For Quick Alerts
For Daily Alerts

US Launches Crackdown On Tax Evasion After Panama Papers Leak

By Super

In the wake of the public firestorm sparked by the Panama Papers scandal, the Obama administration has announced several new rules to combat financial crimes and close current loopholes in the US system that allow foreigners to hide assets in American accounts.

US Launches Crackdown On Tax Evasion After Panama Papers Leak
The announcement follows a month of intense scrutiny after the release to media organisations of more than 11 million leaked documents detailing the global offshore industry. The Department of Treasury issued proposed rules to close a current loophole in the US system that allows foreign persons to hide assets in American account, Treasury Secretary Jack Lew said in a letter to the Congress.

A copy of the letter was released to the press by the White House as the Obama Administration issues a slew of measures and urged the Congress to take necessary legislative actions to strengthen financial transparency and combat money laundering, corruption and tax evasion. The move comes in the wake of mounting criticism of the US in the aftermath of the leaks of the so-called Panama Papers.

"Today's actions build upon the substantial progress the United States and its global partners have made to date in strengthening the global financial system and providing greater transparency, so that criminals and tax cheats cannot hide their activities using anonymous shell companies and other legal entities," the White House said.

"These efforts are critical to preventing criminals from using the global financial system to launder proceeds from corruption or other illegal activities, finance criminal activity or even terrorism, evade international sanctions regimes, or evade taxes," it said.

In recent weeks, the disclosure of the so-called 'Panama Papers' – millions of leaked documents reportedly revealing the use of anonymous offshore shell companies – has brought the issues of illicit financial activity and tax evasion into the spotlight, the White House said. The Panama Papers underscore the importance of the efforts the US has taken domestically, and the efforts we have undertaken with our international partners, to address these shared challenges, it added.

"There is a narrow class of foreign-owned US entities – typically, single-member limited liability companies – that have no obligation to obtain a tax identification number or to report information to the IRS. This loophole can be used to shield the foreign owners of non-US assets or non-US bank accounts," Lew said in his letter. Under these new regulations, these new entities must report ownership an transaction information to the Internal Revenue Service (IRS), helping to further the fight against tax evasion, he said.


Read more about: tax evasion
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more