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The Panama Papers


Posted in on July 8, 2016

President Obama and the United States Treasury Department have been aggressively going after banks and even individual accountholders in connection with undeclared offshore accounts. In recent years, there has been a strong focus on so-called global tax transparency, which forces banks and accountholders to provide extensive information to taxing authorities. This can, in some cases, damage accountholders who have funds in offshore institutions but haven't really done anything wrong.

Now, the Panama Papers have provided the Administration with even more justification to try to push for international efforts to enforce tax laws and to identify people evading their tax obligations.

Maryland international tax attorneys can provide assistance to accountholders who are concerned about what this so-called push for transparency means to them. We represent people throughout the world who are connected with the U.S. and are concerned about facing consequences due to failure to file a Report of Foreign Bank and Financial Accounts (FBARs) or are otherwise worried they could face IRS and Department of Justice enforcement actions.

The Panama Papers Are Being Used to Push for More International Tax Transparency

It has been reported that the Obama administration is taking multiple steps to try to better enforce tax laws for offshore accounts.  The administration is asking Congress to pass legislation and the Senate to approve numerous pending tax treaties. The administration is also moving forward with executive orders on new transparency rules.  

The rules currently being proposed and/or implemented by the Obama administration are aimed at addressing the alleged misuse of the corporate form by requiring companies to be identified when opening accounts at financial institutions, as opposed to remaining anonymous. There will also be requirements related to reporting company formations and flagging when ownership is transferred. 

New rules would also impose additional requirements on securities brokers, dealers and financial institutions by mandating that these institutions collect and verify personal information on ultimate beneficial owners who open accounts in a company name.

This multi-pronged approach was revealed close to simultaneously with the release of the Panama Papers, which is being described as “the biggest leak of financial data in history.” The Panama Papers consist of 11 million files from a prominent Panama law firm which purport to show how the firm helped foreigners worldwide to evade their tax obligations at home.

The Panama Papers have been released in a massive searchable database that details how around 368,000 accountholders and 300,000 offshore entities maintained their investment accounts in secret at foreign banks.  This searchable database is being used by the administration to help illustrate the tangled webs of connections between offshore investors and anonymous offshore companies that could help those investors hide accounts from the IRS.

As the Panama Papers provide justification for more legal actions, it is likely that life will soon get even more difficult for offshore accountholders due to new compliance requirements.  International tax attorneys like Kevin Thorn can help you comply with ever-changing and ever-increasing red tape in U.S. regulations.

We also provide assistance with a wide variety of problems with the IRS and DOJ, including assisting clients who are concerned about the potential for criminal prosecution based on back taxes owed or failure to file FBARs.  Give us a call as soon as possible to get help.

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