With thanks to Elizabeth Prehn, Law Clerk
In early April 2013, the International Consortium of Investigative Journalists released their report, Secrecy for Sale: Inside the Global Offshore Money Maze. A New York Times Article on this report, states that "the leak of records mainly from the British Virgin Islands, the Cook Islands, and Singapore, covers 2.5 million files that disclose proprietary information about more than 120,000 offshore companies and trusts and nearly 130,000 individuals agents, including the wealthiest people in more than 170 countries." (NY Times article here).
This information has been organized and is now being utilized to identify individuals with the offshore bank accounts for use in tax evasion probes. This may prove to be very uncomfortable for some - legally and politically. For instance, Jerome Cahuzac, who formerly oversaw tax enforcement as a Junior Minister for France's Budget at the Ministry of the Economy, Finance, and External Trade, is now under investigation for tax evasion. This comes on the heels of the publicity surrounding France's tax rate and what has been dubbed the "flight from French taxes."
The story broke after a French investigative website reported that Cahuzac was concealing funds from the government via an undisclosed offshore account. After initially denying these allegations, Cahuzac - who stepped down from his government position, announced that the charges were true. The French Press reports that Cahuzac first opened the account in Switzerland in 2009, but eventually transferred it to a bank in Singapore. It contains approximately $770,000. "It was an unspeakable mistake to think that I could avoid confronting a past that I wanted to think as behind me," Cahuzac, who worked as a cosmetic surgeon before entering politics, said in a statement.
This report outlining the data leak, as well as the U.S. push towards identifying undisclosed accounts, only reinforces the need for experienced tax advice when seeking to eliminate or alleviate potential criminal and civil tax and monetary penalties associated with disclosed and undisclosed offshore bank accounts. If you have an offshore bank account, you should seek advice from a tax attorney highly experienced in international and criminal tax defense. Moskowitz LLP, a tax law firm has been in practice for over 30 years and has assisted hundreds of offshore bank account holders since the enforcement effort has intensified. We provide experienced tax advice with regards to potential criminal and civil tax charges, grand jury investigations, voluntary disclosure, IRS reporting, and related issues surrounding offshore bank account and foreign asset holders. Please contact our office for more information.
Additional Moskowitz LLP articles of note:
A Closer Look at the Non-Willful Penalty (as applied to OVDP), published by the State Bar of California Tax Journal Jan. 2013
Non-Citizens Risk Immigration Status for Offshore Bank Accounts
Disclaimer: Because of the generality of this blog post, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome. Furthermore, in accordance with Treasury Regulation Circular 230, we inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purposes of (i) avoiding tax related penalties under the Internal Revenue Code, or (ii.) promoting, marketing, or recommending to another party any tax related matter addressed herein.