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European Union News Quotes Scott Michel on Efforts to Challenge View that U.S. is a Tax Haven
Caplin & Drysdale

European Union News Quotes Scott Michel on Efforts to Challenge View that U.S. is a Tax Haven

Date: 4/11/2016

European Union News spoke with Scott D. Michel on how the Treasury Department is acting to counter the developing view around the world that the U.S. functions as a "tax haven" by allowing companies or other entities to refrain from disclosing their beneficial ownership information to the Internal Revenue Service at the time of the companies formation. The article also addresses due diligence issues for U.S. practitioners in advising foreign investor clients. For the full story, please visit Lexis Advance's website (subscription required).

Excerpt taken from the article.

'There is a growing view of the United States as a tax haven for foreigners seeking to evade their foreign tax obligations or otherwise conceal their holdings', said Scott Michel of law firm Caplin and Drysdale. 'In particular, laws in states such as Delaware permit LLPS [limited liability companies] to register without disclosing their beneficial ownership have been subject to international criticism.'

. . .

As the first stage, the Treasury has announced that it will soon be issuing regulations requiring foreign-owned, single-member LLCs to disclose to the IRS their beneficial owners. "Penalties could be significant for continued non-compliance, and information regarding foreign beneficial ownership will likely be shared with foreign tax authorities," said Michel. 'Wealth advisors and private client professionals around the world should be mindful of these US efforts and of the now clear intention of the USA to collect and share information about foreign investors with other tax authorities', he said. 'Moreover, advisors and practitioners here [in the USA] should be increasingly diligent about foreign clients transferring assets into the US, as the Justice Department has longstanding power to charge Americans with criminal fraud or even money laundering if they knowingly facilitate in the evasion of foreign tax.'

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