The Wealthy Weigh the Consequences: Come Clean, or Keep Offshore Accounts?
By Susie Madrak Tuesday Oct 13, 2009 6:00pm
How patriotic of these wealthy Americans, to hide their money offshore so it was available when their country finally needed it.
Not only did they get the tax code and every law slanted in their favor over the past 30 years, they've also earned more than ever. And yet, they still feel compelled to steal even more. What's wrong with these people?
Many Americans dread April 15, the deadline for filing their income tax returns. But some well-heeled people are trembling over another looming tax day: Oct. 15.
Thursday is the deadline for Americans to come clean about the money they have hidden offshore, in places like Swiss bank accounts. No one can say with certainty how much money is out there — the accounts are secret — but the hoard may be tens of billions of dollars.
Several thousand wealthy people have come forward, hoping to avoid large fines or possibly even prison. But many others are still weighing their options. The choice is stark: They can confess and pay the penalties, or gamble that they will not get caught. With the deadline only days away, tax lawyers say they are being inundated by anxious clients.
“We’re seeing a flood of people,” said Scott D. Michel, a tax lawyer in Washington. His firm, Caplin & Drysdale, has 350 clients who are preparing to report their offshore accounts to the Internal Revenue Service. The firm has 14 lawyers handling their cases, one of which involves a tax bill of hundreds of millions of dollars.
The deadline is part of a broad crackdown on Americans who use offshore accounts to evade federal taxes. As part of the effort, United States authorities have challenged the long tradition of banking secrecy in Switzerland, and, in particular at UBS, that nation’s largest bank.
The I.R.S. is offering tax dodgers some leniency. Penalties will be reduced for people who come forward by Oct. 15. They will be assessed fines equal to 5 to 20 percent of their tax bills, rather than the usual 50 percent. They also will pay that penalty once, based on the highest balance in their offshore accounts over the last six years, rather than for each of those six years.
At least 4,000 clients of UBS and other private banks have come forward in recent months, a government official who had been briefed on the matter said.
Login or Register to post comments.
Most of these, ah, douches, have already transferred their wealth into gold, which explains the steady rise in price as the dollar tanks.
..
Am I dreaming? This story doesn't fit with all the ones I've been reading lately. It's like not even from the United Corpo-States of Cash-merica, Land of the Men of Substance and their Millions of Serfs.
This doesn't fit with the freefall-faster-and-faster-until-we-hit-Hades-and-burn-completely-out world we've been living in since 2003. Something scwewy here.
Oh yeah, it's the only having to pay 5% to 20% part! That fits. That's to START, and then when it comes time to pay it, they just don't, and nothing happens to them, just like nothing happened to the war criminals. Now I'm back on the right page in history.
Carry on!
So much for that vaunted "personal responsibility" the Republicans are always going on about.
They think "personal responsibility" only applies to the first few million. After that anything goes!
"personal" to them means "other people's"
They take our personal money, they give us responsibility back in exchange.
They think it is a fair trade, and seeing the little amount of resistance, I don't blame them in their assessment.
.
It's only "Personal Responsibility" when the other guy does it.
.
Personal responsibility means continually saying the two words like you mean them, and paying for the wars you love but won't fight in with loans from the People's Republic of China, and passing that note down to your grandkids, and making a protest sign that reads, "Don't tax me! Not me! NOT MEEEE!!!"
It's having three 24-hour cable news channels that are guaranteed to never call you on the contradiction, or ask you a single embarrassing question about your own actual personal contribution to Personal Responsibility. Thanks to the free press today, personal responsibility on the Right means never having to say you're sorry.
Unless this story is the headliner at the Moon Pie blogs today. Is it?
They want to be able to put their initials next to the high score.
It worked for J.R. Ewing.
Ed and Roy take down MiniMe
http://www.huffingtonpost.com/huff-tv/huffpos...
I'm still waiting for a wealth tax to be instated, along with 90% marginal rates. Oh, and lets confiscate that 2 trillion idiot Bush stole from the rest of us and gave to the trust-funders.
that Rumsfeld mentions here are you??
