Argentinian soccer star Lionel Messi facing a Spanish tax evasion case, and willfulness and secrecy are key elements. Tax attorney Rob Wood comments on the case, discussed in his Forbes article “For Lionel Messi Or 'Hot Lips' Kramer, Secrecy Can Spell Tax Evasion.”
Wood notes that, while this is a Spanish case, it is being watched by tax experts in the U.S., the U.K., and elsewhere. Increasingly, he suggests, secrecy is being viewed as “a badge of willfulness that can mean more penalties, even jail.”
For all kinds of taxpayers, celebrities or not, there are legitimate reasons for not wanting their names attached to things. Privacy concerns are running headfirst into the government’s view that it is not enough to know the name of an entity; it is necessary to know the name of the ultimate beneficial owner. As Wood points out in his Forbes article, setting up trusts or corporations can be a red flag to the I.R.S.
Wood mentions a proposal in the U.K. to require any entity, regardless of how closely held it is, to display beneficial ownership. This is probably a trend, Wood suggests, such that it will become increasingly difficult for any taxpayer to hide beneficial ownership of assets.
In the Forbes article, Wood also discusses the tax cases of Bernard Kramer and Ty Warner. The article is definitely worth a close look for anyone who has money or assets that might be considered hidden.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.