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“I’m of age, Dad, and I don’t have to explain things to you anymore.”
“You do if you want my investment skills to remain at your disposal.”
“What is it that so annoys you about my withdrawing half a million dollars?”
“It occurs to me that a sum that size might just be for a big drug buy.” Marshall watched as beads of sweat appeared on his son’s forehead.
“Nothing like that,” Dink said.
Marshall swung back to his computer and brought up a new screen. “And I see that as soon as the funds were received in your checking account, they were wired to an offshore account in the Cayman Islands. Mind explaining that?”
“I just happen to be doing business with someone who has an offshore account.”
“Well, you’d better be ready to explain that to the Internal Revenue Service, because you’ve flagged more than your account with me, you’ve flagged an automatic disclosure from your bank to the IRS about the transfer. That pretty much guarantees you an audit.”
“An audit?” Dink asked weakly.
“Welcome to adulthood, son. It’s a place where you are held responsible for your actions.”
“Even private financial transactions?”
“ Especially private financial transactions. Tell me, do you have an offshore bank account?”
“Well, ah…”
“I was afraid of that,” Marshall said, rubbing his forehead. “You should have discussed all this with me before proceeding.”
“You’d have just told me not to do it,” Dink said.
“And in so doing, sav
ed you tens of thousands of dollars in accounting bills. Who is your accountant?”
“I, ah, don’t have one yet,” Dink admitted.
“Would you like me to recommend one?”
“No, Dad.”
“Then you should ask your private banker to recommend a good firm and schedule a meeting with them immediately. If they take swift action, they might be able to head off this thing at the pass, before you have IRS agents knocking on your door.”
“It doesn’t seem like all that big a problem. Anyway, how could an accountant help?”
“An accountant, having dealt with the IRS for his whole career, will know to call someone there quickly and explain that he has a young and inexperienced person for a client, and that he has done something foolish, but wants to clean up his mess.”
“Oh. And that can happen?”
“Possibly. What won’t happen is to get your name off a watch list for every sort of transaction you can dream of. You will now be known personally and permanently to agents of the Internal Revenue Service whose only task in life is to catch American citizens avoiding taxes by money laundering and hiding funds in offshore accounts. Even Swiss banks are now cooperating, in an attempt to save themselves millions of dollars in fines and accounting fees, and they are happy to throw a client overboard if that’s what they have to do to please the IRS.”
“I had no idea,” Dink said, wiping his brow with a handkerchief and loosening his tie.
“By the simple act of turning twenty-one and gaining access to your trust, you have entered a whole new world, son, one with a complex set of rules and regulations that govern the way you will earn, spend, and pay taxes. You had better accustom yourself to playing by those rules, and an accountant, along with your private banker, can help you understand how to do that.”
“I see.”
“Moreover, any profit on the sale of the securities that was necessary to raise your half-million-dollar withdrawal will be subject to ordinary income tax at the full rate, whereas if you had sold something you’d owned for more than a year, you’d have paid the much lower capital gains tax, so you cost yourself some more money there.”
Dink was sweating profusely now.
