It is not only the IRS that is after those who hide income overseas but the International Consortium of Investigative Journalists (ICIJ) is also involved. The ICIJ received 2.5 million leaked files containing more than 120,000 secret offshore accounts of companies, trusts and individuals.
The amount of data received by the ICIJ is unprecedented. Measured in gigabytes, the size of the files is 160 times larger than the 2010 leak by Wikileaks on the U.S. State Department documents.
More than a dozen journalists from The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post in the U.S., the Canadian Broadcasting Corporation (CBC), and 31 other media partners from around the world analyzed the leaked files for authenticity and precision.
With the IRS partnering with other governments to help them uncover hidden offshore bank accounts, it is becoming difficult for taxpayers to use overseas accounts to hide taxable income. Abusive tax schemes, Ponzi schemes, and abusive trust tax evasion schemes are commonly used to evade taxes.
It is difficult for the IRS to track the transactions back to American taxpayers because they use cards issued by the tax haven country. That is the reason the IRS introduced the Foreign Account Tax Compliance Act (FATCA).
"Under FATCA, U.S. taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS. This reporting will be made on Form 8938, which taxpayers attach to their federal income tax return, starting this tax filing season. In addition, FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest."
The IRS continues its efforts to recoup tax money from secret offshore accounts and improve tax compliance among taxpayers. There is little doubt that the ICIJ leak will help the IRS in their pursuit.
Labels: IRS, Tax News, Tax Scams, Taxpayers