Offshore Visa Account

The IRS issued a press release on tax day to further send a chill through anyone daring to engage in offshore banking activity.  The contents of the press release detailed the ongoing efforts by the IRS to force large offshore credit card processing companies to release information on processed transactions over the last several years.

The NY Times, among other outlets jumped on this bit of “news” and ran with it.

Critics are calling the story, and especially the timing of the story’s release a blatant and transparent attempt by the Internal Revenue Service to frighten tax payers into voluntary compliance with the IRS’s regulations surrounding the owning and operating of an offshore account and offshore credit cards.

The  IRS itself has issued a ruling that there is nothing inherently illegal about either an offshore account or an offshore visa card. However, they want you to claim and report any overseas account with over 10,000usd.

The fact that most offshore bank accounts are accessed by their holder via  offshore debit cards, or prepaid offshore credit cards makes them a convenient target of the investigation.  Only a handful of companies process most of the transactionsf or the Visa and MasterCard networks and service most of the offshore banks in question.