Expats and Immigrants beware!

For our American friends out there, another Dream Team of sorts for you. Even if you're not one of the 4500 names UBS will pass on, beware that the IRS has setup a dream team of "elite" tax auditors just to look into offshore accounts (http://www.bloomberg.com/apps/news?pid=20601103&sid=aIwcvA9gW3dE):

“The establishment of this group is a step in our ongoing effort to align our resources around our long-term enforcement strategy,” IRS spokesman Frank Keith said. “The new group will focus on examinations involving webs of entities and arrangements controlled by the high wealth taxpayer segment.”

Murphy said the IRS’s business auditing division is better equipped to handle the complexities of offshore bank accounts that often are linked to a labyrinth of dummy corporations, partnerships and other foreign entities designed to hide account holders’ identities from the authorities.

At least some one is in the US is hiring to alleviate the unemployment situation. By the way, the IRS's voluntary disclosure program for reporting previously unreported offshore accounts ends September 23, 2009.

Despite it's horrid weather and low standing in terms of world economics and politics, Canada has been a mecca for emigrants out of Asia, particularly Hong Kong, PRC and Korea. For those of you out there with a "non-resident" trust with Canadian resident connections..........beware of Garron.

This latest tax case involving a non-resident trust is an unsettling proposition. Set up in Barbadoes by an accounting firm who had one of their companies act as trustee and "were only marginally implicated in the affairs of the trust." Therefore, the judge ruled: the central management and control of the Garron trusts rests with the Canadian resident beneficiaries and as such that the trusts were resident of Canada. Great discussion here: http://moodystax.com/component/myblog/A-Landmark-New-Decision-on-How-the-Residency-of-a-Trust-is-Determined.html

This means Canadian taxes when there whould have been little or none as a non-resident (and tax treaty partner).

This means lawyers and tax accountants can dream up grand schemes and deftly dance around the rules but.........in the real world (or the surreal world where tax authorities reside in), rules can and do change.

This means substance, can and will trump form so that "window dressing" trustees won't work.

This means it's time to call your Canadian tax advisor and get a REAL trustee if you don't already have one.

Did I mention that Canada was also talking to UBS about getting names?