Last week, the U.S. Treasury finally clarified exactly what it expects U.S. taxpayers to disclose about their offshore holdings. And—no surprise here—they want to know lots more about what you own offshore. Beginning last year , in 2009. And, if you fail to comply, you could face a $10,000 fine and even prison.
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Secret Treasury Agency Wants to RETROACTIVELY Expand Offshore Reporting Requirements [Part I]
In my last column I recounted a recent sleepless night in which I reviewed President Obama’s revenue proposals for the 2011 budget, in a dense document with the picturesque name of the Greenbook . I focused on the Treasury’s proposals to “Combat Under-Reporting of Income on Accounts and Entities in Offshore Jurisdictions.” And I described these proposals as sort of a root canal, but on your money, not your mouth. Here’s a summary of the remaining proposals in the Greenbook along these lines: “Extend Statute of Limitations for Significant Omission of Income Attributable to Foreign Financial Assets.” This proposal is similar to a provision in H.R.
I just returned from a conference in San Antonio sponsored by the American Bar Association’s Section on Taxation. I attended this conference to learn more about plans the Department of Justice (DOJ) and the IRS have going forward in their anti-offshore vendetta, and how the financial institutions and nations affected by it are likely to react.
2010 will bring many surprises from the IRS, most of them unwelcome. You can expect more audits, a crackdown on anyone the IRS considers “wealthy,” and most ominous of all, much higher payments to IRS informants. And of course, dozens of bills before Congress would escalate the “war on wealth” to even greater heights.
We all have stories about the Transportation Security Authority. My “favorite” was the time I waited behind a woman in a wheelchair to pass through the metal detector on the way to board a flight in Miami. The woman was at least 80 years old and quite frail. Nonetheless, the security screener confiscated her hairpin. After all, the woman, while unable to walk unassisted, might have used it as a weapon. Airport security in the USA is a joke, and a bad one at that. It’s easy to create a fake boarding pass with Photoshop. And it’s not that much more difficult to steal someone’s identity to create fake identification documents. Indeed, the entire U.S. airline security process is nothing but “security theater,” a term coined by programmer and security consultant Bruce Schneier. But we still have ID checks, secret databases, and no-fly lists. According to Schneier, it would be much more effective to focus on “suspicious people” trying to board a flight, rather than “suspicious objects.” He would do away with most of the remaining security apparatus, including ID check requirements and the no-fly list
div xmlns=”http://www.w3.org/1999/xhtml”pThe United States is one of only two countries that imposes tax on a citizen’s worldwide income, no matter where that citizen lives. (The other country is, of all places, emEritrea/em.) /ppFor citizens of most high-tax countries, it’s easy to legally avoid the obligation to pay tax on your worldwide income. You simply relocate to a lower-tax jurisdiction, or one that only taxes local income. After an extended period—normally 1-2 years—you become “non-resident” for tax purposes. You no longer have the obligation to pay tax on your worldwide income to the country that issued your passport. You may, however, still be subject to gift and estate taxes. /ppBut not the USA. To permanently disconnect from the obligation to pay U.S. income tax, U.S. citizens must not only leave the United States. They must also take the radical step of giving up U.S
pYou have to admit they never give up. Even if the ideas they’re pushing have been thoroughly discredited for decades. /ppI’m speaking of an idea that even the economist who originally proposed the idea now rejects: a global tax on foreign exchange transactions. /ppLast week, emThe New York Times/em published an article by former French foreign minister Dr.
pIt couldn’t have happened at a better time. The IRS today announced an extension of time for “voluntary disclosures” by taxpayers with unreported offshore accounts. It extended the previous Sept. 23 deadline three weeks, until Oct
For a little while, it looked as if little Austria would be the mouse that roared. As I previously reported , on July 9, Austria's Parliament failed to approve a resolution relaxing the country's strict banking secrecy laws as the OECD demands. But yesterday, September 1, the parliament approved a law to ease banking secrecy in the last EU country on the Organization for Economic Co-operation and Development's (OECD) gray list of tax havens. It was a challenge to assemble a two-thirds majority necessary to weaken the law, but Austria's leaders persuaded legislators of the importance for Austria to get off the OECD's odious list.
The last 18 months have brought unprecedented pressures on offshore centers to relax bank secrecy laws, particularly in relation to tax investigations. While Switzerland has been the centerpiece in the global campaign against bank secrecy laws, it’s hardly been the only jurisdiction targeted in this regard. Another of our favorite offshore centers—Austria—has also been targeted. Austria, along with Switzerland and numerous other countries with bank secrecy laws, wants to be removed from the OECD’s “grey list” of countries that are allegedly not in full compliance with international tax cooperation rules—set, naturally enough, by the OECD. This “international standard” requires Austria (or any other country on the grey list) to release information on financial accounts held by a foreign investor at the request of foreign tax authorities. The request may be in regard to any tax inquiry—civil, criminal, or administrative. The country receiving the request may not invoke a domestic bank secrecy law to block it. Further, the OECD has demanded that grey-listed countries ratify at least 12 “tax information exchange agreements” with other countries. Only after all these demands are met will a country be removed from the grey list. However, on July 9, Austria’s Parliament failed to approve a resolution relaxing the country’s strict banking secrecy laws as the OECD demands. Because these laws are of “constitutional rank” in Austria, the amendment needed two-thirds approval to be adopted. For the moment, Austria’s non-OECD-compliant bank secrecy law remains intact. Austrian authorities will only release account data to foreign authorities if a criminal proceeding is underway in that country against a named individual. In addition, authorities must convince an Austrian court to order the data to be released. Continued OECD saber rattling will likely force the Austrian government to re-introduce the amendment later this year. For instance, the OECD could move Austria to a “blacklist” of uncooperative tax havens, which could have the effect of isolating the country from the global financial system. Austria was removed from this blacklist in March 2009, when it agreed to accept the OECD’s standards on information exchange. Blacklisting would likely make it more difficult for Austrian companies and the Austrian government to borrow money from international sources. It would also mean that individuals and companies doing business in Austria face greater scrutiny from their domestic tax authorities. Notwithstanding these threats, without a great deal more support from ordinary Austrian citizens for weakening secrecy laws, they’re likely to remain intact. Could little Austria be the “test case” for the OECD’s anti-bank secrecy campaign? It may well be if the Austrian Parliament fails to deliver the reforms the OECD demands. (The Austrian bank secrecy law is only one of dozens of “Austrian money secrets” I reveal in my book, Austria Money Secrets. To learn how you can obtain your own copy of this book, click here .) Copyright © 2009 by Mark Nestmann
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Austria Stands Firm on Bank Secrecy—for Now
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