As far as reputation, the United States lost some gloss this year. A non-governmental organization (NGO) that combats global corruption ranked the US six spots lower in their annual Corruption Perceptions Index.
So what is the big deal about transparency? We talked earlier about secrecy jurisdictions. Secrecy jurisdictions exist in regions and countries of the world where lax regulation makes it easy to hide wealth, often for the purpose of tax evasion, tax fraud, or money laundering. Offshore tax havens thrive in secrecy jurisdictions that make it easy to mask ownership and transfer large sums of money.
On the opposite end of the spectrum, countries that are more transparent tend to be less corrupt, possess a stronger regulatory framework, and are perceived to be more trustworthy in their support for democracy.
Corruption Perceptions Index 2018
Transparency International is a global watchdog group founded in 1993 that works to bring awareness to global and regional corruption and crime that thrives where transparency is low.
Each year, the Berlin-based organization creates a ranking of 180 territories and countries around the world. The scoring runs from one to 100, with 100 (the higher scores) being indicative of more transparency, which is desirable for a healthy democracy. The ranking is created from the results of 13 surveys drawn from experts and business leaders, and other leading economic organizations like the World Economic Forum, the Economist Intelligence Unit, and the Bertelsmann Foundation.
The group does not evaluate all types of crime, but tries to provide a realistic evaluation of the perception of a country’s corruption. This year, the United States fell outside of the top 20 countries in the ranking. Notes Zoe Reiter, the Acting Representative to the US at Transparency International, “A four point drop in the CPI score is a red flag and comes at a time when the US is experiencing threats to its system of checks and balances, as well as an erosion of ethical norms at the highest levels of power.”
Formerly ranked at #16, the US fell to #22, well outside the top ten countries perceived to be the least corrupt. The top ten are:
- Denmark
- New Zealand
- Finland
- Singapore
- Sweden
- Switzerland
- Norway
- Netherlands
- Canada
- Luxembourg
According to the group, a public opinion survey conducted in the US in 2017 revealed that approximately six out of ten Americans believed the US was more corrupt than the year before, “with the White House considered the most corrupt institution in the US.”
We discussed earlier how the defunding of the Internal Revenue Service has led to reduced prosecution of general tax crime. At the same time, fewer resources drive the IRS to focus on high-asset enterprise or individuals who may court tax controversy through failure to file FBAR reports, or other irregularities with foreign bank accounts.
Loss of global trust and a perception of corruption is not good for business. On a personal or business level, if you are party to allegations of tax fraud, speak with an experienced tax attorney because your reputation—and your liberty—could be at risk.
Knowledgeable representation with IRS audits or criminal tax defense in Cleveland and Chicago
The tax lawyers at Robert J. Fedor, Esq., LLC provide confidential, knowledgeable legal guidance and strategic tax solutions to challenges of tax fraud, offshore tax issues, and criminal tax matters. Call us at 800-579-0997 today.
