A new batch of data in the “Panama Papers” was released this morning by the International Consortium of Journalists – the group of international journalists who is managing the editing and release of 11.5 million documents collectively known as the Panama Papers. 36 US taxpayers were among those exposed for tax fraud by the release of today’s information. Tax fraud, in this case, occurs when a US taxpayer attempts to hide income, assets and money in offshore bank accounts, investments or holdings.
One of the examples provided included a former NFL player from the Atlanta Falcons who now resides in Oregon. This individual has been the subject of a Securities and Exchange Commission investigation since 2010, and the documents show that he transferred more than $3,000 to the Panamanian law firm at the center of the controversy: Mossack Fonseca. The law firm was to set up an offshore corporation for the purpose of shielding income and assets from the IRS, which forms the basis of tax fraud.
There have been a series of pundits recommending offshore corporations or foreign trusts as vehicles to shield offshore income and assets from the IRS. For most US taxpayers, this simply amounts to very bad advice – especially when those foreign trusts contain US-based assets. The key to avoiding tax fraud is to participate in the IRS voluntary disclosure program known as the OVDP (Offshore Voluntary Disclosure Program). The OVDP provides relief from criminal tax evasion charges, while providing reduced penalties for undisclosed offshore accounts, assets and income.
US taxpayers must update prior year returns and provide accurate FBARs for a period of up to 6 years. The experienced international tax attorneys at Allen Barron guide our clients through the disclosure process while providing the protections of the attorney client privilege. We invite you to contact us for a free consultation at 866-6531-3470.
