Everything You Need to Know About Anonymous Bank Accounts 

An anonymous bank account is an account a person may open outside their country of residence where their personal information is not public or disclosed to authorities. Anonymous bank accounts provide many benefits for the holder, including protecting their assets against legal disputes, a financial crisis, or another event that may cause economic instability.

However, with newer laws and banking regulations, such as the Foreign Account Tax Compliance Act, it may be challenging to have a bank account that is 100 percent anonymous. Continue reading to learn more about anonymous bank accounts, the laws, and if it is possible to still open one of these accounts:

What Is an Anonymous Bank Account?

Often called a numbered account, an anonymous bank account is one where the account holder's personal information is kept hidden or a secret. For this type of account, the account holder's name is replaced with a random multi-digit number, and the information is stored on an index card and in the bank's vault, with only the banker and the boss having access to this information.

These types of accounts provide added layers of security and banking secrecy. However, they are not considered to be completely anonymous. There is still a record at the bank containing the account holder's name, but the information is held under lock and key, with only a few authorized bankers having direct access to the information.

Even with government regulations, Swiss numbered accounts are more private than standard bank accounts, especially when opening a numbered account in a country like Switzerland, where it is against the law for bankers to disclose information about numbered accounts unless proof of deliberate fraud has been established.

Is It Possible to Access Anonymous Banking Today?

Though it is not impossible to access anonymous banking options today, rules and regulations make it more challenging. Because banks have to follow CDD, KYC, and AML rules, requiring the account holder's identity to be stored in association with the account, it is more challenging to open anonymous accounts.

However, some steps can be taken to increase a person's anonymity when opening a bank account, especially a virtual one. Some of those steps may include the following:

• Use a VPN (virtual private network)
• Use prepaid debit cards
• Select a bank that allows anonymous accounts
• Avoid linking virtual bank accounts to your other accounts
• Use a pseudonym

Is It Legal to Open and Control an Anonymous Bank Account in the USA?

Opening an anonymous account almost everywhere is illegal, especially in the United States. Some people open bank accounts under another person's name who acts as the signatory, while the account owner remains anonymous, which is also considered illegal in most situations. If the bank or authorities discover an illegally established bank account, the funds in the account could be frozen or seized.

Is Hiding Money Offshore Illegal?

There are two main reasons why hiding money or assets overseas is illegal, especially when keeping secret bank accounts. The first is that it can lead to the account holder avoiding paying taxes. The second is that the funds could be used for illicit activities or money laundering.

When putting money in an offshore account, the account holder must declare the value, even if the cash is not subject to taxation. Failure to report the account and value could result in legal action, which can result in the freezing or seizing the funds in the account.

How Does the U.S. Find an Anonymous Overseas Bank Account?

The U.S. government has many resources, including departments dedicated to investigating and seeking information about an anonymous overseas bank account. Ultimately, the Internal Revenue Service may locate overseas bank accounts established to remain anonymous in five ways. The five ways the IRS can locate an anonymous overseas account include:

• FATCA reporting
• Whistleblowers
• J5
• Hague Convention Request
• Deferred prosecution

Can the Government Find All My Bank Accounts?

In all reality, the IRS most likely already knows about many, if not all, of your existing financial accounts. Plus, the IRS can easily access information about how much money you have in these accounts.

Though the IRS may already know about your existing financial accounts, it rarely digs deeper into these accounts or your assets unless you are being audited or the IRS is attempting to collect back taxes.

Can Offshore Accounts Be Traced?

When moving money to an offshore account, there is most likely an electronic path that can be traced to where the money came from. Offshore accounts can be traced because the bank stores electronic information, including bank account opening documents, signature cards, statements, transfers, deposits, and more.

Ultimately, there are very few untraceable bank accounts because, at one point in an account's history, an electronic transaction was made into or out of a related account. The more online transactions made between accounts, the more a chain is created, linking all associated accounts open in your name.

Are Offshore Bank Accounts Known to the IRS?

When a U.S. citizen sets up a bank or investment account overseas, the IRS and federal government often take notice. The U.S. government requires taxpayers living in the United States and abroad to report all offshore accounts to the IRS. There is a great chance they already know about the account, so failure to let them know puts your money and assets at risk.

Regardless of whether the IRS knows about your offshore accounts, it is not worth the risk to try to hide them because if they know about them and you fail to declare them, you could face penalties, legal action, and more.

Can the IRS Touch an Offshore Account?

