Taxpayers with offshore accounts are already under stepped-up scrutiny from government agencies. U.S. authorities have increased their enforcement efforts in recent years on disclosure requirements for foreign accounts that meet certain thresholds. And the Foreign Account Tax Compliance Act (FATCA) has forced many foreign banks and other financial institutions to share more and more information with tax authorities about their account holders.
But government is not the only source of increased scrutiny of offshore transactions. In this post, we will take note of how a group of investigative journalists has also sought to bring more transparency to offshore accounts that may have been used for tax evasion.
The group is called the International Consortium of Investigative Journalists, (ICIJ). After obtaining documents leaked by a former employee of the banking giant HSBC, the ICIJ’s began investigating possible tax evasion by the bank and its clients through the bank’s Swiss bank operations. The employee, who viewed himself as whistleblower, originally provided the documents to the French newspaper Le Monde.
The ICIJ has now released findings from its investigation. The consortium of journalists concluded that HSBC had helped more than 100,000 clients conceal about $100 billion in Swiss accounts.
These clients include individuals and various business entities from all over the world, as well as governmental institutions from Venezuela involved in handling that nation’s oil wealth.
It remains to be seen what the fallout from the ICIJ’s findings will be, in terms of audits and criminal charges,
But as we discussed in our July 11 post last year, failure to properly report or pay appropriate taxes on offshore accounts can lead not result in stiff fines. It can also result in prison sentences.
Source: CNN Money, “HSBC helped conceal $100 billion in Swiss accounts – report,” Charles Riley, Feb. 9, 2015
Additional source: Zerohedge.com, “If your name is on this list, prepare to be audited (or worse)," Tyler Durden, Feb. 9, 2015