How Not to Hide Assets Offshore

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If you ever thought that using an offshore corporation was a good way to hide assets offshore take a lesson from this IRS Chief Counsel Advice (CCA20114034).

The first test on disclosure of the ownership of a foreign corporation is the 50% test. This is not a test you want to fail. A U.S. taxpayer must report the ownership of a foreign corporation if the taxpayer owns more than 50% of the total value or total combined voting power of the corporation. This test is applied under the CCA to mean ownership in substance, not just form.

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