U.S., U.K., and Australia announce cooperative venture against tax evasion

BY SALLY P. SCHREIBER, J.D.

The IRS announced Thursday that it, the Australian Tax Office, and HM Revenue and Customs (the U.K. tax authority) have obtained information about a large number of trusts and companies holding assets on behalf of residents throughout the world and plan to share that information with other countries’ tax authorities (IR-2013-48).

This information reveals the extensive use of these entities, which are organized in a number of jurisdictions, including Singapore, the British Virgin Islands, Cayman Islands, and the Cook Islands, and can be used to avoid tax liabilities.

The three taxing authorities have obtained both the identities of the individual owners of these entities and the advisers who helped establish the entities, and they are prepared to share the information with tax administrations of countries that request it. “Increasingly, tax administrations are working together in this way to assist one another in identifying noncompliance with the tax laws,” the IRS said.

Steven Miller, acting IRS commissioner, said in the announcement, “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.”

In its announcement, the IRS explained that while there is nothing illegal about holding assets through offshore entities, people often use them to evade taxes, which is illegal. It also reiterated that advisers who promote offshore arrangements as a way to avoid tax or reporting requirements may be subject to civil or criminal penalties.

The announcement also advised U.S. taxpayers who may hold assets through these offshore entities to review their tax obligations for these holdings, seek professional advice, and participate in the IRS’s offshore voluntary disclosure program if necessary (an amnesty program that permits U.S. taxpayers with offshore holdings to disclose them and pay reduced penalties).

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

Scorecard preparation templates and tips

With Workiva, we've created a PowerPoint deck that helps you create your own scorecards -- quick reference reports used across organizations to update stakeholders on the performance of defined deliverables.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.