Secrecy as a tax strategy equals FAILFebruary 19, 2008 - Phil HodgenUS Real Estate Investments
Every so often I get people wandering into my office to talk about offshore trusts, estate planning, and saving tax. Some of them utter the following phrase, “Well, how would the government ever know that I have money offshore?”
I tell them that if they plan to lie about their taxes why should they spend a gob of money on legal fees? I tell them the cheapest tax shelter is to just lie. They just sort of look at me blankly or do a nervous giggle. Then they go away and I never hear from them again.
Yet another example of how secrecy fails
The latest warning is floating through the interwebs right now.
I came across it on my favorite website. It is the story of Bank Julius Baer, a disgruntled former employee, and a bunch of Southern California litigators who, well, let’s just say they seem to be pursuing the impossible.
The lawyers seem to be attempting to erase information from the internet, an action that triggers the Streisand Effect and is about as feasible as trying to take the pee out of the pool. I’m guessing that they see that now.
In the middle of this giant moronathon are a bunch of normal rich folks whose names are now spread all over the web. These are people just like our customers. (I refuse to use the word “client” because I think it smacks of lawyer ego, self-generated arrogance, and clubbiness. They are customers. We’re a business. Get over it.)
The 30 second overview
Here’s the Slashdot article about the whole mess. From here you can follow all sorts of links to information and documents. Read the comments, too. The comments are the reason Slashdot is so much fun.
There’s a website, www.wikileaks.org, that acts as a whistleblower resource.
In early 2008 it received and posted a load of documents from a whistleblower and former employee of Bank Julius Baer. The story can be found at endless links in the Slashdot article, or here.
I don’t know (and I don’t care) about the details of the case. I don’t care who is right and who is wrong. The point I want to make is directed to the kind of people that I work with.
That’s my point.
The Bank’s customers have their names splayed all over creation via the interwebs. It was trivial for me to download the documents from one of the hundreds of mirror sites that have this information. I looked at it. Hey! It’s fun! You can do it too.
Does Bank Julius Baer deserve the accusations thrown at it? I don’t know. I don’t care. The only thing to take away from this little escapade is that there may be confidentiality, but there is no secrecy.
Ask not for whom the whistleblower leaks. He leaks for you.
Life is too short to convert a money problem (paying taxes) into a jail problem.