Though some countries' banking laws prohibit other countries from accessing, freezing, or seizing an account holder's money, the IRS could access the account in several ways. First, the IRS can issue a levy notice to the foreign bank if they have a U.S. branch or office, which could freeze or seize the funds in the account.

Even if there is no U.S. branch or office for the foreign bank, it is still possible for the U.S. government to take action against the account and account owner. In this situation, it may take longer for the IRS to gain access to the offshore account, but it is not impossible.

What Are the Reasons Why People Open Numbered Bank Accounts?

Opening a numbered bank account gives the account holder many benefits standard bank accounts cannot offer. The following are some of the main reasons why people open numbered bank accounts:

• Fascination with offshore banks
• Desire to remain anonymous
• More privacy
• Protect data and personal information
• Anonymously protect assets offshore
• Hide money and avoid taxes

What Are the Benefits of Having an Anonymous Offshore Bank Account?

There are many benefits to having an anonymous offshore bank account. Some of those benefits may include one or more of the following:

• Reduce taxes
• Remove leverage of government authorities
• Increase asset protection
• Financial privacy
• Conducting international transactions without regulations or restrictions
• Diversifying investment portfolios
• Avoiding currency controls
• Access higher interest rates
• Receive better banking services

Can the U.S. government Look Into Your Bank Account Without Your Permission?

The government cannot see your financial records without your permission or other lawful means. A federal agency can look at your bank account records without your consent if they have acquired a lawful subpoena, summons, search warrant, or formal written request.

Can Banks Find Out About Other Bank Accounts?

In some situations, other banks may find out information about your other bank accounts. One example of when this may occur is if you apply for a loan or credit card from a bank. The application process may require information about your accounts and access to see how much is available. This information ensures you have the assets available to pay for the loan or credit card balance if you do not make the payments.

Another way a bank may find out about your other bank accounts is if you transfer money from one account to another or have linked your account with another account. Though the bank may know about the different accounts, in this example, the bank cannot access in-depth information about the account, including the balance and transaction history.

Where Can I Open a Bank Account Anonymously?

If you want to open a bank account anonymously, your best option may be to establish an account with an overseas bank. Opening a bank account requiring little to no personal information online may also be possible.

What Countries Allow Anonymous Bank Accounts?

Opening an anonymous bank account is possible in many countries, and it has been proven throughout history that these countries are havens for high net-worth individuals looking for a safe, secure, and secret place to keep their money. Some of the nations that still allow anonymous bank accounts include:

Does Your Bank Account Need Your Legal Name?

As set forth by the USA Patriot Act in 2003, U.S. banks must request a person's legal name when opening any type of bank or credit account.

How Can I Start an Online Numbered Bank Account?

It may be possible online if you want to open an anonymous or numbered account overseas. Some steps to do to open your numbered account with an overseas bank online may include:

• Researching to find offshore banks that offer this service
• Gather required documents
• Complete online application
• Wait for approval
• Once approved, add funds to the account

How to Make a Virtual Bank Account Anonymous?

With many banks requiring account holders' names, there are ways to open an account online while providing as little personal information as possible. Though these methods are not completely anonymous or considered numbered bank accounts, they offer more privacy than standard bank accounts. However, there is always a risk when keeping money in these accounts because they sometimes provide different levels of security than other banks may offer.

Several online accounts only require a valid email address to set up and start depositing, withdrawing, and transferring money. Some ways to open a private bank account online may include the following:

• Use cryptocurrencies
• PayPal
• Google Pay
• Apple Pay Cash
• Paysafecard
• Venmo
• Cash App

Is It Possible to Set up an Anonymous Bank Account to Which People Can Make Donations?

If you want to hide the identity of a person or organization accepting donations, your bank may be able to help. Please speak with your banker to learn how people can make donations to you or your organization without them knowing who you are.

You may also use a payment gateway, such as PayPal or Stripe, where only your email address is shared with those making donations.

Be careful doing this because if you do not report the money received as a donation, it could be considered money laundering or fraud, which has many legal consequences.

If you still feel like an anonymous or numbered bank account is the best option to house your financial assets, conduct thorough research into the bank you wish to use and the legalities of opening the account. You may find it beneficial to keep your money overseas. Still, you want to ensure you know everything possible about what to expect when working with an overseas bank, how your privacy is maintained, and how to handle declaring information to the IRS.

The responses below are not provided, commissioned, reviewed, approved, or otherwise endorsed by any financial entity or advertiser. It is not the advertiser’s responsibility to ensure all posts and/or questions are answered.