Up! It Could Be Worse!
The Sovereign Society
by Bob Bauman: Small
Fish Fry, Big Ones Wiggle Off the Hook
headline is an old saying, to which the traditional reply is: "Sure
enough. I cheered up and it did get worse."
But these days,
I am not sure how much worse it can get.
In the last
14 years here at the Sovereign Society I have had the sad duty to
chronicle and warn about the Leviathan state’s ferocious war against
free market economics, and especially against your freedom to bank,
invest and do business offshore.
war has been led by the leftist Democratic Party in the U.S., including
President Barack Obama, the U.S. Internal Revenue Service (IRS),
the European Union, the Organization for Community and Economic
Development (OECD) and its Financial Action Task Force (FATF), as
well as the United Nations.
Each of these
big spending, high taxers, for their own, and for common tax hungry
reasons, has joined in a coordinated attempt to crush offshore financial
havens which they see as nothing more than centers for massive tax
have reached the frenzy level in the last year or two as the worldwide
recession has reduced tax revenues and in America the deficit and
national debt have become hot political issues.
more tax monies President Obama (he of the trillion dollar deficits)
and his radical left allies in the U.S. Congress, led by U.S. Senator
Carl Levin (D-Mich), and aided and abetted by the IRS, are constantly
devising new ways to curb offshore financial activity and abolish
IRS Pre-Crime Plans
remarks to the National Press Club on April 6th, our old friend,
IRS Commissioner Douglas
Shulman, revealed a startling "look forward" plan
in which all of the information you use in preparing your annual
IRS Form 1040 (W2, 1099, mortgage and bank interest) would be submitted
automatically to the IRS every day in real time throughout the year.
with this expanded snooping power and new sc-fi technology want
to audit your financial activity on a daily basis. After a massive
upgrade in technology, Shulman insisted the IRS would be able to
"pre-calculate" what the IRS expects it should receive from you
in taxes and reject any return that doesn't comply with its
from a bloated agency that over 20 years has spent hundreds of millions
of taxpayer dollars on its multiple inconsistent
computer systems that still don’t work!
If you wish
to know how this nutty idea might be applied, check out the alarming
Report, based on a short story by Philip K. Dick.
In the movie,
set in the year 2054, a specialized U.S. government "pre-crime"
police force sees into the future and stops criminals in their tracks,
arresting them before they commit a crime; sometimes before they
even think about committing a crime.
When I saw
the movie I hopefully thought: "It can’t happen here."
Bob! It already has.
Your Friendly Local Informant
Under one lucrative
IRS program you can make big money snitching on your friends and
family who might be engaged in tax cheating by filing an IRS
IRS cash for
snoops started in the 1960s, but the rules were changed to give
whistleblowers get up to 30% if the IRS collects $2 million or more.
The average payout is reportedly about $24,000. The record year
was 2000, when $10.8 million went to those who ratted out tax cheating
friends, family and coworkers. About 10,000 informants claim IRS
rewards each year.
In the past
the IRS claimed to have 1,000 "controlled informants,"
people who regularly inform on others for pay. Some of them are
accountants. (Doesn't that give you a warm fuzzy feeling?)
Michael Levine, a retired U.S. Customs and DEA officer, said that
in 2005 there were 15,000 informants on the federal payroll. No
doubt that number has been upped since 9-11, 2001.
Now the IRS
is stepping up its use of paid informants. Last week a Pennsylvania
in-house accountant who tipped off the IRS that his employer was
tax cheating received
a $4.5 million IRS whistleblower award. The IRS made certain
the case got plenty of media coverage.
Big Brother would have understood and applauded.
Your Papers Please
those groping TSA bullies were difficult to deal with at airports?
Or you thought
it was not bad enough that the U.S. Congress, following the historic
example of Nazi Germany, Soviet Russia and apartheid South Africa,
has imposed an exit
tax on those who wish to end their U.S. citizenship.
A new government
released last Monday claims that the IRS could collect billions
in owed taxes by blocking delinquent Americans from getting or using
U.S. passports until they settle their alleged IRS debts.The Government
Accountability Office, at the request of Congress, released
a study examining how the government could leverage the U.S.
passport process to recover unpaid taxes. The GAO found that in
fiscal 2008, Americans who received passports owed a collective
$5.8 billion to the IRS and could owe much more, since that estimate
only factored in one year's worth of passport recipients.
The GAO said
that if Congress wants to collects taxes with the help of the State
Department, it would have to authorize denial of passports and authorize
the IRS to share tax data.
Have you ever
received an IRS notice of intent to levy on all your bank accounts
based on $2.50 they claim you owe, or on late filing of a Form 941,
self employment tax?
No doubt many
travelers might owe a small amount of back taxes without even realizing
it. The GAO report showed that only a small percentage of those
who received passports in 2008 were delinquent.
Add to the
"not bad enough" list the fact that the previous Democrat controlled
Congress imposed a near impossible reporting system in the so-called
HIRE Act, which contained an onerous and illogical section billed
as the "Foreign Account Taxpayer Compliance Act," (FATCA). My colleague,
Mark Nestmann, explained this legislative monstrosity. You can read
it here to refresh your memory and rekindled your anger.
Stretching the Tax Laws
Just as the
all-powerful President Obama has decided what
laws he will or will not enforce the IRS is considering stretching
the meaning and intent of an existing law to suit their voracious
appetite for more taxes.
the widening IRS investigation into banks suspected of helping offshore
tax evasion by Americans, the U.S. Justice Department (DOJ) is considering
a novel punishment: imposing a severe monetary penalty on banks
the law heretofore reserved for individual Americans.
is for a violation of failing to file annually by June 30 with the
U.S. Treasury a "Foreign Bank and Financial Accounts"
report. The top failing to file penalty is 50% of the account
balance for each year of violation, a level that can leave tax evaders
owing more than what their unreported accounts held.
the DOJ, hoping to add the scalps of Credit Suisse and HSBC
to their previous UBS trophy, according to court papers and statements
by the banks, is exploring how and whether it could apply the 50%
penalty to the offshore banks, if it can be proven that they helped
to or themselves violated American tax laws.
above) already has driven many offshore banks to drop existing American
clients and refuse new ones, but that only imposes a 30% tax on
uncooperative offshore banks.
If this latest
law stretching 50% tax idea is adopted it should push most other
offshore banks into the anti-American column. Query: Does this mean
the U.S. will demand a combined 80% tax on offshore banks? Just
with permission from the Sovereign
April 21, 2011
E. Bauman is a former Member of the United States House of Representatives
from Maryland, (19731981). He is also a former federal official
and state legislator; Member, Washington, DC Bar; Graduate of the
Georgetown University Law Center (1964) and the School of Foreign
Service (1959), Washington, DC. Robert currently serves as legal
counsel for the Sovereign
© 2011 Sovereign Society