Fugitive Tax-Slaves

Beauty Offshore: A Caribbean Passport For A Chinese Restaurateur

"When Zhang Lan decided last year to file for an IPO in Hong Kong for her restaurant group South Beauty, she reorganized her holdings under an entity in the Cayman Islands. However, she didn’t just move her company offshore. She did the same to herself, applying for fast-track citizenship in the Caribbean state of St. Kitts & Nevis (pop. 50,000) under an investment scheme. Three months later a passport was delivered to her office in Beijing. In June 2012 Zhang filed for a share offering in Hong Kong as the foreign principal of South Beauty Investment Co. Ltd., a Cayman-registered company that earns its revenues in mainland China." Continue reading →

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Will IRS Find Your Small Foreign Bank Account?

"FBAR penalties can be enormous, a civil penalty of $10,000 for each non-willful violation. If your violation is willful, the penalty is the greater of $100,000 or 50% of the amount in the account for each violation. Each year you didn’t file is a separate violation. Criminal penalties are even more frightening, including a fine of $250,000 and 5 years of imprisonment. If the FBAR violation occurs while violating another law (such as tax law, which it often will) the penalties are increased to $500,000 in fines and/or 10 years of imprisonment. Many violent felonies are punished less harshly." Continue reading →

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Currency Controls in Cyprus Increase Worry About Euro System

"On a visit to Athens this year, Marios Loucaides, a Cypriot businessman, saw an apartment he liked in the heart of the Greek capital and decided to buy it. However, Mr. Loucaides discovered that the euros he had on deposit here in Nicosia, the capital, could not be moved to Greece, even though the two countries share the same currency and, in theory at least, the same free movement of capital.The apartment deal collapsed. And so, too, did Mr. Loucaides’s belief that Europe has a common currency. Tangled in restrictions imposed in March as part of a bailout for the country’s ailing banks, a euro in Cyprus is no longer the same as one in France, Germany or Greece." Continue reading →

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Taxation of Americans Abroad versus the 14th Amendment

"The 'citizenship penalty' deserves consideration. Both US citizens abroad and non-resident aliens are non-residents of the U.S. The fact that the U.S. citizen pays higher taxes, because of U.S. citizenship, is arguably a violation of the 'equal protection' clause of the 14th amendment. Furthermore, the U.S. Supreme Court has ruled that 'citizenship classifications' are 'suspect classifications' and that they can be upheld only if the government can demonstrate a compelling state interest. Why should US citizens abroad pay a penalty because of their citizenship?" Continue reading →

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Bitcoins Soar In Value In Argentina Due To Capital Control Laws

"With the Peso undergoing yet another period of severe inflation at a rate of 20%, and now President Kirchner’s attempt to lure citizens back into the banking system over which they have absolutely no trust, by attempting to repatriate the US dollars held overseas or in hidden accounts by citizens in exchange for the domestic Cedin, the demand for Bitcoins has rocketed. Compared to Argentina’s much more freedom-orientated neighbor Uruguay, values of Bitcoins in Buenos Aires are between 30% and 40% higher than just 75 kilometers away in Colonia del Sacramento, Uruguay according to Argentinian Bitcoin expert Mauro Betschart." Continue reading →

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Who voted for the Reed Amendment in 1995 and 1996?

"The Reed Amendment — which bans people determined by the Attorney-General to have 'renounced citizenship for the purpose of avoiding taxation' — was an amendment to the Immigration in the National Interest Act of 1995. I was aware in a general sense that Republicans had taken back the House and the Senate in 1994, but I’d never really put two and two together until reading this list: Republicans formed a majority among the supporters of the Reed Amendment. Indeed, every single one of the Republican freshmen on the committee who joined the House as a result of the 1994 'Revolution' voted for Reed’s amendment." Continue reading →

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Why Sir John Templeton renounced US citizenship – AKA why the US shot itself in the foot

"The media is prone to depict Templeton as a tax cheat. The reason? Had he been a U.S. citizen when he died, the U.S. government would have received approximately 100 million in estate taxes. I am not aware of Templeton ever publicly stating his reasons for renouncing U.S. citizenship. Nobody knows for sure. But, I suspect that the correlation between his renouncing U.S. citizenship in 1964 and the enactment of the CFC (Controlled Foreign Corporation and SubPart F) rules in 1962 did play a role. The 1962 changes in the Internal Revenue Code meant that Templeton may have been forced to choose between U.S. citizenship and his mutual fund business." Continue reading →

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Is Actor Johnny Revilla Stateless?

"Actor Johnny Revilla, who starred in 'The Strangers', now sits as a representative of the Overseas Filipino Worker (OFW) Family Club in the Philippine House of Representatives, after taking oath on the 26th of June, 2014, could face up to seven years of imprisonment if he is a U.S. citizen. Documentation obtained from the Philippine Bureau of Immigration shows that he travelled using an American passport from 2002 up to 2009. According to OFW Family Club Rep. Roy Seneres of OFW, the former Philippine Ambassador to the United Arab Emirates, Johnny cannot be a citizen of the Philippines if he is a citizen of America. Yet, such is not the case." Continue reading →

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Before Sir John Marks Templeton, there was Cleveland Ferguson

"A few years before Templeton made his famous move to the Bahamas, another American went and made a name for himself by discussing his desire to give up his citizenship and resettle on that famous island of warm breezes and low taxes. Meet Mr. Cleveland Ferguson, Bahamian immigrant and disabled Korean War veteran. If Mr. Ferguson had been able to afford his day in court, he might have won early recognition of the fact finally recognised by a court in 2010: that no formal declaration of war is necessary to allow renunciations under that provision (now renumbered to § 349(a)(6)), as long as there exist hostilities." Continue reading →

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US – Sri Lankans “Asked” to Register with their Banks — What if they don’t do so voluntarily?

"This newspaper notice was placed in a Sri Lankan newspaper last month by the Sri Lanka Banker’s Association, requesting the voluntary ‘registration’ of U.S. Persons with their banks to facilitate the identification of U.S. Persons under FATCA. The voluntary registration was, apparently, not required by the Sri Lanka Central Bank, and Sri Lanka has not (yet) publicly signed an IGA or waived Sri Lankan banking secrecy to allow banks to directly enter into agreements with the IRS. Certainly, the notice for voluntarily registering oneself harkens back to 1939 for some of us, and exemplifies the positive discrimination that FATCA requires." Continue reading →

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