Fugitive Tax-Slaves

The Only Legal Way to Escape US Taxes Besides Death and Renunciation

"The US government can effectively enforce its citizenship-based taxation policies thanks to its massive economic, political, and military weight and the fact that it does not recognize any limit to its jurisdiction. American expats are therefore in the uniquely unfavorable position of having arguably the worst tax policies and a government that can effectively enforce them. It is no wonder, then, why a record number of Americans gave up their citizenship last quarter to escape these onerous requirements. There is, however, another way besides death and renunciation to legally escape US income taxes, thanks to the Caribbean island of Puerto Rico." Continue reading →

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FATCA and the End of Bank Secrecy

"It seems that there is little understanding that it was banking secrecy that helped to resist twentieth-century dictatorships and that high tax rates — not money havens — are responsible for tax evasion, as Prince Hans-Adam of Lichtenstein has pinpointed. Clearly the amount of information collected for the purpose of future tax investigation is enormous, leaving little place for human privacy and dignity." Continue reading →

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Cayman FATCA Agreement Makes It Tougher for Wealthy Americans to Hide Money

"The Cayman Islands, known as a haven for wealthy Americans seeking to stash cash overseas without scrutiny from the U.S. government, is about to become less secret. An agreement between the countries will put in place the Foreign Account Tax Compliance Act, or Fatca. The 2010 law makes it tougher to hide money overseas because foreign banks must report their accounts to the U.S. Internal Revenue Service or face, in some cases, a 30 percent withholding tax. The accord is significant because the Cayman Islands is a major financial center and home to operations for dozens of banks, funds and wealth-management entities." Continue reading →

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Overseas Americans: Time to Say ‘Bye’ to Uncle Sam?

"Here is a sign that life is getting complicated for U.S. taxpayers with assets abroad: More of them are deciding they are better off cutting official ties with America. Daniel Kuettel, a Colorado native who lives near Zurich, says he gave up his U.S. citizenship in October because he feared he wouldn't be able to get a mortgage now that some Swiss banks are cutting ties with American clients. 'It was a really difficult decision. I had to think about what was best for me and my family, to reduce the risk,' says Mr. Kuettel, a 41-year-old software developer. He says his income was below the limit the U.S. allows overseas taxpayers to exempt and he owed no U.S. taxes." Continue reading →

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Has your life been stolen from you by the IRS?

"This stupid witch hunt which people inside the U.S. think is going after the uber rich 'off shoring' in 'tax havens' has done more to harm low and middle income 'targets' than anything I’ve seen them do down there in a long time. The comment by President Obama last week that they are paying to fix their infrastructure by 'repatriating taxes' is a LIE, it’s NOT 'taxes' It is fines and fees and penalties on paperwork nobody ever heard of outside the U.S. for the most part and they know it. If it were taxes it would even come close to being enough, as according to American Citizens Abroad, 82% of expats would owe zero taxes." Continue reading →

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Will Europe pay the price for one-sided U.S. financial information demands?

"For example, under a law recently approved by the parliament of the United Kingdom (the first country to sign an IGA), HM Revenue & Customs commits explicitly to impose the American FATCA law on British institutions. The costs of regulatory implementation by HMRC would fall on British taxpayers. In turn, UK financial institutions (and their customers) would bear hundreds of millions of pounds in costs for collecting the information for transfer to the IRS. The direct revenue benefit to the Exchequer? Zero. What is the U.S. obligated to provide in return? Nothing, as it happens. The IGAs have no clear status in American law." Continue reading →

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The Devolution of Financial Privacy

"It’s been no secret that China views FATCA very unfavorably and negotiations towards compliance are going nowhere. It seems unlikely that the US would hit China with the 30% withholding tax for non-compliance. With China holding roughly $1.2 trillion in US Treasuries, it’s not as if it lacks its own leverage over the US government. This leaves the FATCA juggernaut stuck in a Sino-US standoff. It appears the US will have to either make serious concessions to win China over or back down on the 30% non-compliance tax. Should China stand its ground and not compromise on FATCA, it would punch a massive hole in global compliance." Continue reading →

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Goodbye Switzerland, Hello Bitcoins

"Given that the allure of bitcoins has been attributed by some to its status as an untraceable alternative to currencies issued by central authorities, there is little reason to assume that bitcoin market participants will honor their tax obligations as soon as the rules are explained more clearly. Thus, it is not surprising that the potential for bitcoins and other virtual currencies to replace offshore accounts as '[t]omorrow’s tax havens' has been the subject of scholarly analysis and commentary (here and here). It remains to be seen how the IRS will attack the use of bitcoins and other virtual currencies to evade income tax obligations." Continue reading →

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A congressional speech on the centennial of the Expatriation Act of 1868

"In 1868, men stood on the floor of the House and quoted philosophers from the Roman Republic, Germany, Switzerland, and the Netherlands in support of the proposition that emigration and change of citizenship are basic human rights. In 1968, men stood on that same floor and spluttered that Americans who emigrated and changed their citizenship were traitors who should never be allowed to return for a visit." Continue reading →

Continue ReadingA congressional speech on the centennial of the Expatriation Act of 1868

More Compelling Evidence that America’s Corporate Tax System Is Pointlessly Destructive

"One solution is to engage in a lot of clever tax planning to minimize your taxable income. Though that’s probably not a successful long-term strategy since the Obama Administration is supporting a plan by European politicians to create further disadvantages for American-based companies. Another option is to somehow turn yourself into a foreign corporation. You won’t be surprised to learn that politicians have imposed punitive anti-expatriation laws to make that difficult, but the crowd in Washington hasn’t figured out how to stop cross-border mergers and acquisitions." Continue reading →

Continue ReadingMore Compelling Evidence that America’s Corporate Tax System Is Pointlessly Destructive