While poking around the interwebs looking for the source of Richard Westin’s quote, I came across this:
The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.
Anatole France, The Red Lily, 1894, chapter 7. [French novelist (1844 - 1924)].
The parallel to Lawrence Douglas Shulman’s application of the FBAR law could not be more apparent. Multimillionaire tax evaders and immigrant grandmothers of modest means are both treated with exquisite fairness by the Constitution Avenue posse.
Larry Douglas Shulman’s intentions are two-fold:
- be Congress’s Golden Boy by collecting a lot of money from any source possible; and
- show US taxpayers that hiding money abroad is a mug’s game.
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Doug or Larry whatever his first name is this week failed to mention the following in his NPR interview:
- 4000 names from UBS is a drop in the bucket and the remainder of “names” will transfer their money into future non-FATCA banks – he’s had his one time up at bat. Once bitten twice shy as the saying goes from the point of view of the customers…
Also he didn’t mention that Switzerland will probably become less cooperative unofficially than more. The Swiss will smile and be pleasant and say they are trying their best, but will put into place actions making the IRS’ job harder. The question in the future will be how much information have we obtained from Switzerland more or less?- Forget to comment on the letter addressed to himself from the EU this week about the need to make changes to FATCA, the phrase “US residents” was used. Does this mean the commission is only going to exchange information with the IRS for persons with US addresses? So EU residents who are US / dual citizens will not be included to avoid breaking EU privacy laws? Let’s face it is any EU country going to start changing privacy laws to appease the IRS – not a vote winner. A little of American bashing in Europe will go a long way to make people take notice, particularly if you position it in a way that “anyone” could get caught out by IRS reporting.
- Any revenue collected from “offshore” is a drop in the bucket vs US budget deficit. Larry talks about billions being raised, but he doesn’t mention $80B is only 5% of $1.5T. He also doesn’t mention the overall low rates of compliance. Doug said 15,000 brave souls came forward (for the Monty Python treatment), but the potential was 2.8M taxpayers abroad or 5.3%. He also failed to mention about 85% of those 15000 produce ZERO tax revenue. So Doug how much of the $80B is lost in administration, and the potential lost revenue when FATCA becomes law? You may get greater report compliance, but the dollars won’t be there. I’m afraid many US citizens abroad will “opt-out” by going to non-FATCA banks considering your kind offer of big penalties. More so there will be declining compliance because you can’t control non-FATCA banks, most people would stick it in a mattress before paying IRS penalties.
Doug although it’s not technically your job to advise Congress on how to raise tax, but to enforce the current law please tell Congress to enact a 3.75% Federal Sales Tax, it would raise about $235B (no tax on food or clothes) and reduce the deficit by 16% overnight. A 5% Federal Sales tax would knock off 20%. And the best news it’s easy to collect – no offices in London or Paris, and excellent powers of collection – you got available to you the IRS’ favorite – liens.
What the US also needs is a greater Federal Gas tax to make gas $7-8 a gallon to encourage smaller vehicles instead of filling oil tankers with $ bills for their voyage back to Saudi. Together with an increase Federal Gas tax, and Federal Sales tax, the US budget deficit would be lowered by 25% very quickly.
Why keep chasing people abroad, with much lower rates of success, when the answer clearly is domestic taxation?
What Doug is trying to say is that he’ll max-out the existing tax law regardless of the actual net tax take or the problems it may cause. Only a federal agency could run like this not a private company???
- Accepts GE and others pay nothing because they exploit tax loopholes, but forgot to mention the little old lady penalized up to the rate of 50% on her life savings while forced to play a shell game with the IRS to reduces penalties because she probably has assets in the US.
****IDEA of the Month*****
- Doug why don’t you agree to do a live Q&A session with a Swiss Worldradio (or better yet hold a roadshow in person in London, Paris, and Zurich) and take questions from real US citizens abroad? If you have all the answers I’m sure you could convince them why they should agree to this IRS madness?
World Radio Switzerland contact details are as follows: +41 840 44 88 88 or studio@worldradio.ch (in case you haven’t dialed abroad before try 011-41-840-448888 and wait for the strange ring tone until someone picks up).
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Oops you’re right. Shulman is a Doug. Saturday morning and posts from an iPhone. Mistakes were made.
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Phil
Have you thought of posting a link to your FBAR amnesty form on your blog ? There may be new readers of your site who are not aware of that forum.
Thanks
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I meant forum, not form. Yeesh.
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A spokesman for a Cayman bank made a valid point – there are 250,000 FFIs in the world, and the US winges it loses $10B a year in unpaid taxes, it would be cheaper and less hassle for each FFI pay $40,000 each a year and be done with it!
Doug – Please read the suggestion above if you’re looking for cost effective solutions. You’re still trying to crack a nut with a sledgehammer.
It’s still hard to believe that one of the co-sponsors of FATCA is Rep Charles Rangel who was recently investigated for not disclosing income and assets – wrong man wrong job.
See this interview he did with NPR. http://www.npr.org/2011/04/15/135428521/irs-commissioner-wants-to-streamline-tax-process
I think Mr. Shulman has decided that bankrupting a few thousand immigrants and Americans living abroad is worth it, pour encourager les autres.