Skip links

How The Wealthy Commit International Tax Evasion: A Case Study

By Jay R. Nanavati and Jas Singh
Tax Notes Federal
Volume 175, June 20, 2022

In the 1994 movie The Shawshank Redemption, prisoner Andy Dufresne asks head prison guard Byron Hadley if he trusts his wife. At first, the viewers and Hadley think that Dufresne intends some kind of disrespect, and Hadley nearly throws Dufresne off the freshly tarred roof. Luckily, Dufresne explains himself before he sets sail for the hard ground of the prison yard below. Dufresne was trying to teach Hadley what everyone who tries to hide money from the IRS should know: You must be able to trust the people you invite into a tax scheme.

In Pursley,1 Texas attorney Jack Pursley learned this lesson the hard way. Thanks to the IRS’s offshore voluntary disclosure program, Pursley’s erstwhile partner in crime was able to avoid prosecution by implicating Pursley. The story of their partnership is unremarkable because it is similar to so many cases of international tax evasion, but it is interesting because the filings in the case allow us to piece together a fairly detailed case study of how the wealthy evade tax using the international financial system.


Click here for the full article.