Treasury Dept. to investors: No need to report offshore hedge fund stash
April 13, 2011
Wealthy investors, including tax dodgers, have been given a temporary reprieve from reporting their foreign holdings, but new rules may be coming.
The government wants to know where potential tax dodgers have hidden their cash, but not enough to make them disclose their offshore hedge fund investments, according to a recent ruling that received little attention outside of law firms.
“Now more than ever, the government needs revenue and it wants to know as much as possible about the offshore accounts of U.S. citizens,” says Tom Bogle, a partner at law firm Dechert based in Washington, DC. “Investors don’t have to report interests in offshore hedge funds now, but they are likely to in the near future.”
The Financial Crimes Enforcement Network, the U.S. department of the Treasury’s tax evasion team, issued a rule on February 24 clarifying that investments in foreign-based funds—including the offshore feeder vehicles of U.S.-based managers used by tax-exempt entities...
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