The world’s tax men are ganging up to take on the creative accountants at the likes of Google, who have been allegedly engineering some fairly staggering tax evasion moves.
According to a statement at the US IRS, tax administrations from the United States, Australia and the United Kingdom are to share tax information involving a multitude of trusts and companies holding assets on behalf of residents in jurisdictions throughout the world.
The reason for the teaming up is because each of the authorities have been given a shedload of data from a whistleblower which shows extensive use of such entities organised in a number of jurisdictions including Singapore, the British Virgin Islands, Cayman Islands and the Cook Islands.
The secret records are believed to have come from the International Consortium of Investigative Journalists. The hoard of documents obtained by the ICIJ represents the biggest stockpile of inside information about the offshore system ever gathered by a media organisation.
But the British taxman claims it has even more data, but he is not saying where he got it from.
The total size of the ICIJ files, measured in gigabytes, is more than 160 times larger than the leak of US State Department documents by Wikileaks in 2010.
The data contains both the identities of the individual owners of these entities, as well as the advisers who assisted in establishing the entity structure.
The IRS, Australian Tax Office and HM Revenue & Customs have been looking at this data and have uncovered information that may be relevant to tax administrations of other jurisdictions.
They have hatched out a cunning plan for sharing the data, as well as their preliminary analysis, if requested by those other tax administrations.
IRS Acting Commissioner Steven T. Miller said that it was part of a wider effort by the IRS and other tax administrations to pursue international tax evasion.
The statement does not mention Google, which has been hitting the headlines in the UK with its clever moves to avoid paying British tax.
One thing that might give corporations the heebie-jeebies is that the tax authorities might be targeting advisers. Miller warned that the accountants who come up with such cunning plans to avoid tax might be subject to civil penalties or criminal prosecution for promoting such arrangements.
He also suggested that any US tax payers holding assets through offshore entities might want to “review their tax obligations” before inquiries begin.