Offshore Asset Protection BLOG - Bob Bauman

Presidential Assassinations of U.S. Citizens

2010-02-04T17:41:15-05:00

Last week, Glen Greenwald of Salon.com wrote about a shocking revelation buried in a Washington Post article by Dana Priest which described how the Obama administration has adopted the Bush policy of targeting selected American citizens for assassination if they are deemed by the President to be "terrorists"

As The Washington Times' Eli Lake reports, Adm. Dennis Blair was asked about this program at a Congressional hearing Tuesday and he acknowledged its existence:

The U.S. intelligence community policy on killing American citizens who have joined al Qaeda requires first obtaining high-level government approval, a senior official disclosed to Congress on Wednesday.Director of National Intelligence Dennis C. Blair said in each case a decision to use lethal force against a U.S. citizen must get special permission. . . .He also said there are criteria that must be met to authorize the killing of a U.S. citizen that include "whether that American is involved in a group that is trying to attack us, whether that American is a threat to other Americans. Those are the factors involved."

Although Blair emphasized that it requires "special permission" before an American citizen can be placed on the assassination list, consider from whom that "permission" is obtained: President Obama, or someone else under his authority within the Executive Branch. There are no outside checks or limits at all on how these "factors" are weighed.

I don't know about you, but it disturbs me greatly that this, or any president, has the absolute power to target and order American citizens assassinated -- with no judicial oversight.

Greenwald writes: "It would be perverse in the extreme, but wouldn't it be preferable to at least require the President to demonstrate to a court that probable cause exists to warrant the assassination of an American citizen before the President should be allowed to order it? That would basically mean that courts would issue "assassination warrants" or "murder warrants" -- a repugnant idea given that they're tantamount to imposing the death sentence without a trial -- but isn't that minimal safeguard preferable to allowing the President unchecked authority to do it on his own, the very power he has now claimed for himself? And if the Fifth Amendment's explicit guarantee -- that one shall not be deprived of life without due process -- does not prohibit the U.S. Government from assassinating you without any process, what exactly does it prohibit?"

I urge you to follow the web links (above) to Greenwald's articles, then consider the implications of the Bush-Obama assassination policy he describes.

The Obama administration -- like the Bush administration before it -- defines the "battlefield" as the entire world. So the President claims the power to order U.S. citizens killed anywhere in the world, while engaged even in the most benign activities carried out far away from any actual battlefield, based solely on his say-so and with no judicial oversight or other checks. That's quite a power for an American President to claim for himself.

In an age when "terrorist" can be so losely defined in secret by faceless government, one might ask which U.S. citizen is next on the hit list?

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The Passport Book

If you are interested in obtaining dual citizenship and the second passport that comes with that enhanced status, you can learn about every aspect of what is required in the latest 2009 edition of my book, The Passport Book.

The Passport Book is one of our most popular publications, also lists almost 100 countries and explains the residence and citizenship requirements of each, along with contacts.

The Sovereign Society also provides its members contact information for qualified professionals who can assist you in acquiring second citizenship based on naturalization, ancestry, marriage, religion, or even past political persecution by some nations -- and they do it the legal way.

Unusual Feature of Obama Tax Enforcement Plans?

2010-02-03T16:35:27-05:00

Why on earth would the Criminal Investigation Division of the U.S. Internal Revenue Service need sixty 12 gauge pump-action shotguns?

(Don't answer that question, because I don't really want to know).

I raise this question, (and it is not rhetorical), because our intrepid A-Letter editor, Matt Collins, has sent me a public "solicitation" just issued by the IRS, in which our tax collectors seek bids for providing them the following impressive armaments:

The Internal Revenue Service (IRS) intends to purchase sixty Remington Model 870 Police RAMAC #24587 12 gauge pump-action shotguns for the Criminal Investigation Division. The Remington parkerized shotguns, with fourteen inch barrel, modified choke, Wilson Combat Ghost Ring rear sight and XS4 Contour Bead front sight, Knoxx Reduced Recoil Adjustable Stock, and Speedfeed ribbed black forend, are designated as the only shotguns authorized for IRS duty based on compatibility with IRS existing shotgun inventory, certified armorer and combat training and protocol, maintenance, and parts.

Protest Politics?

Now perhaps the IRS knows something about the Tea Party Movement that has escaped most of us.

Or maybe they have seen the polls showing the breadth and depth of American pubic reaction against President Obama's historic trillions in planned deficits and spending -- or those trillions in new income, capital gains and estate taxes on just about everything and everybody.

Or might these weapons be used to ensure that every last American is forced to buy ObamaCare health insurance?

But then, this may simply be a defensive measure against the ira of the millions of Americans whose constitutional right to bank and invest offshore may be seriously curtailed by the President and his Reid-Pelosi congressional radicals -- (not that such knowledgeable offshore Americans would ever stoop to the IRS level when its comes to coercion).

The Home Office

The 60 shotguns are to be delivered to the IRS national headquarters at 1111 Constitution Avenue NW, Washington DC 20224. We’ll keep an eye out to see of they’re building battlements and a moat or mounting canon.

