Fubarrio Expat Trader

IRS Steps Up Witch Hunt for Secret Offshore Bank Accounts

Oct. 15 (originally reported by Bloomberg) — The IRS is intensifying its hunt for secret offshore banking, opening offices in Beijing, Sydney and Panama City after more than 7,500 Americans revealed undeclared accounts in 70 countries on six continents.

Internal Revenue Commissioner said yesterday Americans scared into coming forward before today’s deadline, which was manufactured to create a ‘false urgency’ on behalf of the sheep, have revealed accounts ranging in value from $10,000 to more than $100 million. The partial amnesty won’t be extended, he said, however then mumbled something like ‘again’, and winked and nudged this reporter.

Americans with undeclared offshore accounts have been under growing pressure since the US began inundating the media with stories of ‘cracking down’. In addition, in August, Switzerland agreed to hand over as many as 4,450 UBS AG accounts, from people who “didn’t matter” to settle a lawsuit in which the U.S. had sought as many as 52,000 accounts. (It has been revealed by UBS sources close to the matter that the list of 4450 accounts includes primarily widows, dentists, and the deceased — no bankers executives of fortune 500 companies with political contribution funds or politicians themselves have been included in the list.)

IRS Commissioner Shulman continued, “We’re going to be scouring the 7,500 disclosures to identify financial institutions, advisers and others who helped these serfs….uh i mean ‘taxpayers’ act like corporations,” the Commssioner said during a propoganda call with reporters. “This entire effort is not just about UBS and a single country.”

It isn’t yet known how much overlap might exist between the 4,500 names that UBS will eventually provide and the 7,500 people who have come forward to the IRS, Shulman said. However, great care went into properly informing those “in the know” that they were safe.

As part of its efforts to defraud and bully the American public into ‘compliance’, the IRS also intends to hire more than 800 new thugs in the next year and add staff to eight existing overseas offices, including Hong Kong and Barbados. “After all,” the Commissioner continued, “we’ve got to extract money from expats as well as just citizens. You don’t think you escape the long arm of the IRS just by leaving the country’s confines. Oh no. You were born into tax-slavery, you die in tax-slavery.”

After a reporter on the call reminded Shulman that some did ‘earn’ their freeman status by becoming part of the publically traded corporate elite, the Commissioner softened his statement slightly. “Alright, for those 1% of you destined to live on the backs of the other 99%, of course. But I’m talking to the ‘masses’ here.”

Back ‘on message’, he continued, “We have seen a very strong response to the program and I am very pleased with the results,” Shulman said.

Taxpayers disclosed assets that came from inheritances, profits skimmed from U.S. businesses, and international business transactions, he said.

“Clearly, assets cannot move from one generation to the other, profits cannot be strategically placed in tax havens, and profits generated outside the shores of the U.S. cannot be left to accumulate tax-free. It clearly states in tax law that these ‘exceptions’ are only available to corporations, who the supreme court says can take on the characteristics of a living person — for purposes of contract law. You see, corporations could just up and move….people, you see, we have them by the shorthairs.”

U.S. lawmakers praised the IRS program and called for stronger laws to help the agency. “We’ve done such a great job of enforcing the laws we already have on the books to avoid fraud and limit the growth and scope of the Federal Reserve, what we really need are more laws,” said Senator Shumer in a press release in support of the IRS victory.

Senator Carl Levin, a Michigan Democrat whose Permanent Subcommittee on Investigations has held two hearings into how UBS solicited Americans to put assets in Swiss banks, said he’ll keep pushing legislation to give the IRS more tools. He said he plans to offer his proposal as an amendment to a health-care measure the Senate will debate later this year.

“Hell, if I can’t get more power to the IRS in a standalone bill, I’ll just sneak it into a 9000 page bill on ‘healthcare reform’. They’ll be so busy arguing over the actual bill, they’ll never even notice this little added ‘treasure’ at the end. And besides, who wouldn’t want to take care of the sick and the elderly? It’s ‘un-American’, ” Levin said.