As I recall, he had this press conference the day BEFORE 9/11...
"Oops....our bad."
http://www.youtube.com/watch?v=_rRqeJcuK-A&fe...
This is where our "health care" is going...
Straight down the MIC Rat Hole.
As I like to say...we've already paid for the best health care system on Earth....
They've just diverted the funds to the MIC.
Had enough yet?
There's an old saying in Tennessee - I know it's in Texas, probably in Tennessee - that says, fool me once, shame on - shame on you. Fool me - you can't get fooled again.
http://www.youtube.com/watch?v=eKgPY1adc0A
Did republicans forget already? Geez.
hahahahahaha
we're penalized for trying to be successful. i hate the bush/reagan republicans but i also believe in low taxes. actually i'd love to see the IRS eliminated. i don't know about you but i don't like working 4 months out of the year just to pay taxes that go to a bunch of lying, thieving republicans. get rid of income taxes or institute a consumption tax. if we simplify the tax code then people won't have to resort to such extremes measures to avoid paying taxes.
But then I like driving on roads, having schools for my kids, getting free health care, electricity, plumbing, clean water, trees out front, public parks, the planetarium, the museum, and so forth.
Nobody deserves to make more than 200K per year. As soon as my accounts hit 2M I'm done and off to live in Mexico.
Quite a few, including taxes on bank deposits.
I don't mind paying taxes to Mexico if it paves roads for me to drive on and hospitals for me to visit when the jellyfishes get me.
don't want to pay taxes. Or just pay a little, and expect to get a lot in return. Taxes do not equal bad. Taxes equal what you need to pay to keep your country great. You believe in paying little, then don't expect a lot. Now taxes being abused DOES equal bad, but with decades of Americans being uninvolved, even too lazy to vote-you get what you earn.
In places like Norway, taxes are high, but a higher standard of living is enjoyed by everyone. People here need to travel to find that out. Your libertarian bullshit is just that-bullshit.
there have been a bunch of studies on a consumption tax or a fair tax as some call it and from what I remember, the dollars just do not add up.
I like the premise of the idea, but the last one I remember seeing showed about a 30% shortfall as compared to the EXISTING code as it now stands.
I do not remember who published that. Sorry.
But, either way - you still have to work a number of days in the year to pay for your tax load. That doesn't change.
From all I have seen, the 90% tax paid by the ultra wealthy earlier in our history did not hurt their lifestyle and we used those tax dollars for some amazingly worthwhile projects.
Need to get back to somewhere closer to that progressive tax standard. It seems like the best way to ensure adequate funding especially with all the loopholes the ultra rich can still exploit even in that tax bracket.
Can we please stop using the word "earned" to describe the manner in which these fat bastards get their ill gotten gains?
"Earned" indicates that you had to do some thing of some value to someone (besides yourself") in order to get remunerated for it. Just sitting on your bulbous ass in some oak paneled Wall Street office siphoning off over half of every dollar that flows by you is NOT earning diddly squat, it's simply stealing it.
About the only thing we of the lower working classes have left to be proud of is that we work for and therefore EARN our meager paychecks so don't cheapen it by applying it to whatever these thieving lying bastards are doing.
My nominee for Best Comment on this subject. And may I add a quote in praise of the 'lower' working classes?
-- Abraham Lincoln --
but one that i will forever stand proud of , that is being lower class , you know people like a farmer , or any other trade/craft people .
I pity you wall streeters , the day will come when you come begging in your suits for food and will be shot on sight as vermin .
a phenomenally cogent point.
" They will be assessed fines equal to 5 to 20 percent of their tax bills, rather than the usual 50 percent. They also will pay that penalty once, based on the highest balance in their offshore accounts over the last six years, rather than for each of those six years."
But god forbid you're some working stiff who's into the IRS for a couple of grand; I guarantee you wouldn't get a deal like this.
