Till Offshore Do Us Part: Uncovering Assets Hidden from Spouses and Tax Authorities
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TILL OFFSHORE DO US PART: UNCOVERING ASSETS HIDDEN
FROM SPOUSES AND TAX AUTHORITIES
KHRISTA McCARDEN*
INTRODUCTION
Governments and individuals around the world know that offshore accounts
are used to hide assets from tax authorities.' However, the Panama Papers
brought to the forefront a less well-known use of offshore accounts: hiding assets
from a spouse during divorce proceedings.2 The Panama Papers contain
information about offshore accounts used by public officials, drug kingpins,
money launderers, and perhaps surprisingly, high net worth divorcees.3 The
Panamanian firm featured prominently in the leak of information, Mossack
Fonseca, has admitted to at least considering assisting wealthy individuals with
hiding assets from their spouses who may have a claim to them in divorce
proceedings.4
Given the ease associated with electronically transferring funds to countries
today, it has become increasingly difficult to uncover assets that have been
hidden offshore.5 While in recent years there have been numerous efforts to
combat offshore tax haven abuses, such as heavy penalties and new reporting
* Associate Professor of Law, Pepperdine University School of Law; J.D. cum laude, Harvard Law
School, 2003; A.B. Harvard College, magna cum laude.
1. See generally Carolyn Michelle Najera, Combating Offshore Tax Evasion: Why the United
States Should Be Able to Prevent American Tax Evaders from Using Swiss Bank Accounts to Hide
Their Assets, 17 Sw. J. INT'L L. 205 (2011); Lawrence J. Trautman, Following the Money: Lessons
from the Panama Papers Part 1: Tip of the Iceberg, 121 PA. ST. L. REV. 807, 809-10 (2017); Scott
D. Michael, Zhanna A. Zierring & Young Ran Kim, U.S. Offshore Account Enforcement Issues, J.
TAx PRAC. & PROC., Aug.-Sept. 2014, at 49.
2. See, e.g., Ana Swanson, How the World's Wealthy Hide Millions Offshore -from Their
Spouses, WASH. POST (Apr. 19, 2016), https://www.washingtonpost.com/news/wonk/wp/2016/
0419/how-the-worlds-wealthy-hide-millions-offshore-from-their-spouses/?utmterm=.b0638d4cf
3ad [https://perma.cc/W5P2-W8R9].
3. Will Fitzgibbon, How the One Percenters Divorce: Offshore Intrigue Plays Hide and Seek
with Millions, INT'L CONSORTIUM INVESTIGATIVE JOURNALISTS (Apr. 3, 2016), https://pana
mapapers.icij.org/20160403-divorce-offshore-intrigue.html [https://perma.cc/R2FJ-HNF8];
Trautman, supra note 1, at 809-10; Swanson, supra note 2.
4. Swanson, supra note 2.
5. See id. (The problem with most of these divorce cases is that it can take a fantastic amount
of time and money to uncover offshore accounts .... .).
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Till Offshore Do Us Part: Uncovering Assets Hidden from Spouses and Tax Authorities
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