The Freedom Watch

South Korea Toughens Up Rules On Overseas Accounts

"In a bid to reduce the incidence of tax evasion, the National Tax Service (NTS) is to impose heavier fines on those South Korean residents who are found to hold substantial unexplained financial accounts in overseas jurisdictions. Beginning next year, South Koreans with overseas financial accounts worth more than KRW1bn (USD896,000) will be obligated to report the assets, and to explain the sources of the funds. Failure to do so will result in a 10 percent fine, which will be even greater if the source is found to be the result of tax evasion. The NTS's plans are included within the Government's new proposals to raise additional tax revenue for its welfare programs by improving tax compliance." Continue reading →

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Banker Groups Sue Treasury, IRS Over Account Reporting Rule or (DATCA)

"Two banker groups sued the U.S. challenging rules that require financial institutions to report information on accounts held by nonresident aliens that may be shared with 72 foreign governments. The Texas Bankers Association and the Florida Bankers Association, in a lawsuit filed today against the Treasury Department and the Internal Revenue Service in federal court in Washington, said the rules are discouraging investment in the U.S. by nonresidents who fear their information may be shared with the governments of countries including Egypt, Pakistan and Venezuela." Continue reading →

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How the IRS Violates Legal Tender Laws

"One would think that it is more costly to deal with non-cash methods of payment. In any case, the last time I checked, the Federal Reserve Notes in my wallet all still bore the notice, 'This note is legal tender for all debts public and private' This means that they cannot be refused by the creditor for repayment of a debt previously incurred–especially not for payment of taxes, which are the pre-eminent 'public debt.' While the IRS may not be strictly in violation of legal tender laws, because one can still use cash to pay at some IRS offices, its anti-cash policy is just another tactic in the Federal government’s relentless war to stamp out cash payments." Continue reading →

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U.S. Government Watchdog Agency Urges IRS to Intensify Offshore Efforts

"A much larger number of what the IRS calls 'recalcitrant' account-holders chose another route. Instead of entering a voluntary disclosure program, they simply started reporting their foreign accounts, without paying penalties or interest. Such taxpayers avoid paying any delinquent taxes, interest, or penalties, unless audited. Evidence of an explosion in quiet disclosures comes from the fact the number of people filing FBAR forms nearly doubled from 281,000 in 2007 to 516,000 in 2010. The agency has urged the IRS to examine closely these first-time filers for disclosure violations in earlier years. And, the IRS has promised to do just that." Continue reading →

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Britain hits offshore gambling industry with 300 million pounds in taxes

"Under rules published on Friday, Britain will tax gambling according to where customers are based rather than where the online operator is registered, meaning that offshore operators pay the same 15% tax rate as domestic companies. The tax will be levied on companies' gross profit in the 2 billion pound remote-gambling market. 'It is unacceptable that gambling companies can avoid UK taxes by moving offshore, and the government is taking decisive action to ensure this can no longer happen,' Economic Secretary to the Treasury Sajid Javid said. 'These reforms will ensure that remote-gambling operators who have UK customers make a fair contribution to the public finances.'" Continue reading →

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Voluntary Tax Disclosure Programs Correlated With U.S. Citizenship Renunciations

"'It’s quite clear from the data that the number of people renouncing their citizenship shoots up at the same time that the IRS began the Offshore Voluntary Disclosure Programs. Then, the number of people renouncing citizenship decreases at the same time that the Streamlined program is announced – which gives US citizens living abroad a less cumbersome way to catch up on back taxes, but then it shoots up again when the FATCA rules start to kick in and people find that the bank they have worked with for 20 years is closing their account because they are a US citizen' said David McKeegan of Greenback Expat Tax Services, a tax preparation company." Continue reading →

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Deloitte Rep. Warns China, Hong Kong To Sign FATCA Agreement

"'If the BVI and Caymans comply with the FATCA [Foreign Account Tax Compliance Act], this speaks volumes about the importance of this legislation to the world at large, let alone China and Hong Kong,' said Patrick Yip, deputy national mergers and acquisitions leader at Deloitte Touche Tohmatsu. 'China and Hong Kong financial firms that think by putting assets and income into BVI and Cayman companies they can avoid the reach of FATCA, they need to think again.' Although a US law, FATCA applies worldwide to every financial institution that receives payments from US sources. The mainland and Hong Kong should sign the agreements with the US to soothe their worries, he urged." Continue reading →

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Swiss Offshore-Adviser’s Guilty Plea Marks a Shift in Tax Crackdown

"On Aug. 16, Edgar Paltzer, 57 years old, a Swiss lawyer formerly with the Zurich firm of Niederer, Kraft & Frey, pleaded guilty in federal court in New York to a single count of conspiracy. Experts say Mr. Paltzer is the most prominent Swiss adviser to confess and the first to do so publicly. More than 30 advisers have been indicted in connection with allegedly enabling U.S. taxpayers to hide money abroad. The case puts further pressure on U.S. taxpayers holding secret offshore accounts, because advisers might opt to protect themselves by turning in their clients. The case also expands government scrutiny to assets stored in bank vaults." Continue reading →

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“When Will They Learn?”

"In a conservative administration, a government will institute greater social controls. In the following liberal administration, the government will institute greater economic controls. And the police state will be increased under both administrations. The net effect is overall increased dominance by government. Under the two-party system, this dominance is not only tolerated by the populace, but encouraged. The day never comes when a people convince their government to 'lighten up.' Relief only comes when an overly-powerful governmental system collapses under its own weight." Continue reading →

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The Worst Law Most Americans Have Never Heard Of

"While there is still an opportunity for you to avoid getting boxed in by a desperate and out-of-control government, nobody knows exactly how much time is left. And once official capital controls are implemented (#3), your wealth is trapped and things tend to unravel pretty quickly. Developing your internationalization game plan does not mean you have to leave your home country. It is possible to achieve a certain level of international diversification without needing to leave your living room, for example, by opening a foreign bank or brokerage account remotely. The idea is to create your own personal insurance policy to immunize yourself from the common destructive measures of a desperate government." Continue reading →

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