I’ve been saying for some time that offshore trusts and bank accounts set up with no purpose at all (except to avoid US income taxes) are definitely in the cross-hairs of the IRS. Another user of this scheme will be paying with five years at ClubFed.
George Schussel founded Digital Consulting Inc. in 1982. The company was successful—successful enough that Mr. Schussel allegedly looked for a means to avoid income taxes.
The government alleged that Mr. Schussel used an offshore account at the Bank of Bermuda to hide $8.5 million. The account was in the name of an alleged sham company. Given corporate tax rates, that’s a loss of about $2.75 million in taxes.
Unfortunately for Mr. Schussel, the IRS audited his 1995 tax returns in 1997-1998. The government alleged that Mr. Schussel obstructed the audit and evaded taxes. The jury agreed, and he was sentenced to five years at ClubFed, a $125,000 fine, and must meet with the IRS to resolve his outstanding tax liabilities.
Sometimes it’s much, much easier to just pay your taxes in the first place.