There is a headline on Huffington Post entitled "Tax Dodger Crack Down Shelved by Obama Administration." But HP's website is so screwed up, (yeah, I said it) it never goes to the story. Is that true? If so, I'm pissed.
over on Huffington Post there is an article titled "Tax Dodger Crackdown Shelved By Obama Administration". So the great messiah has done it again and broken another campaign pledge to the suckers in favor of the well to do and corporate weenies. Ok now the Obama apologists can come out swinging. Lookout.
Sorry marcellajoy, didn't see you coming.
"Tax Dodger Crackdown Shelved By Obama Administration".
I know I'm awake now, it isn't the Ambien.
Those are some of the folks Grayson has been referring to: The rich bastards that could give less than a shit about the rest of the world.
to that story on Huffpo? I can't find it over there.
The link does not work. You can only view the headline on their home page. HP needs a new webmaster.
Right click, choose open in new window? I hate to make suggestions because I was born and raised in For Dummies Land.
http://www.huffingtonpost.com/2009/10/13/tax-...
...to hit DIGG.
The level of vitriol on this subject is just incredible, as is the level of misinformation.
Here's our attempt to set the record straight.
Many years ago my wife and I decided we would like to retire and live in France when we got to retirement age. Since we knew our US social security would not supply a living wage- not by half- we would have to work during retirement. But France expressly prohibits working by holders of the Carte Sejour- visitor's long term visa. What to do? We thought we might work on line. But we were told that if any payments were made to any French account that looked like income earned in France, in a job that might be held by a French person, the hammer falls, and your visa can be lost.
The solution we found was to open a corporate account with a Swiss bank . It cost us $800 to create a corporation in a totally legal manner.
Over the years, we would travel to Europe on cheap winter package deals, go by Geneva and deposit money saved from work at home. Not a lot-- as sailmakers, we didn't have a lot to deposit- but we wanted to keep the thing active, and learn to live in Europe, and that included doing bank things.
We did not declare the account, or pay taxes on it.
Why not?
First, we asked our tax guy in the US. His advice was to not mention the account, because having a foreign account was an automatic audit, a thoroughly unpleasant experience, but to pay the tax on any income, so in the future no one could accuse us of cheating- just of overlooking to mention it. This was many years ago, when the US was more confident of it's status as King of the World, and therefore less defensive- so penalties were far milder.
As to taxes, the account earned so little in interest that it would have made no difference whatever on our taxes anyway.
Years pass, my wife dies, I remarry. We have two children. I have an accident that costs me my legs. I Get a settlement from the insurance company of the guy that ran over me. I come to France for a superb prosthetics program that is simply not available in the US, and never leave, legally remaining on a Carte Sejour. In the wake of 9/11, the US government makes it incredibly difficult to do funds transfers out of any account in the US-- personal appearances are now required. Shit. In my wheelchair? I think, "Aha! We already have that ancient account, with a few dying tech stocks in it, and no cash. We can finally use it!"
----See it coming?
I deposit my settlement in the account, which now has enough money in it for us to live, frugally, for perhaps ten years.
Over five years, the account predictably declines in value to about half it's original value.
The UBS side of the story:
UBS gets greedy, and opens a bunch of branches in the US, laying themselves open to US pressure.
They have aggressively courted US customers, and are alleged to have offered corporate accounts and advice to customers on how to evade taxes. They never did any of this with us.
The plot thickens. The US wants the money from all those accounts of multi-billionaires who allegedly hang out at the UBS club. UBS says, piss off. So the pressure is ratcheted up. A couple high-level executives of UBS get jailed in Florida, and the US demands draconian action or UBS will lose their access to US accounts and money, and perhaps their executives will get to stay a while. Kidnapping? Ransom? Not if the Gov does it- only if a bunch of starving nobodies from some third-world pesthole do it.
We get a notice in the mail that our account data is among thousands UBS has sent along to the IRS--used to pay off the IRS, and get UBS out of the shit. Kiss, kiss. "Yass, massa, I done wrong. Nevah again, and here's my customers to eat as a token of submission."
Does this sound like the story you've read about in soo many places in the blog world and MSM?
