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updated 4/14/2005 6:14:36 PM ET 2005-04-14T22:14:36

Was 2004 good for you? Chances are it was. The economy was the strongest it had been in years — the growth rate was 4.4 percent, salaries edged up and the IPO market revived. If you were a chief executive, it was even better. In 2004 CEO bonuses rose 46.4 percent and the median CEO bonus stood at $1.14 million, according to a study by Mercer Human Resource Consulting.

Of course, this is the only time of year when you might find yourself wishing that maybe you had left a little more money on the table. That, maybe, a couple of losses wouldn't have been so bad to offset your gains after all. Because tomorrow is the Ides of April — the day when all that lovely money you made lies vulnerable and unprotected from the clutches of the Internal Revenue Service, no matter how hard you may try to shelter it.

And that is becoming harder to do these days, as your accountant has no doubt been explaining to you. It's no longer possible to avoid the tax man by unloading those assets in a hidden offshore fund or an unnumbered account in the Caymans. As the IRS has made efforts to become “nicer,” like Madame Lafarge, it has also been steadily knitting up all those loopholes while the poor taxpayers trundle off to the tax guillotine.

So what does this have to do with travel? Well, once upon a time, back when the IRS was nasty but less efficient, Americans could hide their assets in a variety of ways — but usually the most pleasant involved depositing it in some tropical country with nice beaches, sympathetic banking regulations and tough extradition laws. Even the gloomy vaults of Zurich, long a safe haven for the internationally tax averse, no longer offer the sanctuary they once did to American citizens.

Today, it is possible to only fantasize about tax havens. Similar to participants at a Civil War re-enactment, no matter how much you might like to have experienced the real thing, that time has passed. Gone are the glory days when the best resorts of the Netherlands Antilles, Cyprus and St. Kitts were packed with American millionaires doing their best to keep Uncle Sam's hands off their money. Now, even with the best, or in this case worst, intentions, you can be little more than a tax tourist.

The reason is that tax laws have changed. “If you're a U.S. citizen or a green card holder, you could be on the moon for ten years and you'd still have to file a U.S. tax return,” explains Brent Bergan, an attorney at Global Tax Network in Denver, which advises international corporations, individuals and small businesses on tax compliance. Bergan refers to a 1996 law, mandating that even people dedicated enough to renounce their U.S. citizenship and move abroad to become tax exiles will continue to owe U.S. taxes for ten subsequent years.

As a result, legitimate asset protection advisers won't counsel clients to become expatriates or hide funds illegally. But there is hope.

“Anyone who has wealth has a deep pocket. There are people out there waiting to pick that pocket. My job is to take the bull's-eye out of the target, while at the same time making sure that the client is compliant with all U.S. laws,” says Richard Cahan, an attorney at Florida-based, international and full-service law firm Becker & Poliakoff in Fort Lauderdale, whose clients include wealthy doctors and lawyers, directors of public companies, sports figures, Internet entrepreneurs and entertainers.

“My clients are not tax motivated — they are wealth-preservation motivated,” Cahan continues. “They come to me to ensure that their hard-earned wealth remains theirs and can be passed down to their families, as well as for legitimate and compliant offshore business planning.”

So just where are these compliant shores? Not coincidentally, many of them are the same tropical places which have gained notoriety as tax havens, and more recently, the home of flimsy corporate vehicles designed to evade taxes or conceal company debt.

Enron, for example, was recently revealed to have had 881 offshore subsidiaries, including 692 in the Cayman Islands alone, and many more in Turks and Caicos, Mauritius and Bermuda. Scandal-plagued companies like Parmalat and Halliburton used similar devices in the Cayman Islands, for one simple reason.

“Certain foreign countries have developed their own particular asset-protection laws, and they market themselves to people looking to set up offshore accounts,” says Thomas Wells, an attorney at Florida-based Berger Singerman, an estate and tax practitioner that provides wealth-preservation services to its clients.

According to Wells, four criteria make a location desirable for offshore financial activity: First, the country must be predominantly English-speaking; second, a respected banking infrastructure must already exist; third, the tax laws themselves must be favorable; and last, it must be relatively accessible from the United States.

Don't fool yourself into believing that the IRS isn't watching, warns Wells. Since the U.S. government has begun paying more attention, “What you find is most people setting up offshore trusts and offshore corporations for asset protection or divorce planning but no income tax evasion. They don't want to go to jail.”

In addition, most Caribbean countries have adopted information-sharing policies with the U.S., and even if you are the beneficiary of a foreign trust, you must disclose that on your income tax forms.

If you're determined to move, but the thought of handing in your passport is too painful, don't forget Florida, Nevada or New Hampshire — all states with little or no income tax. On the downside, these states have large populations of retirees and feeling like an 80-year-old before your time might just be too high a price to pay.

In the end, most tax-haven fantasies aren't feasible, just the result of too much feverish form-filing. So sit back, relax and pretend, for a little while at least, that maybe you fooled the IRS after all — but don't forget to get your forms in tomorrow.

© 2012 Forbes.com

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