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Worldwide Inquiry Into Tax Evasion

Offshore Account Update

Posted on April 29, 2016 |

Mossack Fonseca is the fourth largest offshore firm in the world. Recently, the firm's database was hacked and extensive details were leaked about investors with offshore accounts. The leaked information is being referred to as The Panama Papers, and the papers provide an unprecedented glimpse into how money moves around the globe. 

Mossack Fonseca was raided shortly before a meeting in Paris in which tax investigators from countries across the globe will meet and review The Panama Papers.  The meeting in Paris is part of an unprecedented global effort to fight tax evasion.

Anyone with offshore funds should be aware of the ongoing crackdown on people with undeclared offshore money. If you have accounts and you haven't followed the rules for reporting those accounts and paying tax on them, you could find yourself at risk of criminal prosecution. A Boston criminal tax lawyer can help if your accounts come to the attention of tax authorities.

Law Firm Raided in Connection with Tax Evasion Investigation

Panama has been classified by France as an uncooperative country in terms of financial disclosures, but the country is aiming to get off France's list. An international panel has been created to review business and legal practices in Panama and Panama has promised its cooperation with tax officials.

Recently, the Attorney General in Panama ordered a police raid of Mossack Fonseca following the leak of the firm's database. If the firm is found to be implicated in aiding in tax evasion, criminal prosecution could follow. 

It is possible Panama is being aggressive in going after the firm or will try to make an example out of the firm because it does not want to be considered uncooperative as countries worldwide come together to fight tax evasion.

Mossack Fonseca insists it did nothing wrong. A large part of its business is setting up offshore accounts and incorporating companies. It claims it simply created companies and set up accounts and wasn't responsible for what the account owners did afterwards. 

Yet, the leaked files from Mossack Fonseca will be used by taxing officials to get an insider glimpse into the world of shadow banking which allegedly makes it possible for people to hide funds from taxing officials.

Officials from multiple countries are meeting in Paris as part of a global effort to fight tax evasion which has been organized by Joint International Tax Shelter Information and Collaboration (Jitsic). Jitsic is leading an aggressive approach to fight tax evasion on a global scale.

Even if Mossack Fonseca is never implicated in tax evasion, the papers from the firm will still help taxing officials to better understand how money moves and how shell companies are created to obscure the identity of accountholders.

With multiple countries cooperating and more information available to taxing authorities, individual accountholders could find themselves under increased risk of having their undeclared accounts found.

You should talk with Kevin Thorn, a criminal tax lawyer in Boston, as soon as possible about how you can reduce potential penalties of having offshore funds or accounts which you have not declared. It is better to act before you are under investigation, as you may have more options for participating in voluntary disclosure programs to secure amnesty from criminal prosecution.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989

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