May 13 – The United States (U.S.) is currently cooperating with Australia and the U.K. in an effort to expose global customers who fraudulently avoid their legal tax arrangements.
The three countries’ respective tax agencies (the U.S.’ Internal Revenue Service (IRS), the UK’s HM Revenues and Customs (HMRC) and Australia’s Taxation Office (ATO)) have acquired “a substantial amount of data” on potential tax cheats from various countries around the world that have been hiding assets in Singapore, the British Virgin Islands, the Cayman Islands and the Cook Islands. The data reportedly contains not just the identities of the individual owners of the accounts, but also information on the respective advisors that assisted with the arrangements.
The agencies have already offered to share the information with other countries to help prosecute the rogue tax evaders.
“This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion,” stated Steven T. Miller, the Commissioner of the U.S.-based IRS. “Our cooperative work with the United Kingdom and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes.”
Taxpayers are currently allowed to hold offshore accounts for a number of legitimate reasons, even in areas that are known to be tax havens, to diversify their investments, facilitate international business transactions or to obtain easier access to their money while overseas. However, many people have been found to hide their money in countries that do not share banking information to purposely evade taxes.
This multilateral effort is expected to push various countries to process this information as efficiently and effectively as possible so that any laws that have been broken may be enforced properly.
The IRS went all out to catch international tax cheats starting in in 2009, and a total of 38,000 people have confessed to purposely evading and cheating their taxes since then. The IRS has reportedly obtained more than US$5.5 billion in penalties and interest.
The IRS is also diligently working on its efforts to implement the Foreign Account Tax Compliance Act (FATCA), signing information sharing agreements with Switzerland and other countries. FATCA requires individuals to report their overseas financial accounts and foreign financial institutions to report the activities of their American clients to the IRS.