Skip to Main Content

European Union News Quotes Scott Michel on Efforts to Challenge View that U.S. is a Tax Haven

April 11, 2016, European Union News

European Union News spoke with Scott D. Michel on how the Treasury Department is acting to counter the developing view around the world that the U.S. functions as a "tax haven" by allowing companies or other entities to refrain from disclosing their beneficial ownership information to the Internal Revenue Service at the time of the companies formation. The article also addresses due diligence issues for U.S. practitioners in advising foreign investor clients. For the full story, please visit Lexis Advance's website (subscription required).

Excerpt taken from the article.

'There is a growing view of the United States as a tax haven for foreigners seeking to evade their foreign tax obligations or otherwise conceal their holdings', said Scott Michel of law firm Caplin and Drysdale. 'In particular, laws in states such as Delaware permit LLPS [limited liability companies] to register without disclosing their beneficial ownership have been subject to international criticism.'

. . .

As the first stage, the Treasury has announced that it will soon be issuing regulations requiring foreign-owned, single-member LLCs to disclose to the IRS their beneficial owners. "Penalties could be significant for continued non-compliance, and information regarding foreign beneficial ownership will likely be shared with foreign tax authorities," said Michel. 'Wealth advisors and private client professionals around the world should be mindful of these US efforts and of the now clear intention of the USA to collect and share information about foreign investors with other tax authorities', he said. 'Moreover, advisors and practitioners here [in the USA] should be increasingly diligent about foreign clients transferring assets into the US, as the Justice Department has longstanding power to charge Americans with criminal fraud or even money laundering if they knowingly facilitate in the evasion of foreign tax.'


About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
©2021 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)