I.R.S. Offers New Amnesty Deal for Offshore Accounts

[alp227]

Source: The New York Times

The Internal Revenue Service announced a new initiative on Tuesday intended to lure tax evaders, but with stiffer penalties than those offered by a previous program.

Under the initiative, Americans with hidden offshore accounts have until Aug. 31 to come forward voluntarily and report the accounts to the I.R.S. in exchange for penalties that, while below what they would ordinarily pay, are still higher than those offered in an earlier amnesty program.

Tax and criminal defense lawyers had been speculating about a possible new program after recent statements by I.R.S. officials, including the commissioner, Douglas H. Shulman. The agency created the latest program amid a widening crackdown by federal authorities on offshore accounts sold to wealthy Americans.

Read more: http://www.nytimes.com/2011/02/09/business/09tax.html

[Divine Discontent]

1. so, like one more chance for them? how about they just round them up and put them in

prison for a year or two, and the millions that were in overseas accounts goes towards social programs here that these swindlers, basically, stole from by not having their money be taxed properly?

[KansDem]

6. Works for me...nt

[Scruffy1]

18. Justice? Justice? Is this a joke?

But they USA is too busy chasing down anti-war people to bother with rich criminals who can donate to the candidate of their choice. Let me see ....now Leonard Peltier doing life in prison, Marie Mason doing 22 years for property crimes and the list goes on. Ever time i here an ass hat talk about Democracy, Freedom and Justice my eyeball pressure goes up.If you actually work for these things you run the risk of having your door kicked and your meager possessions taken away as members of the Anti-War Committee and Women Against Military Madness. It's so common that it raised a lot less interest than the movement of a TV show host from one venue to another among the progressive community.
Need I also mention that some of nations most powerful regularly meet with the felon known as David Koch? Or that we have another felon as a governor Florida?

[indepat]

7. Now, now, we must come to grips with the fact that the wealthy are not like you and I

:hi:

[The Magistrate]

8. Sounds Like A Plan, Sir....

[xchrom]

2. is the irs saying they know where all these accounts are? nt

[The Backlash Cometh]

3. Can we get them if they don't turn themselves in?

[katnapped]

4. Sure can

We'll send them a couple of sternly worded letters! That'll have em quaking in their boots!

[Myrina]

5. Well, how nice.

Wish the IRS would have given me amnesty when it decided I calc'd my 2005 taxes wrong and it wanted that $900 back immediately or they were going to garnish my wages ... oh wait, I'm just a working slob. Nevermind ...

:eyes:

[bobthedrummer]

9. K&R + The Money Laundering Thread: A DU Collaborative Investigation

(archived thread started 7-9-10)
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8716178

[naaman fletcher]

10. Not all of these people are criminals evading taxes

I have various offshore personal and business accounts as I have offshore businesses. If you open an offshore personal account or business account you have to report it by 6/30 of the following year. Not report the taxes.. of course you have to do that, but you have to fill out forms about the accounts. Let's say your taxes are complex and you file for an extension.. well, too bad, you can't report the accounts as of the extended date, those forms are still 6/30.

Let's say you make the mistake of giving your lawyer in, say, england a power of attorney and like many businesses you need 6 or 7 accounts. It's quite possible your company has an account you are not aware of, but you are an officer and have some control over it.

Boom.. you are totally screwed.

Get the tax evaders, get them hard, but anyone who complains about our balance of trade needs to understand that doing business overseas as an american is a royal pain in the ass, whereas others don't have those problems doing business here.

[Joanne98]

11. They still won't pay.

[somone]

12. Okay, rich people, this is your last chance.... before the next one

[NCcoast]

13. The Wiki effect

As soon as I had heard that a whistle blower would expose wealthy Americans, corporations and politicians who had offshore bank accounts, I thought, they'll never touch these people. How could they? If the feds wanted to get to them they would have already. Responding to the information that Wikileaks puts out would have legitimized Wikileaks. Not responding would expose the preferential treatment given to the wealthy and powerful. So they got out in front with an amnesty program. Toothless tigers, handmaidens to the power elite. Worthless

[Dover]

14. With bank accounts under FDIC protections so limited (currently I think it's $250,000)

I've often wondered what people with mega-millions must do to secure their wealth (particularly liquid assets) if not in an offshore account or otherwise invested.
It's something of a puzzle.

What I haven't heard said in all of this tax evasion crackdown is what is being done to make it
illegal for banks to set up these accounts to begin with. As I understand it, from a dated
Mother Jones article about this, the big banks often are one of the middlemen who set up these
accounts and it's not illegal! That was a shocker for me. That is a service banks offer to their wealthy clients.
So it was, in a sense, encouraged by being acceptable practice.
Is it still going on? Probably so.

[closeupready]

15. You'd have to be more specific about what kind of account, its purpose, etc.

There are reporting requirements and Know Your Customer laws that domestic banks must adhere to - and even internationally-located banks (such as those in Switzerland) must adhere to banking treaties and accords, even though - as we know - they don't always do so.

[Dover]

16. Here's what the article said:

...The world's largest financial institutions are also growing richer by offering private banking services to their top clients. Big-time American players include Merrill Lynch, Chase Manhattan, J.P. Morgan, Morgan Stanley, and Goldman Sachs. The leading U.S. private banker is Citibank, which administers trusts and shell corporations for some 40,000 clients through its operations in New York, London, the Bahamas, the Cayman Islands, the Isle of Jersey, and Switzerland.

