The IRS Panama Papers reveals a few dodgy dealings with a law firm, and the government is asking US tax payers to come clean now about their offshore accounts before they are discovered through an upcoming investigation.
The Internal Revenue Service and Treasury representatives met with their counterparts from around the world last week to discuss cooperation in the aftermath of the disclosures of the vast trove of leaked documents that detail global tax dodging, NBC reports.
“People hiding assets offshore should recognize the continued changes and progress in the international tax arena,” the IRS said in a statement to NBC. “More than ever, their best option remains to come forward voluntarily and participate in the IRS Offshore Voluntary Disclosure Program.”
Although the documents, leaked from the Panamian law firm Mossack Fonseca, hasn’t yet revealed explosive information about US citizens or companies, the papers reportedly contain information that could implicate many Americans, VICE News noted. So far, we know that the International Consortium of Investigative Journalists, who reported the revelations, has identified 211 people with US addresses, but that’s just from a small part of the data.
Why no big American names so far? Americans hide billions of dollars (estimates vary) in offshore accounts every year, but not necessarily in Panama-they tend to favor the Cayman Islands, Singapore or Bermuda. What’s more, they don’t need exotic tax havens, when they can create shell companies in their own country.
Shima Baradaran Baughman, a professor at the University of Utah, told Fusion that Americans “have no need to go to Panama to form a shell company to use for illicit activities.” She added: “It [the leak] should make Americans look internally to see what kinds of corporate illegalities we are allowing within our own borders.”
James Henry, a economist, agreed, adding that the U.S. has an “onshore haven industry.. that is as secretive as anywhere.”
His comments came as other experts confirmed it would take months for journalists to trawl through the 11.5 million documents, meaning it will be a while before the number of Americans involved can be confirmed.
Jack Blum, a Washington lawyer and offshore activity expert, told Fusion is was going to ‘take some time’ due to the enormity of the database. He added that he expected more Americans to show up when stock fraud and manipulations are examined, as well as hedge fund operations.
Other reports have suggested thousands of Americans could be involved.
The leaked documents from one of Panama’s most secretive law firms emerged after hundreds of journalists from across the world spent months interpreting the data, Forbes reported. Sigmunder David Gunlaugsson became the first victim of the leak as he sensationally resigned from his position as Prime Minister of Iceland.