In the past few days, news of the “Panama Papers” has revealed more than 11 million documents which contain private offshore banking information of many of the world’s rich and famous. The papers reveal the offshore efforts to shelter income and assets of many world leaders and some of the richest citizens across the globe and the offshore tax havens they have used to do so. The leak originated at a law firm in Panama, and was shared with Suddeutsche Zeitung, the largest daily newspaper in Germany. The “Panama Papers” have been compared with the Edward Snowden leaks, as they include detailed transactional and account information on more than 140 politicians (including Vladimir Putin), 33 individuals or entities considered criminal or terrorists by the US, 29 of the top billionaires in the world, as well as famous actors and athletes.
How does this relate to the IRS’ recent offshore initiative under FATCA, and the tracking of offshore investments and assets around the world? Perhaps not as much as originally thought. Many of those on the list have their money in the US, and that has nothing to do with IRS efforts to pursue US taxpayers with offshore accounts and assets. However, the law firm in Panama is one of the leading creators of shell companies for the world’s rich and famous, and the papers provide intricate insight into how the rich and powerful have structured their offshore activities to preserve a level of anonymity and hide income and assets. This knowledge could be used forensically and applied to US taxpayers who utilize the strategies to hide income and assets offshore.
The number of offshore tax havens continues to shrink in 2016, as more than 100 nations have signed onto FATCA, and are providing reciprocal reporting of offshore account and transaction data for US taxpayers directly to the IRS. Those institutions that are not directly reporting are withholding 30% of each transaction conducted by US taxpayers to ensure their institutions are not frozen out of lucrative US markets.
If you presently have (or have at any time in the past 8 years) more than a $10,000 accumulated total in offshore accounts, investments and assets it is time to ensure full compliance with the IRS and updated filings of FBARs and associated OVDP documentation. We invite you to call 866-631-3470 for a free and substantive consultation.