May 1, 2013
By: Paul Seymour, Director of Client Services
I was recently asked to start doing a periodic radio broadcast on Radio Free Latin America (RFLA), called Offshore Re-education Camp. It’s being piped in to the USSA from a secret location south of the border via short wave radio signals. The aim of RFLA is to offer a ray of hope to our poor countryman still trapped behind the curtain with apparently, no way out.
The show, hosted by Paul Seymour, Director of Client Services at Global Wealth Protection, will provide the truth about offshore entities and bank accounts to those peoples who are continuously bombarded with the party line, and have no access to the truth outside of RFLA.
For those of you who are unable to catch the live broadcasts, we’ll periodically print a transcript of the show here at GWP. Please inquire about how to make donations to keep RFLA, this glimmering fountain of hope for freedom, alive at [email protected]
Originally broadcast at 02:00 Tuesday, April 30, 2013, transcript follows—
One of the biggest misconceptions in countries where governments live and grow via a tax-and-spend-and-control the-populace-mentality, is that offshore entities exist solely in order to evade taxes. A perfect example appeared yesterday entitled: IRS Offshore Disclosure Programs Net $5.5 Billion. The lead in states: “The Internal Revenue Service has collected over $5.5 billion in revenue from taxpayers who came forward and reported on their foreign holdings under its Offshore Voluntary Disclosure Programs, but it could be missing billions more in revenue from tax evaders, according to a new report.”
“The report, issued Friday by the Government Accountability Office, found that as of December 2012, the IRS’s four offshore programs have resulted in more than 39,000 disclosures by taxpayers, producing over $5.5 billion in revenue. The offshore disclosure programs attract taxpayers by offering a reduced risk of criminal prosecution and lower penalties than if the unreported income was discovered by one of IRS’s other enforcement programs.
“Tax evasion by individuals with unreported offshore financial accounts was estimated by one IRS commissioner to amount to several tens of billions of dollars, but no precise figure exists. The IRS has operated four offshore programs since 2003 that offered incentives for taxpayers to disclose their offshore accounts and pay delinquent taxes, interest and penalties.”
A critically-thinking person has to find this laughable. It’s issued by the GAO, first of all, who are completely funded by taxpayer dollars. In other words, every single bureaucrat involved with the compilation, review and publishing of the report, and the data therein, are at risk of losing their jobs if they don’t somehow find ways to “increase revenue”. That means get more of your money, kids. I had to roll on the ground laughing when I read “the offshore disclosure programs attract taxpayers by offering a reduced risk of criminal prosecution and lower penalties than if the unreported income was discovered by one of IRS’s other enforcement programs.” Originally, they said they were offering immunity. Oh well, I guess it’s just a couple of words different now. For many of those who accepted the “amnesty” program, they’ve now been informed that it was just a joke. April fools! Hahahahaha. Many are now facing prison in the land of the jailed.
That brings the term “credibility” into the picture. I’ll save the discussion about how trust in the US dollar will logically follow US Government credibility straight down the toilet for another day. Today is lesson number one of Offshore Re-education Camp. Notice above the terminology that gets loosely thrown around. Keep in mind that these are just the first 3 paragraphs, and I urge you to read it in its entirety. Also staying cognizant of the credibility issue here, we see “former IRS Commissioners” and GAO type units bantering about nefarious sounding phrases like “tax evasion”, and admittedly unsupportable statements like—“estimated by one IRS commissioner to amount to several tens of billions of dollars, but no precise figure exists”. So what’s the bottom line here? Are the sheeple supposed to swallow this crap ladled out by proven unscrupulous bureaucrats with a clear conflict of interest, and conclude: “Those bastards with offshore accounts are just crooks, trying to dodge taxes and make me pay more than my fair share”?
I propose that’s exactly what these non-credible, proven liars, and expert spin-doctors are gambling on. Maybe they’ll even get increased IRS and GAO budgets next year to chase these bad guys.
