April 2007
In my 10 years with The Sovereign Society, I have become an old pro at fielding all types of questions regardless of the time or place.

A few months ago, in Mexico at our Offshore Advantage Academy seminar, it was well after midnight. I was just finishing a glass of champagne - my nightcap of choice - with a handful of my closest colleagues.

As I stopped at the bar to settle the tab, a conference attendee noticed me and approached me with a question. She was struggling to understand how she could benefit from an offshore bank account. Would it give her asset protection against lawsuits, or would it offer investment diversification? And, would she have complete flexibility about naming the beneficiary of this offshore account...or would she have to name her soon-to-be ex-husband? These were all very good questions so I postponed retiring for the evening and spent the next half hour giving her the information she desperately needed.

The truth is, educating people about the hundreds of opportunities that exist offshore is what I enjoy most. I want to help Sovereign Society members achieve complete financial freedom using the best international solutions available. Of course, to be successful, you have to separate fact from fiction when it comes to navigating the offshore world.

Today, I'm going to reveal the top four offshore banking myths and give you the honest truth. No sugarcoating here...just the facts. Let's get started:

Offshore Myth 1: Once you place your money in an offshore bank account, that money officially disconnects from the U.S. tax system, so you never have to pay taxes in the U.S. again. 

My Answer: This is ALWAYS WRONG. And if you believe it, and decide to shirk your tax responsibilities, you can get into serious legal trouble. The truth is that U.S. citizens and permanent residents must report all foreign accounts over which they have signatory or "other" authority (i.e. financial interest) on your annual income tax Form 1040.
You also must file Form TD F 90-22.1 (the "foreign bank account reporting" or "FBAR" form) with the U.S. Treasury Department by June 30th of each year for any reportable foreign accounts you had during the previous year that exceed US$10,000.

And, you must report any interest payments or dividends you have received from any offshore investments made using that account.

Offshore Myth 2: You can still open an anonymous numbered account with select banks in Switzerland, and no one will ever know it's your account - not even the banker.

My Answer: Anonymous "numbered" bank accounts are relics of the past. All banks around the world now have "know your customer" rules. That means that if you have an offshore bank account, your name will appear in the offshore bank's records. When you apply for an offshore bank account, you have to fill out an application, show references and show a source of your funds. 

Trust me when I say that this is a good thing! Your bank account will still remain as confidential as possible. (No one else has to know but you, your banker and the IRS when it comes time to report your earnings.) But upstanding banks want to make sure they know who you are, and ensure that the cash and assets housed in those accounts are 100% legitimate. If you find a bank that is willing to take your financial nest egg without requiring these checks and balances, think again!

Offshore Myth 3: If I wire money to an offshore bank from my U.S. based account, the transaction will immediately raise a red flag and my U.S. account could be frozen.

My Answer: International wire transfers are perfectly legitimate. Each day hundreds of millions of dollars move around the global via electronic wire transfers. There is no evidence that wiring money to an offshore account triggers any type of flag. However, it is important that you report your offshore account come tax time.

Offshore Myth 4: Opening an offshore bank account is illegal. 

My Answer: If you live in the U.S., Canada or the U.K., this is absolutely false. Opening up an offshore bank account is legal in all of these countries. Sure you have to report your earnings in most places and pay taxes, but you can still open up an offshore bank account for greater investment possibilities, protection from domestic lawyers who might want to sue you for your life savings and for greater financial privacy. 
It's always better to be safe than sorry - don't be fooled by misconceptions. If you are in doubt about what is true and what is a myth, please contact us. We would love to hear from you.

In Wealth & Prosperity,ERIKA NOLAN, Executive Director The Sovereign Society

Last year, the number of American millionaires fell by 100,000. Yet 200,000 new millionaires showed up overseas. Why? Because hugely profitable investments are being hidden from you by a cartel of lawyers, regulators and Wall Street special interests. Like our recommended investments that gained 787% and 1,894% during the bear market and our other investments up 106%, 131% and 169%. Find out what they don't want you to know...