I’m not from the US and I’ve always seen in movies offshore accounts and they are always tied to bad people hiding money or sth. What exactly are offshore accounts and are they illegal? Why is it alwayd tied with criminals and stuff
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As I understand it, it’s mainly to prevent people’s acquisition of wealth from being taxed according to US law. Depending on how wealthy one is, they are in a particular tax bracket. When they hide money offshore, it prevents that money from being taxed they way it’s legally supposed to be.
An “offshore account” is simply a bank account in another country than the account’s owner. For example, you might live in the USA but have an account in Switzerland or Bermuda.
By itself, that’s not usually illegal, unless either country has a law that says you can’t do that (that’s rare).
However…when you file your taxes with wherever you live, you generally are supposed to tell them about *all* the money you have (technically, income), not just the money that’s in your home country. Some countries are good about communicating with other countries about who’s got accounts, which makes it easier for the tax authorities to figure out if you’re lying to them. But a few countries have very strict banking privacy laws…they basically won’t tell anything to anyone. Sticking money in an account in a country like that effectively makes it invisible so you can hide it from the authorities or anyone else who might want to know where you have money (e.g. divorce lawyers).
Criminals like this because they don’t want the authorities to find or take their money. Tax dodgers like it because they can stick money there and not have to pay tax on it.
Switzerland used to be the ultimate example of this but, after 9/11, a lot of countries where offshore accounts were popular loosened up their banking privacy laws as part of the war on terror (terrorists like to keep their money safe from everybody), so it’s not quite as effective as it used to be.
There is probably some amount of that stuff going on in real life, in some form, but it probably doesn’t look *anything* like how it’s shown in movies.
Remember that movies are fiction. Not just fiction, but fiction written with big showy spectacle and excitement as first priority, and realism as…not first priority.
Have you ever used a computer? Have you seen computers in movies?
Now just think: movies are like that about *everything*, not just computers.
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