Levin continued, “Luckily, many Americans are losing confidence in the ability of tax-haven banks to secure what’s rightfully theirs from the grasping claws of the government and frivilous lawsuits in an unjust legal system,” Levin said. “But it is also clear that thousands of other taxpayers are still in the shadows, working to secure what they’ve rightfully earned, and keep their offshore accounts hidden from the politicians and judges who know better how their wealth should be distributed.”

Montana Democrat Max Baucus, chairman of the Senate Finance Committee that oversees the IRS, is drafting his own legislation to double financial penalties on those who avoid taxes by moving money offshore.

‘A Start’

He called the 7,500 disclosures “a start” that demonstrates the IRS propoganda is working.

“With record deficits and a weakened economy, we owe it to politicians, and government employees (myself included) to set an aggressive agenda that puts an end to offshore tax avoidance once and for all,” Baucus said. “After all, I’m a public employee to, and if you kill of overly generous pay, benefits and pensions to lawmakers and public employees, I’d have to earn an honest living by adding value somewhere.”

Under the IRS program announced in March, the confiscation will take 20 percent of an account’s assets based on its peak value in the previous six years. Luckily, in many cases, these peak years include the heady year of 2006.

“We feel this program enables us to advertise that it’s only 20 percent, lure some suckers in, and then take about half of what’s remaining since the depress—er, i mean recession has halved most of these accounts from peak,” the Commissioner said.

Ordinarily, the IRS can seize the higher of $100,000 or 50 percent of an offshore account’s value when the holder deliberately doesn’t disclose the account to the Treasury Department. The penalty can apply each year that required forms aren’t filed, so after three years of noncompliance an account holder can owe 150 percent of the account’s value.

An IRS representative speaking on condition of anonymity said, “Hey, look, we rely on voluntary disclosure, hence all the propoganda and fear tactics…Regarding the 150 percent: well, clearly, you didn’t think you were allowed to work for your own benefit did you? Your life belongs to the state.”

Avoiding Prosecution

People who come forward voluntarily can avoid criminal prosecution and their identities will remain a secret under federal law requiring tax records to be kept confidential.

George Clarke, a tax lawyer at the Washington-based Miller & Chevalier firm, who is representing about 20 people seeking leniency in the program, said the IRS’s announcement indicates the agency is positioning itself to more efficiently hunt tax cheats.

“Look, in half these cases it’s some poor schmuck who’s worked his entire life for some assets and doesn’t want a cheating wife or frivilous lawsuit to drain him like an above ground pool,” he said. “If they agree to keep it on the hush hush and out of public light, the sheeple are more willing to line up and be sheered — If it’s just the IRS, they are less likely to lose their balls to a divorce settlement or ‘personal injury’ lawsuit. It’s a brilliant approach, really.”

Shulman said the IRS is building on the information it has received, and declined to estimate how much money the IRS will capture.

“You add this huge media and propoganda blitz up and it means equals voluntary disclosure and compliance for the vast majority of sheeple thinking about hiding assets offshore,” Shulman said. “If I had to justify this on captured assets alone, the revenue wouldn’t begin to approach the costs.”

He continued, “It’s like a prison. A few guards have to keep a lot of prisoners at bay through fear and intimidation. In the coming weeks and months, as tax receipts plummet and deficit spending soars into the teeth of a global collapse, the saber rattling by the IRS will become deafening.”

The voluntary disclosure program isn’t available to widows or dentists already under scrutiny by the IRS. Since December 2007, six UBS clients have pleaded guilty and a seventh has agreed to do so. A UBS banker pleaded guilty; two were indicted; and three Europeans were charged with enabling U.S. tax evasion.

The Justice Department has said 150 taxpayers, and no corporations, banks, charities, goldman sachs employees, or ‘religious institutions’ are under criminal investigation.

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