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Scott Michel Talks to Tax Notes, U.S. Requests Liechtenstein Data
Caplin & Drysdale

Scott Michel Talks to Tax Notes, U.S. Requests Liechtenstein Data

Date: 3/26/2013

Tax Notes quotes Scott D. Michel concerning the Justice Department's request for Liechtenstein to provide statistical data on fiduciaries who have helped U.S. taxpayers set up Liechtenstein "foundations or establishments."  For the full story, please go to Tax Notes' website.

Excerpt taken from the article "Seeking Tax Evaders, U.S. Requests Liechtenstein Data" by Jaime Arora for Tax Notes

Scott D. Michel of Caplin & Drysdale said the IRS and DOJ have made it obvious that they are focused on "enablers" -- including lawyers, accountants, and investment advisers -- who they suspect have assisted U.S. taxpayers in hiding assets. For example, taxpayers who wish to participate in the offshore voluntary disclosure initiative must identify any fiduciaries who provided them with advice and services, he said.

Michel said the IRS is likely developing a database of enablers and tracking names that appear frequently. The recent request to Liechtenstein is intended, at least in part, to gather more information about those individuals, he said. 

There's no question that the letter represents an effort to pursue banks, Michel agreed. In the majority of cases in which an entity was established with a Liechtenstein structure, its funds were held in other countries' banks, he said. Many accounts are in Switzerland, he added.

The U.S. is also making the request to gather information about corporations involved in Liechtenstein arrangements, Michel said. The DOJ's letter asks fiduciaries to include instances in which a corporation separates the settlor or beneficiary from the Liechtenstein entity.

Michel said that Liechtenstein entities often hold stock in the corporations that are the registered owners of the bank accounts. The corporations are often based in countries such as Hong Kong, the British Virgin Islands, and Panama, and the U.S. government will eventually pursue the jurisdictions in which the Liechtenstein entities had corporate interests, Michel said.

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