Denmark to Buy Panama Papers to Fight Tax Evasion

Posted in Offshore Account Update on September 28, 2016 | Share

The Panama Papers is the name that has been given to 11.5 million documents which were obtained from a Panama law firm server and which were made public. The Papers contained information on more than 214,488 offshore entities and the papers demonstrate the ways in which offshore entities, offshore financial accounts, and other tools are used to hide money and protect privacy.

With the leak of the Panama Papers, an unprecedented insider look into the offshore banking industry was provided and many of the world's wealthiest individuals, as well as many world leaders, have had their information shared.

The data was leaked by an anonymous whistleblower and not all of the accountholders who had their private information compromised in the leak were breaking any tax laws at all. Despite this, governments are aiming to take advantage of the information which was contained within the Panama Papers to go after investors who evaded taxes through the use of offshore accounts and entities. 

Now, Denmark has announced that authorities are actually buying data from the leaked Panama Papers, which could be used to obtain specific details on Danish taxpayers.  Their use of the data to pursue investigations may mean other countries are likely to do the same -- which could be a problem for taxpayers whose data was leaked.

The Panama Papers are just one of many factors making it harder than ever to keep offshore accounts a secret. If you have money offshore and you have not reported it to the IRS or paid the full amount of taxes required, you should be proactive in considering your options before the government initiates an investigation or begins legal action. A Washington DC tax attorney can provide details on what your options are and can help you to get the best resolution you can to your issues with undeclared offshore funds.

Why Does Denmark Want the Documents?

Denmark is purchasing some of the Panama Papers documents because it is believed that the papers contain information about up to 600 Danish people.   The taxation minister of Denmark said that the Custom and Tax Administration in Denmark received an anonymous offer to make the sale of the data.  The purchase of the documents is said to be costing a “single-digit million kroner, where 9 million is equivalent to $1.4 million.”

Parties in Denmark's Parliament supported the purchase, stating: “the material contains relevant and valid information about several hundred Danish taxpayers.”

Of course, with the offer to sell the records anonymously, as well as the identity of the leaker remaining anonymous, there is always a risk that the data will not prove to be as accurate or useful as Danish authorities are hoping. The fact the authorities are using leaked data from a law firm which is supposed to protect its clients’ privacy is also problematic, but the country is going forward anyway.

The purchase shows the extent to which countries will go to try to fight any efforts to evade taxes. The global crackdown on tax evasion has taken many forms, and the purchase of the Panama Papers is one more example of the aggressive tactics used to go after alleged violators of tax laws.

For those in the U.S., taxing authorities are also working diligently towards fighting tax evasion- and you need to be prepared. A DC tax attorney like Kevin Thorn should be consulted now to find out about proactive steps you can take if you have undeclared offshore funds.

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