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September 28, 2009 - Phil Hodgen

Amnesty report from the ABA Tax Section meeting

Here is Jack Townsend’s report of activity this weekend at the ABA Tax Section meeting.

Federal Tax Crimes: DOJ Tax’s Further Attempts to Drum Up Business / Revenue.

This short report confirms some thoughts I have been having.  I have worked in and watched this topic (offshore tax planning, trusts, banking, etc.) for 25 years.  Hunches follow:

  • Some prosecutors are having fun in their careers, maybe for the first time in years.
  • Some bureaucratic careers are being made.
  • Misleading statistics will be announced in Congressional hearings next year, with sad effect — you will see reports of broken arms caused by vigorous patting-of-self-on-the-back-for-job-well-done.  (Memo to all personnel – pass that health care reform bill now so these poor folks will be able to afford a visit to the orthopedist).

For the overall impact of the Voluntary Disclosure Program?  Check out the OECD statistics for tax compliance by individuals.  I have one word for the IRS:

Regression to the mean.

This program has accelerated the trend.

(Hint to non-readers of economic statistics.  USA has a higher rate of truth-telling for its taxpayers than other countries.  I’m saying specifically that the trendline for the USA and truthfulness of its taxpaying citizens will be in the downward-sloping direction.  And I’m willing to make a Long Bet on that.)

US Real Estate Investments Voluntary Disclosure