New Leak Exposes Even More Offshore Dealings

Posted in Offshore Account Update on October 21, 2016 | Share

Offshore accounts used to promise privacy for accountholders. Increasingly, however, individuals with funds located offshore are finding that their information is being made public. Sometimes, this happens because banks participate in amnesty programs so their institutions can avoid prosecution. These amnesty deals involve turning over details about accountholders.

In other situations, the private information about offshore accountholders is released by an unauthorized leak. This happened recently with the Panama Papers, which were a treasure-trove of documents from a major Panama law firm. Now, it has happened again. A German newspaper received a list of politicians and individuals who are linked to more than 175,000 trusts, foundations, and Bahamian companies which were registered within the Bahamas between 1990 and 2016.

The information from these leaks means that governments and taxing authorities now have extensive behind-the-scenes looks at how accountholders structure accounts and transactions to try to maintain the privacy and confidentiality of their offshore accounts. The leaks also mean that no one can be confident their own information will not be made public if they have offshore accounts.

If you have any offshore accounts, you need to be prepared for the loss of your privacy, as there is a substantial risk that your accounts are no longer confidential or will no longer be confidential after the next leak. A Washington DC international tax attorney can provide you with assistance in preparing for the possibility that the IRS is going to get your info.

Offshore Account Information Made Public – Again

The German newspaper which received the information about the Bahamian companies is called Süddeutsche Zeitung. It shared the details about the accounts and accountholders with the International Consortium of Investigative Journalists (ICIJ), which is based in Washington, D.C.

The leaked documents are attracting interest because the Bahamas has a long history of serving as a tax haven due to its lack of transparency.

Back in 2000, the Organization for Economic Cooperation and Development (OECD) put the Bahamas on its blacklist of countries which the OECD believes aids in tax dodging. The OECD is the world's leading tax policy forum, so the Bahamas rushed through nine laws over the next year to try to get off the list.

This kept the Bahamas off the blacklist, but it was put on the “gray list” in 2009, which indicates the country has “significant nonconformity with international standards.” In June of 2015, the Bahamas was also one of 30 countries which the European Union placed on a list of uncooperative tax havens. 

The reticence of the Bahamas to jump on board with global efforts to fight tax evasion has caused problems for U.S. officials, who have been aggressively trying to pursue cases related to money-laundering and tax evasion but who have been stonewalled because the Bahamas does not make the names of directors of companies registered in the Bahamas easily searchable.

Now, with this leak, the IRS and taxing authorities worldwide will have all the info they need about who accounts in the Bahamas belong to.  Those with offshore accounts need to be prepared for their info to come to light, one way or another. Kevin Thorn, a DC international tax attorney, can help you decide on the best approach to take to protect your investments. 

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