Abusive tax avoidance transaction (ATAT)(ATAT)Is defined as: Tax shelter as defined under Internal Revenue Code (IRC) Section 6662(d)(2)(C), Reportable transaction as defined under IRC Section…
Abusive tax schemesTransactions promoted for the promise of tax benefits with no meaningful change in the taxpayer's control over or benefit from the taxpayer's income or…
Bearer SharesMany offshore financial secrecy jurisdictions permit the issuance of bearer shares by corporations chartered in their jurisdiction.
Beneficial OwnershipThis term refers to the true owner of an entity, asset, or transaction as opposed to any stated ownership provided in documents or oral representations.
Custodian ServicesThis is a service whereby a person or entity agrees to hold and manage assets on behalf of another person or entity.
Fictitious InvoicesIt is common practice in the offshore industry to issue false invoices as a means to transfer money to an offshore jurisdiction, while at the same time…
Financial SecrecyThis term refers to the confidentiality afforded to financial transactions either by enactment of law or by other means.
High net worth individualAny individual whose net worth is greater than $2 million immediately before the transaction.
International Business Corporation (IBC)The term international business corporation or IBC refers to a corporation formed in an offshore financial secrecy jurisdiction which is afforded certain…
Large entityAny entity with gross receipts greater than $10 million during the year the reportable transaction occurs or in the preceding taxable year.
Letter of WishesA letter of wishes is a document that purportedly has no legal status. In fact the document is used to transmit the wishes of the creator or the alleged…
Listed transactionA reportable transaction that is the same as, or substantially similar to, a transaction specifically identified by the IRS or FTB as a tax avoidance…
Material AdvisorAny person who: Provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or…
NomineeA nominee is an individual or entity, which acts on behalf of a beneficial owner.
Nominee DirectorEvery IBC must have a Board of Directors. The Board may consist of one person or many people.
Noneconomic substance transactionMeans the disallowance of any loss, deduction or credit, or addition to income attributable to a determination that the transaction or arrangement lacks…
OffshoreThis term, when used in this context, and when referring to a country, means a jurisdiction that offers financial secrecy laws in an effort to attract…
Offshore financial arrangement (OFA)(OFA)Any transaction designed to avoid or evade California income or franchise tax through the use of: (a) offshore payment cards, including credit, debit, or…
Offshore Mail Forwarding AddressOften an IBC's offshore address is nothing more than a mail drop (P.O. Box) assigned to the IBC.
Offshore PromoterAn offshore promoter is a person or entity who markets offshore arrangements to the public.
Offshore TrusteeA trustee has a fiduciary duty to manage and conserve the assets of a trust over which he or she has control.
OrganizerAny person who discovers, creates, investigates, or initiates the tax shelter investment, devises the business or financial plans for the investment or…
Personal Investment Corporation (PIC)A PIC is a term used in the banking industry to refer to an IBC. PICs are generally created for the private bank's client in order to hold the client's…
Potentially abusive tax shelterAny tax shelter required to be registered under prior federal law or is a reportable transaction under present federal law or state law.
Private BankingOffshore banking services are most commonly handled by the private banking departments of commercial banks or by private banks that cater solely to…
PromoterAny person who, directly or indirectly, organizes or assists in the organization of a tax shelter or who participates in the sale of any interests in a…
Red Cross SchemeThis is a scheme that uses a charitable entity to disguise a transfer of funds offshore. For example, $1,000,000 is donated to a charitable organization.
Reportable transactionAny transaction the IRS or FTB determines as having a potential for tax avoidance or evasion.
SellerFor purposes of the list maintenance requirement, a seller is: Any organizer, underwriter, broker, or dealer (or other similar person) who transfers any…
Tax BenefitIncludes deductions, exclusions from gross income, nonrecognition of gain, tax credits, adjustments (or the absence of adjustments) to the basis of…
Tax HavenA tax haven is a country, which provides a no-tax or low-tax environment. The U.S. is considered a tax haven by some countries.
Tax ShelterIs a partnership or other entity, any investment plan or arrangement, or any other plan or arrangement, if a significant purpose of the partnership…
transactionIncludes any series of related steps carried out as part of a prearranged plan.