On May 9 the Internal Revenue Service (IRS) announced a plan to share tax information with its peers in Australia and the U.K. Enforcement focus is on trusts and companies holding assets on behalf of residents in jurisdictions throughout the world; and thus potentially engaged in tax evasion.

Even though not always illegal such offshore arrangements are regularly employed to evade tax liabilities on income represented by the principal or on the income generated by the underlying assets. The IRS, Australian Tax Office, and HM Revenue & Customs are hoping that they can leverage efficiencies attained through cooperation to more thoroughly enforce any information reporting laws that may have been broken. As many of you know such cross-border cooperation is becoming quite commonplace; witness the increasing number of countries signing on to help the IRS implement FATCA.

If you are a U.S. taxpayer holding assets through offshore entities we recommend that you review your tax obligations and seek professional advice if necessary; as you could face not just penalty but also possible criminal prosecution.