The massive leak dubbed as the “Panama Papers” in the media has brought attention to the ability of high ranking world leaders, the rich and the elite to use foreign bank account and nominee entities to hide their wealth. Passports of at least 200 Americans show up in this week’s massive leak of secret data on secretive offshore shell companies. The Panama-based law firm at the center of the hack, Mossack Fonseca, helped register offshore companies for Americans now accused or convicted of financial crimes in four separate cases, McClatchy reports.
There are at least 200 scanned individual U.S. passports. Some appear to be American retirees purchasing real estate in places like Costa Rica and Panama. Also in the database, about 3,500 shareholders of offshore companies who list U.S. addresses and almost 3,100 companies are tied to offshore professionals based in Miami, New York, and other parts of the United States.
Further complicating matters, some U.S. citizens enjoy dual citizenship and opened accounts under foreign passports. Others appeared to be American retirees purchasing real estate in places like Costa Rica and Panama according to the news source McClatchy.
At Abajian Law we have been warning clients that an information breach or whistleblower is a very likely source of disclosure of a foreign account/business to the IRS. Mr. Abajian is an expert at bringing clients into compliance under amnesty programs with the Federal Government and State Governments before it is too late to do so. He has worked with many high profile individuals with sensitive international tax issues spanning the world. If you suspect that the Panama Papers leak can lead to the discovery of your unreported offshore assets or interests, we urge you to call us for a consultation.
Any willful violations of foreign asset reporting obligations carry harsh sanctions, fees, penalties, and reportable tax. The consequences can be remedied with amnesty programs such as the Offshore Voluntary Disclosure Program commonly referred to as OVDP (for some clients whose behavior was non-willful, we understand that a streamlined submission may be possible). Once a foreign financial bank or facilitator is put on a list of “bad banks,” its account holders can no longer join the OVDP amnesty program. There may still be a window of opportunity to escape criminal prosecution and mitigate harsh penalties for account holders disclosed in the most recent leak.