requires this form to be filed by
all US persons who have direct or indirect control over a foreign corporation. Internal Revenue
Code, Sec. 6038 calls for US persons who control foreign businesses to provide the following
information:
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Identifying information such as name, place of incorporation, principal place of business and
nature of business
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In the case of a corporation, the undistributed earnings after 1986
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A
balance sheet
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Transactions between the company and US persons or entities controlled by the person or any US
person who owns 10% or more of the entity
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| A
description of the capitalization of the entity as well as names addresses and financial interests
of everyone who owns 5% or more of its stocks |
