The Cowboy Cocktail was a well-hidden non-secret until recently, when an expose’ from the International Consortium of Investigative Journalists (ICCJ) laid out the facts. The ICCJ was drawn to the 44th state by revelations unearthed in the Pandora Papers, a trove of approximately 11.9 million records that details the lengths to which the world’s wealthy go to hide wealth in shell companies, trusts, and other structures that may, or may not, have a whiff of tax fraud to them.
While it may seem odd to consider Wyoming a sought-after offshore tax option for dictators, oligarchs, and their closest friends, Wyoming was recently named one of the friendliest tax shelters in the world. Wyoming is not alone in the U.S. for its come-hither financial ways. Nevada, Alaska, South Dakota, and Delaware have all been named by the EU as “hubs of financial and corporate secrecy.”
Notes Josh Rudolph, formerly with the National Security Counsel in the Trump and Obama administrations, “For some time now, the U.S. has been the weak link in the international anti-money laundering regime. The European Parliament is absolutely right — we are the enablers.”
Here is how the Cowboy Cocktail works:
Over the years, Wyoming legislators have continued to refine state laws to ensure investors could remain anonymous and their assets hidden, although Wyoming reaps little tax profit from the deals. Legislative refinements to the process are referred to as “Wyoming home cooking.” As noted in the ICCJ pieces, the arrangement is a winner. “A Cowboy Cocktail is a double-barreled approach to asset protection that may be the best thing since sliced bread.”
The legal team at Robert J. Fedor, Esq., LLC delivers experienced legal representation to clients throughout the U.S. and abroad on matters of offshore tax, compliance, or IRS criminal or civil audits. When you have tax questions, call us at 800-579-0997 or contact us. We have offices in Cleveland and Chicago.