Quote from TraderRuss:
First, I never said I personally wasn't going to claim anything. I will claim and gains or losses. All I said was, the IRS wouldn't know and it is true they would not. I have spoke to my friend who is an accountant for over 20 years about this very topic.
I hope you were kidding about "the IRS to put a lock on the account until Alliance gave up their customer list" and "the IRS to seize funds". If you weren't, I think you're watching too many movies. It would not be a "no-brainer", because the IRS would have no right to seize the foreign brokers funds based off whether individual clients of that firm did or did not pay their taxes on trades made through that firm.
The fact is a foreign brokerage has NO obligation to report anything about any of their clients to any country but their own, regardless of where their bank account is held. This is a fact, the foreign broker does not have to report anything to the US gov't. Just like when a foreigner, lets say for example a British person, opens an account in the US. The US brokerage doesn't send anything to England about the persons taxes. It is the individuals responsibility to report to their government and pay taxes.
With that being said, if the individual lies on their taxes and their gov't finds out, obviously they would be in a heap of trouble including fines and in extreme cases even jail time. That is all on the individual and has no bearing what-so-ever on the foreign brokerage who would not report anything about any of their clients activities to any gov't but their own.
