Panama Papers To Be Released May 9, 2016. Why Does It Matter?

By admin of MillarLaw A Professional Corporation On Sunday, May 1, 2016

Panama Papers To Be Released May 9, 2016. Why Does It Matter?

The International Consortium of Investigative Journalists (ICIJ) will release perhaps the largest database of private offshore companies and their ultimate owner ever made public. According to the ICIJ
“The data comes from the Panamanian law firm Mossack Fonseca, one of the top players in the offshore world, and includes information about companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the United States. It links to people in more than 200 countries and territories. When the data is released, users will be able to search through the data and visualize the networks around thousands of offshore entities, including, when possible, Mossack Fonseca’s internal records of the company’s true owners. The interactive database will also include information about more than 100,000 additional companies that were part of the 2013”.

To understand who is likely to be affected by the release of the Panama Papers it is perhaps worthwhile to look at who may have benefited from the use of offshore companies and how. The ICIJ has an interactive depiction of hypothetical persons who would use offshore companies. There are three hypothetical scenarios shown involving (i) a professional athlete, (ii) a politician and (iii) a business executive. There are clearly many more real life situations than those illustrated. The number of U.S taxpayers whose names are going to be found in the database is unknown, but criminal investigations have already begun. The U.S. Attorney for the Southern District of New York recently announced that he has opened a criminal investigation, and 13 foreign banks have been formally asked to produce records by the New York Department of Financial Services.

For some U.S. taxpayers these investigations may preclude acceptance into the Offshore Voluntary Disclosure Program,(OVDP) because the government may claim lack of timeliness (they are simply too late). Form some other U.S. taxpayers, who chose to use the Delinquent Filing Program or the Streamline Procedure they may find that they are the target of IRS and/or Department of Justice enforcement actions. The only U.S. taxpayers who have offshore corporations who are reasonably secure are those who have always been in full compliance with tax and Bank Secrecy laws or who came forward through the OVDP process and have a Closing Agreement.

The IRS is still receptive to taxpayer’s coming forward:

“People hiding assets offshore should recognize the continued changes and progress in the international tax arena” and “come forward voluntarily,” the IRS said in a statement. “The IRS welcomes the OECD’s support of the JITSIC’s work to coordinate the effort by tax authorities across the world to respond to the released information. We will be closely monitoring the situation along with our international tax administration partners as we determine what steps to take to ensure compliance with U.S. tax laws and meet our shared global interests”.

How to come forward needs careful analysis by lawyers skilled in all aspects of voluntary disclosures. Communication between lawyers and clients are generally covered by the attorney-client privilege, whereas communications with others are not privileged in criminal investigations. We at Millarlaw are experts in all aspects of voluntary disclosures, both federal and state. Your inquires are welcome.

Tags: , , ,