As we go through life, we all have a tendency to pick up and accumulate certain lessons that we then file away in our brains for future use and guidance.  When we are toddlers, we all learn basic life lessons in safety, such as “fire is hot” or “sharp knivescan hurt us.”  As we become teenagers or young men, we might learn that asking a woman her age or telling her that she looks like hell after her bout with the flu are not good mating strategies.  We continue to pick up these “life lessons” as we age, and the wiser among us apply these lessons broadly in our lives and impart this knowledge to our children.
 
 One “life lesson” I have surely learned, and would certainly swear by, is that “if it sounds to good to be true, it probably is”; and the corollary to that, which is that the more outrageously great something sounds, the more likely it is to actually hold negative consequences for you.
 
 I thought of these tried and true (for me at least) life lessons when I recently came upon one of the more outrageous examples of fraud and outright falsehood that I have seen in the asset protection world. A Utah gentleman named Kent Bickmore and his “Asset Protection Plus” group have recently been targeted by the US Justice Department’s Tax Division and the IRS to cease and desist from promoting the use of Nevada and Wyoming corporations to improperly evade US taxes.  You can read the Government’s seven page complaint against Bickmore here
 
While I encourage you to take five minutes and read the Government’s complaint in its entirety, the basics behind Bickmore and APP’s strategy are as follows:
 
•    APP would create Nevada or Wyoming corporations with one of Bickmore’s employees as the corporate officer;
 
•    Bickmore asserted that under Nevada and Wyoming state law, such corporations were not required to reveal the true owners/beneficiaries of such entities, thereby allowing Bickmore’s customers (so he told them) to keep their interests totally hidden;
 
•    These Nevada and Wyoming companies would then create friendly liens on Bickmore’s customers’ property, thereby appearing to create encumbrances on these properties and discouraging creditors – including the IRS – from executing judgments on these properties;
 
•    Bickmore also promoted the use of the Nevada and Wyoming corporations as a way to establish offshore bank accounts in Belize, to avoid reporting income to the IRSA or other creditors.
 
Whilst we at GSA are no fan of the Government’s somewhat overheated rhetoric regarding offshore asset protection and investing, all we can say when reading about a case such as this is that we hope the Government shuts Bickmore down, and the sooner the better.  While there are plenty of legitimate reasons for establishing an asset protection plan and investing offshore, illegally avoiding taxes is not one of them, and Bickmore’s actions only serve to tarnish legitimate advisors.
 
While Bickmore’s strategy must have seemed wonderful to many potential customers, it is a classic case of something sounding too good to be actually true.  We have stated repeatedly that asset protection plans are TAX NEUTRAL – that is, there is nothing intrinsic to any asset protection plan that will save you money on taxes, and if anyone suggests otherwise to you run (RUN, not walk) in the other direction as fast as you can.  US citizens are taxed on their worldwide income, and while certain annuity and life insurance structures may offer certain tax advantages, there is nothing intrinsic to asset protection that creates these tax advantages.  No one likes taxes, but we all have a legal responsibility to pay them, and any asset protection promoter who suggests otherwise is quite simply either misinformed or lying.
 
 Likewise, any offshore asset protection plan will likely involve certain very specific reporting requirements.  For example, any foreign bank account or financial structures held by US persons (including annuities and life insurance) that exceed $10,000 at any time during the calendar year must be reported to the Treasury Department on a simple one page form (TD F 90-22.1) called the FBAR, short for Foreign Bank and Financial Accounts.  Likewise, there is no such thing as complete “anonymity” since structures such as offshore trusts and LLCs have specific reporting requirements associated with them.
 
 Reading this case, my first thought was how could anyone fall for something that blatantly illegal no matter how attractive Bickmore’s promises?  I guess the reality is that there are indeed a lot of suckers in the world, but as long as you keep in mind certain basic concepts such as “if it sounds too good to be true it probably is,” then you need not be one of these poor souls!  We at GSA only focus on structuring legitimate, tax-compliant business structures, and we always emphasize the basic legal reporting  requirements in all our communications.