The truth is, using a phrase like tax evasion in this context, and by someone like an IRS Commissioner, is possibly criminal, as we all know that every citizen has every right in the world to legally minimize their tax exposure. That’s called tax avoidance. The old accountant joke goes—what’s the difference between tax avoidance and tax evasion—about 5 years. Considering the accepted torture in American prisons nowadays, that’s no longer very funny, if it ever was.
Some more truth for you fine people trapped over there behind the curtain: It’s not only legal, but completely moral and ethical (morals and ethics no longer having much to do with current laws) and makes complete common sense (ditto) that one can protect their hard-earned money from vultures who abuse the laws and lack of mores of a litigious society, and/or from unconstitutional governmental confiscations without due process. We only encourage our clients to move after-tax dollars offshore for privacy, and asset protection purposes. We also refer to US tax compliance experts on how to stay in compliance after setting up their offshore structures. As of today, even United Statians are allowed to put their own money anywhere they choose. As of today.
Another myth is offshore asset protection is only available to the rich. Don’t sell yourself short. It costs less to protect your liquid assets in a privacy-respecting jurisdiction, than you very willingly cough up to insure a depreciable asset, like your car. We’re talking about a one-time investment of $2,500, with recurring annual fees of less than $1,000 (<$80/month). Take a minute to wrap your head around that.
Therefore, Uncle Sam needs to brainwash the masses into believing that it’s somehow immoral or unpatriotic to protect their financial privacy and liquid assets from his ever-prying eyes, and ever grubby hands. Maybe they’re even trying to gather support to outlaw such protection of your own money, so that the statists can eat more caviar.
Well, that’s quite a lot for lesson number one, boys and girls. Please read the entire link above and write a short essay on why unelected bureaucrats should be held more accountable. Audit the Fed, for example.
Hasta la próxima muchachos, y mucha suerte.
Paul is an escaped Big 4 CPA (F/S auditor), and Corporate Controller/CFO who found a natural home in the offshore industry with Bobby Casey and the gang at GWP. Contact him at [email protected] to learn more about the realities of economical offshore asset protection.
PS—A couple of very valid comments posted by readers of the article:
“Another perspective from a CPA who works with expats.
“GAO is putting out another propaganda piece by a bankrupt government. At least Accounting Today demonstrated some professional standards and disclosed that most of the money extracted from US citizens was in the form of Penalties… not income taxes. There are two very vocal US Senators who frequently like to brag on the billions in taxes that offshore accounts are depriving the US Treasury — but the numbers don’t add up. Their math is flawed for the sake of a 10 second sound bite on the evening news.
“The GAO talks about immigrants but ignores the reality of millions of people who don’t live in the USA, may have never lived in the USA and may only have a US parent who thought it was cool to get them a US passport — back twenty years ago when it was advantageous to be a US citizen.
“The idea that some individual who is a dual national of some other country has to report his bank account balance to the IRS even if they owe NO taxes, and risk losing 20% of the highest balance is simply outrageous.”
Posted by: tomasinpty | April 29, 2013 7:58 AM
“Interesting article. Nobody can be against the IRS going after tax cheaters who hide accounts in foreign banks with money earned in the USA. The same would apply to any country I would guess.
“But…not one word about Americans who are living and working abroad and as such must have foreign accounts with moneys earned where they are working? They do have earned income exclusion and tax credits for all taxes they pay in the host country. How these rulers are impacting their lives, more specifically how they can cope with the draconian penalties for not reporting FBARS they never knew they had to report? They are afraid of two things: the amount they will spend with forms and reports and the enormous penalties they are subjected to for their mistakes.
“Even Nina Olson from TAS has recognized that this is a trap that must be corrected in her report to the US Congress,
“The USA is the only country in the world that goes after Americans Living and Working Abroad and require that they fill IRS return from money earned in the foreign country they reside. This is called citizenship based taxation as opposed to what other countries do: residency based taxation.”
Posted by: Stressedman | April 29, 2013 8:06 AM