"Panama Papers" Could Spell Trouble For Tax Evaders

The millions of documents leaked from a Panamanian law firm, Mossack Fonseca, detail how the firm helped create thousands of shell companies around the world to help individuals hide offshore assets.[1] This massive stockpile of information, which has come to been known as the “Panama Papers,” includes incriminating information on some of the most powerful people in the world, including sitting and former heads of state.[2] In other words, in the eyes of an IRS investigator, Christmas came early. Still, while interesting in and of itself, what does this mean for someone who, for example, doesn’t run a country and isn’t identified in the leaked documents? Well, if you are up to speed on all of your tax payments and don’t have any assets hidden from Uncle Sam, then likely nothing, besides an interesting story. However, for those who have not been entirely transparent with the government, this may spell trouble. Specifically, the United States is likely to use the information contained in the Panama Papers as ammunition to press criminally liable financial institutions to cooperate with criminal investigations, and to continue cracking down on offshore tax evasion. Furthermore, some speculate that this may cause the United States to shift its attention more toward domestic violations,[3] even though Americans comprised the minority of individuals exposed in the leak.[4]

In sum, the information contained in the Panama Papers will probably prove very useful to the United States’ ongoing war on tax evasion. Now, more than ever, it seems that the criminal investigations and settlements that the Swiss banks recently endured is just a taste of things to come.


–By Tony Nasser, Esq., Barnes Law

 Tony Nasser is an attorney with Barnes Law, licensed to practice law in California.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] https://panamapapers.icij.org/

[2] http://www.bbc.com/news/world-35954224

[3] http://www.law360.com/tax/articles/780500?nl_pk=5c91248d-6416-44b0-9126-8e2ae415ae92&utm_source=newsletter&utm_medium=email&utm_campaign=tax

[4] http://www.nbcnews.com/storyline/panama-papers/why-are-americans-not-included-panama-papers-n551081