To open an account, private banking clients must generally deposit at least $1 million. According to a report by the Senate Permanent Subcommittee on Investigations, private bankers then assign the client a "relationship manager" who creates offshore trusts, handles all financial transactions -- and helps ensure secrecy. "Private banks routinely create shell companies and trusts to shield the identity of the beneficial owner of a bank account," the report states. "Private banks also open accounts under code names and will, when asked, refer to clients by code names or encode account transactions."

One former private banker who had more than 30 clients, each with as many as 15 shell companies, told the subcommittee that his own bank prohibited him from keeping any records linking front operations to their owners. In another case, Federal Reserve examiners asked Bankers Trust to create a database identifying the owners of shell companies. The bank complied -- by setting up the database on the Isle of Jersey in the English Channel, which requires U.S. investigators to request names on a case-by-case basis from Jersey courts. The effort to create and shelter multiple accounts "complicates regulatory oversight and law enforcement," the Senate subcommittee concluded, "making it nearly impossible for an outside reviewer to be sure that all private bank accounts belonging to an individual have been identified."

The secrecy makes it easy for clients of private banks to hide their wealth, whatever its source. Citibank's clients have included the family of Sani Abacha, the former Nigerian general who plundered billions of dollars from his nation's treasury, and dictator Omar Bongo of Gabon, for whom Citibank established a Bahamian shell corporation to stash his looted treasure. Citibank also helped Raul Salinas, brother of former Mexican president Carlos Salinas, by transferring tens of millions of dollars out of Mexico and depositing the money in European banks under the names of untraceable companies registered in the Cayman Islands. Citibank never used Salinas' name in bank communications, referring to him instead as "Confidential Client Number 2," or "CC-2."

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x46457

[closeupready]

17. Part of the issue here is that banks seem to be relying on local laws (offshore)

to govern how the accounts are administered, i.e., it's a game of "our hands our tied due to local laws."

These people ALWAYS stay one step ahead of regulators and regulations. So I have no doubt the banks are in FULL COMPLIANCE with the letter of US laws and regulations. The spirit? Not so much.

[Dover]

20. Check this out. I've been doing a little homework and learned something new.

..from my post (below)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4725849&mesg_id=4726252

While it seems clear the tax avoiders are in a panick over this currency control legislation slipped into HIRE last year, I think the government is also desperate and wonder if going after these assets is too little too late. The economy is imploding, and with it, perhaps our government too....

[No Elephants]

21. "Otherwise invested" is key. Most people do not keep millions in the bank, when

it earns muh more {potentially} in other investments.

Although I know a wealthy woman who stuffs a lot of $$ her dad gives her into safe deposit boxes. I am sure her dad paid all applicable gift taxes, though. :sarcasm:

If you do want a few million in the bank, though, you (or your staff) can split monies among banks (five banks per million so interest does not take you over $250K for a good while) and/or use different vehicles, like trusts and retirement plans.

[Dover]

19. Some things about all this you may not know...

I just learned about this myself.

Have you heard about the HIRE Act? Well apparently there was some legislation slipped in there by the Obama Administration that has many wealthy types and offshorers considering some drastic measures to protect their wealth from the long arms of a hungry government.

Read these two articles by an author representing that crowd. They are panicking.


Currency Controls: Now Law in USA through HIRE Act
http://www.qwealthreport.com/blog/currency-controls-now-law-in-usa-through-hire-act/


HIRE Act: A Blessing in Disguise? (HIRE too "draconian" and impractical to have legs?)
http://www.qwealthreport.com/blog/hire-act-a-blessing-in-disguise/


MoneyLaundering.com
http://www.moneylaundering.com/Pages/Home.aspx

[No Elephants]

22. Where does it say the Obama admin "slipped" those provisions into the HIRE Act (as opposed

to folk in Congress)?

There has been a good deal of prior legislation re: offshore accounts, including a 2007 law introduced by then Senator Obama; and the WH credited Rangel and others with coming up with the provisions on which the WH proposal was based:

"The Obama Administration hopes to build on proposals by Senate Finance Committee Chairman Max Baucus and House Ways and Means Chairman Charles Rangel – as well as other leaders on this issue like Senator Carl Levin and Congressman Lloyd Doggett – to pass bipartisan legislation over the coming months.

<snip>

The Administration’s Proposal
Level the Playing Field: The Administration’s commonsense proposal, similar to an earlier measure proposed by House Ways and Means Chairman Charles Rangel, would level the playing field by requiring a company to defer any deductions – such as for interest expenses associated with untaxed overseas investment – until the company repatriates its earnings back home. In other words, companies would only be able to take a deduction on their U.S. taxes for foreign expenses when they also pay taxes on their foreign profits in the United States. This proposal makes an exception for deductions for research and experimentation because of the positive spillover impacts of those investments on the U.S. economy.

http://www.whitehouse.gov/the_press_office/LEVELING-THE-PLAYING-FIELD-CURBING-TAX-HAVENS-AND-REMOVING-TAX-INCENTIVES-FOR-SHIFTING-JOBS-OVERSEAS/


Also, your sources are blogs of folk trying to sell rich folk and their reps (or rep wannabes) courses on what to do with their money. I don't know how authoritative they are. At that, I did not read their content as you did.