Tax authorities in the U.S., Britain, and Australia today announced they are working with a gigantic cache of leaked data that may be the beginnings of one of the largest tax investigations in history.
The secret records are believed to include those obtained by the International Consortium of Investigative Journalists
that lay bare the individuals behind covert companies and private
trusts in the British Virgin Islands, the Cook Islands, Singapore and
other offshore hideaways.
The hoard of documents obtained by ICIJ represents the biggest stockpile of inside information about the offshore system ever gathered by a media organization.
The U.S. Internal Revenue Service said in a statement
the three nations “have each acquired a substantial amount of data
revealing extensive use of such entities organized in a number of
jurisdictions including Singapore, the British Virgin Islands, Cayman
Islands and the Cook Islands.”
It said the data “contains both the
identities of the individual owners of these entities, as well as the
advisors who assisted in establishing the entity structure.”
The statement said early analysis had
uncovered information that may be relevant to tax administrations of
other jurisdictions that they would be willing to share, at the request
of other countries.
“This is part of a wider effort by the IRS
and other tax administrations to pursue international tax evasion,” said
IRS acting commissioner Steven T. Miller.
"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.”
British tax authorities claim they have even more data than that unearthed by ICIJ.
The total size of the ICIJ files, measured
in gigabytes, is more than 160 times larger than the leak of U.S. State
Department documents by Wikileaks in 2010.
A statement from the British tax office
puts the size of the data obtained by the three tax authorities at 400
gigabytes, compared to the 260 gigabytes gathered by the ICIJ.
“The 400 gigabytes of data is still being
analyzed but early results show the use of companies and trusts in a
number of territories around the world including Singapore, the British
Virgin Islands, the Cayman Islands and the Cook Islands,” the British
tax office statement said.
“The data also exposes information that may
be shared with other tax administrations as part of the global fight
against tax evasion.”
Last month, the ICIJ and 37 media partners began reporting on more than 2.5 million files that include the names
of thousands of American, Australian and British citizens as well as
families and associates of long-time despots, Wall Street swindlers,
Eastern European and Indonesian billionaires, Russian corporate
executives, international arms dealers and a sham-director-fronted
company that the European Union has labeled as a cog in Iran’s
nuclear-development program.
The files leaked to ICIJ provide facts and figures — cash transfers, incorporation dates, links between companies and individuals
— that illustrate how offshore financial secrecy has spread
aggressively around the globe, allowing the wealthy and the
well-connected to dodge taxes and fueling corruption and economic woes
in rich and poor nations alike.
The records detail the offshore holdings of people and companies in more than 170 countries and territories.
The ICIJ publication sparked government inquiries, resignations and a new sense of urgency from European leaders to fight tax evasion. A few days after the articles ran, Europe’s five biggest economic powers — Britain, France, Germany, Italy and Spain — announced they would begin regularly exchanging banking and tax information as a way of identifying tax dodgers and other financial wrongdoers.
The stories
we released in April are the first installment in an ongoing series.
More ICIJ reports will be published throughout the year as we continue
the investigation with our partners.
The files illustrate how offshore financial
secrecy has spread aggressively around the globe, allowing the wealthy
to avoid taxes, fueling corruption and economic woes in rich and poor
nations. The current banking crisis in Cyprus is one example of how the
offshore system can impact an entire country’s financial stability.
The ICIJ worked with 86 investigative
journalists from 46 countries and used data mining software and old
fashioned shoe leather reporting to unveil the previously hidden but
thriving world of fraud, tax dodging and political corruption.
To analyze the documents initially, ICIJ collaborated with journalists from The Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the Canadian Broadcasting Corporation (CBC) and 31 other media partners around the world.
Among the countries included in the data
are: Argentina, Armenia, Australia, Azerbaijan, Belgium, Brazil,
Bulgaria, Canada, Chile, Colombia, Costa Rica, Croatia, Denmark,
Finland, France, Georgia, Germany, Greece, India, Ireland, Italy, Japan,
Kosovo, Latvia, Malaysia, Mexico, Moldova, Netherlands, New Zealand,
Nigeria, Norway, Pakistan, Paraguay, Philippines, Romania, Russia,
Serbia, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland,
Thailand, Ukraine, United Kingdom, United States, and Venezuela.
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