White House to Combat Tax Evasion
by Jessica Schieder, 6/18/2013
The White House released a four-step National Action Plan this morning, June 18, outlining an initiative to tackle tax evasion and money laundering. The plan reflects an international initiative agreed upon by the U.S. and seven foreign governments at a G8 Summit being held in Northern Ireland.
Ahead of the talks, U.K. Prime Minister David Cameron had announced ambitions to discuss tax havens and tax evasion during the summit. The G8 Action Plan reflects the consensus reached in negotiations among the participating nations, including the United States, the United Kingdom, France, Germany, Italy, Canada, Japan, and Russia.
The G8 agreement commits the United States to adopting rules requiring companies to identify their “beneficial” owners, making the use of shell companies to hide profits significantly more difficult. Additionally, the G8 nations resolved to make information about “beneficial” ownership available to law enforcement and tax authorities and adopt measures to combat money laundering.
In order to implement the G8 action plan in the United States, the Obama administration released its own four-step National Action Plan, including the following initiatives:
- Conduct a risk assessment to identify major money laundering threats and vulnerabilities;
- Advocate for legislation to identify the “beneficial” owners of companies and address money laundering;
- Adopt new rules requiring financial institutions to identify their customers; and
- Work cooperatively with other nations to further improve the transparency of international finance.
Cumulatively, the White House expects these measures to “combat the criminal misuse of businesses, shell companies and front companies” in order to “shelter assets and evade taxes.”
To read the full text of the White House statement, click here.
Update: In a June 19 story in Politico, lawmakers said they would need to see the administration's legislation before supporting it.
Influential groups like the National Foreign Trade Council have also come out in support of the concepts but only as a part of tax reform.
“Reforming the antiquated U.S. tax code is the only way to enact most of the legislative initiatives included in the National Action Plan,” the group said in a statement.