For US taxpayers who are under an IRS tax audit, asset protection is a real concern since they are subject to immediate asset seizures under IRS jeopardy assessments (if the IRS determines that collection is at risk). If they lose the audit and do not appeal may have tax liens filed against them which subjects their assets to IRS seizure under an IRS levy.
The asset protection issues are particularly important in light of the Foreign Account Tax Compliance Act under which over 150,000 foreign financial institutions from over 80 countries are now forwarding US taxpayer information to the IRS (after the Act was passed in March, 2010 it was implemented commencing in September 2015 with Australia, Canada and the UK submitting names of US taxpayers to the IRS.) The release of the Panama Papers included hundreds of US taxpayers disclosed for having secret offshore accounts hiding their beneficial ownership (thru nominee entities) established by Panamian law firm Mossack Fonseca. These taxpayers (which include 500 in New York) are now under IRS criminal investigation division scrutiny.
The first issue that needs to be addressed is- are you, the US taxpayer, at risk of an IRS audit for an offshore account either in Panama or elsewhere? If so, what estate planning/asset protection have you done to protect your assets from IRS seizure either pre-audit (under a jeopardy assessment) or post-audit (tax liens filed if audit is lost).
At the outset you should request a summary letter from your tax counsel of the following issues:
1) If you are under an IRS audit what tax years are at issue, and what is the projected tax, penalty and interest due if you lose the audit?
2) If you are not under audit but have offshore bank accounts (over $10k) or foreign financial assets (over $50k) have they all been disclosed as part of your tax returns filed previously (i.e. for foreign bank accounts Fincen Form 114 due or taxpayer is subject to civil penalties of 50% of the account balance and if willful tax evasion then a 10 year felony; additional penalties for failure to file Form 8938 and disclose foreign financial assets over $50k).
3) To date what asset protection planning is in place to protect your assets so you may enjoy their use unmolested and provide for their inheritance by your designated heirs.
4) In the event of your incapacity do you have a Power of Attorney for Property Management to enable a trusted 3rd party to take over and make decisions on the IRS audit for you while you are incapacitated?
Asset Protection is like life insurance by the time you need it, if you do have it then too late to get it. Best time to do your planning is before you have a problem (word to the wise).