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Tax News: Lionel Messi Case Shows Other Countries Are Following the IRS’s Lead with Tax Offenders

After more than a year of tax issues, a Spanish judge has ruled that the tax case against Lionel Messi and his father will proceed.  The case stems from allegations that Messi was running funds through multiple countries and business entities in an attempt to evade taxes.  Messi has denied any wrongdoing but has also made statements that his former agent handled these types of matters.  Also, it appears Messi’s father may have had a larger role in the transactions.

Besides being an interesting story for the sports world and gossip columns, this also points out the global movement towards transparency.  Through FBAR reporting, FATCA, and the offshore voluntary disclosure program, the IRS has made it clear it will no longer stand for secrecy when it comes to foreign accounts and businesses.  The case against Messi shows that other countries, Spain in this case, are taking the lead to join the IRS.  This is very bad news for tax evaders.  With the new reporting of FATCA it was going to be difficult enough to avoid the IRS.  If other countries are going to tighten down on tax abuse as well, not only will it become even more difficult to hide funds, but it also may eliminate some of the incentive.  If taxpayers cannot enjoy lenient tax enforcement in foreign jurisdictions, perhaps they would rather come clean with their situation instead of waiting for the IRS to find them and drop the hammer.

What this all means for the average taxpayer is that in the future it appears the rules will apply and be enforced on everyone.  It also means that all global tax strategies taken should be compliant and transparent.  With so much attention and enforcement, even an honest mistake or just the appearance of impropriety could create a world of headaches.  If you have questions about your global tax structure or reporting of foreign accounts and income contact us at Hone Maxwell LLP today.  We have the experience to help you navigate the extensive new regulations and laws.   As always,  you can follow us on twitter @HMLLPTax or facebook at www.facebook.com/HoneMaxwellLLP for more tax tips and the latest updates on tax news.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

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