IRS Eyes Dubai and Singapore for Offshore Investigations

From Law 360. The IRS announced at a DC Federal Bar event that Dubai (UAE) and Singapore might be locations for investigation posts.

“They are ripe for U.S. presence. They’re a hub for international activity, and we can make a big impact there saving U.S. taxpayer dollars,” said R. Damon Rowe, director of international operations at CI.

Operating its first fully staffed office of investigators in the United Arab Emirates – the world’s fifth-richest country based on per capita gross domestic product – would enable the IRS to capture significant amounts of money that would otherwise be diverted from the U.S. Treasury, Rowe told the panel.

The IRS Criminal Investigation Unit currently has 10 international posts in Canada, Mexico, Barbados, Panama, Colombia, Australia, Hong Kong, the U.K., Germany and at the European Union Agency.

Most U.S. expats are not tax evaders. They have accounts and investments in foreign countries where they reside and work. In most cases, they pay taxes overseas. Countries like UAE that have no federal income tax pose unique considerations. UAE has recently taken some heat as a major international tax haven. It’s a location that would make sense for offshore evaders, since the UAE has no federal income tax, and only in 2018 implemented a VAT tax at a rate of 5%. Where a U.S. person moves to the UAE and mostly conducts business outside of the UAE, there might be some explaining to do.

What should non-compliant taxpayers do?

Taxpayers should attempt to correct past non-compliance to avoid FBAR and other international information penalties. If taxpayers are non-compliant with the foreign asset and income reporting requirements, they should consider applying to one of IRS’ voluntary disclosure programs:

We assist taxpayers who have undisclosed foreign financial assets. Schedule an appointment to see how we can help.

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