Soccer Star Lionel Messi Found Guilty of Tax Evasion
Earlier this week, a Spanish court found Argentine soccer player Lionel Messi guilty of three counts of tax fraud. The charges were related to allegations raised in 2013 that Messi’s father used a series of shell companies in tax havens to shield royalties and other licensing income from tax. In the scheme, which dated back to 2005, income from his many endorsement contracts with such companies as Pepsi and Adidas was reportedly funneled offshore to Belize and Uruguay through an elaborate structure of entities and countries to avoid paying income tax in Spain.
The soccer star has been sentenced to 21 months in prison, though he will likely only face probation due to Spain’s stance on light prison sentences involving non-violent crimes and non-habitual offenders.
Messi’s conviction comes at a time where high net worth individuals are facing increased scrutiny by tax authorities related to their off-shore holdings.
Since 2012, 30,000 Americans have avoided stiff tax penalties by entering into the IRS streamlined program, stating they had innocent reasons for failing to disclose offshore holdings. Those living in the U.S. who voluntarily came forward paid penalties of 5 percent of their undisclosed offshore assets, while overseas residents paid none. Under the program they received no assurances they would not be prosecuted in the future.
With the recent settlements between the U.S. Government and 80 Swiss banks that participated in a limited-amnesty program, the Justice Department has begun scrutinizing information the banks turned over on thousands of U.S. taxpayers’ Swiss accounts to compare that information with what the tax payers have reported to the IRS. The data could expose U.S. tax payers who hid money in Swiss accounts or failed to disclose all their offshore assets after coming forward under the IRS streamlined program.
U.S. Taxpayers who entered int the IRS program that made it easier to disclose their hidden offshore bank accounts may have thought they put their legal troubles behind them. Now prosecutors may be trying to put some of them in jail for not sharing all.
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