Are there bad guys? Yes, I'm fairly sure there are many rich people who hid lots of money. I also suspect their names remain safe, for the most part, by whatever means that the really rich have to arrange such things.
But are there others like us who just got caught up in a game of economic imperialism typical of the US? Yes--lots more.
Was I a fool? Yes. I should have declared the account.
Did I cheat anybody? Hell no.
There's far more. The penalty I will pay is not based on unpaid taxes, as has been so often said incorrectly- I probably will have little to pay there- This is a punishment. Not for tax evasion, but just for NOT TELLING THEM ABOUT THE ACCOUNT. It's called an FBAR penalty. It's a straightforward bite, 20% of the account's PEAK value over the last six years. Sound--not so bad? Remember, these guys in the IRS are tasked with ---getting money, not being nice guys. They know most accounts have declined hugely in value from 2003 till 2008. That apparent 20% will be far greater in reality. The worse your brokerage hit, the more the IRS will take of whatever is left.
Since our account is in consistent decline due to our use of the money in daily living, to supplement the $1100 per month I get from SSA, (yes, all you Europeans, that's what I get as a disabled retiree in the Land of the Brave),I will likely lose almost all of the remains. Our lawyer says it could be worse--he's got a retired customer, 84, who got hit hard by the stock crash, and will lose all of what's left, and still owe a bundle.
This is not an appeal for sympathy, but a reaction to the level of hatred, and the incredible level of misinformation on the whole subject. It looks to me like theater- a straw man diversion - a convenient villain propped up to absorb the angst of both the right and left, in hard times.
I think, in a deeper sense, it's punishment for those who would take their money and lives, and go elsewhere.
It's the citizens who are viewed as property, and our departure is seen as theft---of ourselves.
Yeah, that makes sense. The rich will have scapegoats, and you fell into that pool. Shit. Good luck.
Nice cut and paste job.
I am nearly in tears thinking how unfair it is for these people with offshore accounts. WTF! The IRS wants them to pay TAXES on this money that they illegally hid? And, to add insult on injury, pay PENALTIES, too? Bring back the Chehey- Bush administration!
it just makes me all teary eyed and all .
pass the Grey Poupon.
I'd snark it as "Pass the snuff porn" or worse. Me so hyperbolic, though.
Or "Pass me my extra Viagra with my plane ticket to the Dominican Republic, where the sex trade offers what the sex trade here hasn't got." (Wonder what THAT could be?)
SIGH. Quit making me mad, you information found only on the internet.
To want them to pay at the very least their fair share.
and this will never see the light of day again.
I am now one of the voters for this president who will answer "no" when asked if I approve of the job he is doing.
All we are asking for in America is a level playing field on which to compete regardless of our income level.
Sadly, the status quo and perhaps the tipping toward more high end spenders is making htis pipe dream impossible.
4,000 clients and hundred of millions of dollars for just one of them. In other words, while all of us deal with stripped down services and higher taxes, these leeches have been living high on their crooked ways, abetted by the same tax lawyers who are now making deals for them.
Is this a great country or what?
the BBC in the UK has just informed the public at large that the great messiah, our Nobel Peace Prize Winner is sending 45,000 new troops to Afghanistan as a surge. This is 5,000 more than McChrystal asked for. Link to Raw Story and weep.
I heard here yesterday that he was sending 15K.
Hmmm?
Ya know what's really funny, I just went to the BBC news site, and this was all they had. UK To send 500 more troops.
Isn't that nice...? the wealthy feel as though they have an option to pay taxes or not.....I don't have enough money to choose an optional payment plan on my taxes....I have to help make up their tax shortfalls
They will be assessed fines equal to 5 to 20 percent of their tax bills, rather than the usual 50 percent. They also will pay that penalty once, based on the highest balance in their offshore accounts over the last six years, rather than for each of those six years.
Now WHY EXACTLY am I paying taxes every year like some schnook? Who said that crime doesn't pay? Apparently following the laws of this country is for suckers, and I just found out recently.
Login or Register to post comments.