But, all things considered, don’t you wonder if only 60 shotguns will be sufficient for the IRS? (Just kidding, officer!)

Swiss Say Germans Shot Own Foot

2010-02-03T11:51:10-05:00

As a supplement to my comments yesterday (see below) here is a partial report from Swissinfo.com by reporter, Matthew Allen.

Two years ago, Germany paid a substantial sum for illegally obtained information from a Liechtenstein bank. The move netted some high profile tax evaders and forced a concession from Liechtenstein to amend its ways in future.

But Switzerland should not back down quite so easily, according to Arturo Bris, a professor of finance, law and economics at Lausanne’s IMD international business school.

Bris believes that Germany has "shot itself in the foot" after arguing for so long that Switzerland’s banking system encouraged criminal activity. By conspiring with criminals itself, Germany has now lost the validity of its argument and could be successfully challenged by Switzerland in its own courts, according to Bris.
Swiss Finance Minister Hans-Rudolf Merz and Merkel.

Thanks to the comments by [German] Chancellor Merkel, the situation looks brighter in Switzerland than it did two weeks ago," he told swissinfo.ch. " I do not see any advantage in this illegal act which will surely backfire on Germany.

"Switzerland should remain strong and put more effort into explaining that the problem lies not with its secrecy laws, but with criminals in other countries. The failure lies with other countries failing to prosecute criminals inside their own borders," he added.

Red-handed and Red-faced

Putting the latest German incident into isolation, Bris may have a valid argument. But Switzerland is fighting attacks against its system of banking secrecy from all sides.

Last year, Switzerland was forced to renegotiate a host of double taxation treaties with other countries to remove itself from an OECD "grey list" of uncooperative tax havens.

The Swiss government then had to strike a deal with the United States to hand over information on thousands of UBS clients after the bank was caught red-handed in a tax evasion probe. A Swiss court ruling that at least part of the deal was illegal may leave a red-faced government having to go back to the US authorities asking to re-negotiate.

Encouraging Bank Robbers

If Germany goes ahead with its threat to use the stolen Swiss data to hunt down its own tax evaders, it could create a lucrative market for other disaffected bank staff to follow suit in the hope of legal protection and a windfall pay day.

Swiss banks already operate very tight levels of security to protect client data, according to John Ederer, Deputy Head of Forensic - a unit that advises companies on white collar crime risks - at KPMG Switzerland.

Security Strategy

Undoubtedly the rules of the game have changed in the last few years and people are becoming more aggressive. Technology is constantly updating, but it is very often the most basic controls that prove the most effective," he told swissinfo.ch.

For example, banks routinely segregate different aspects of client information into separate servers and carefully restrict access while monitoring staff activities. Staff are also restricted on what they can print and the use of USB memory sticks is routinely forbidden.

Human Element

However, any security system is only as strong as its weakest link, according to Ederer.

"The principle weakness of any environment is the human element. If you have one rotten apple in a barrel full of perfect apples, that could compromise the whole system," he said.

"The strongest human element controls are a positive ethical environment, effective training, codes of conduct, good direction from senior management and leading by example."

You can learn all about "going offshore" with your retirement plans and about legitimate and legal offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.

Official Criminal & Immoral "Bank Robbery"

2010-02-02T20:35:49-05:00

Billions of dollars, euros and pounds sterling are expended every day to fight criminals who hack into bank and other financial computers, ripping off hundreds of thousands of credit card and account holders. Billions more are spent for police vigilance against armed robbers of banks and individuals.

Thus it is more than a little ironic that government officials are happily joining this crime wave.

Bank robbery by national tax collectors is now an international epidemic led by Germany’s Teutonic Tax Collectors and involving France, Switzerland, Liechtenstein, the Netherlands and sundry other once sovereign countries, with the U.S. IRS as a willing accomplice.

It appears that a new official policy holds that it is acceptable for governments of major welfare-socialist nations to engage in criminal acts of bribery, receiving stolen property and violations of privacy laws -- if those officials decide that their criminal acts may lead to collecting taxes that they desperately need to finance their profligant spending.

This novel theory of vigilante lawlessness allows these tax collectors to act as prosecutor, jury and judge -- with bribed criminal thieves providing tainted stolen evidence.

Criminal Bribery

Exhibit A: In Zurich yesterday a Swiss lawmaker likened current official German attempts to buy stolen Swiss data on alleged cross border tax evaders to "bank robbery." The Swiss Bankers Association accused the Berlin government of acting as "a receiver of stolen goods."

The harsh words followed German officials saying they will pay for data on about 1500 German clients of Swiss banks being offered to authorities by a self-appointed whistle blower, even though the information has been stolen. This unidentified individual has offered to sell Germany the information in exchange for a bribe of a cool €2.5 million (US$3.49 million). (In unmarked bills?)

"In principle, the decision has been made," a German official said, adding the legal basis (if any?) was similar to a case in 2008 when Germany paid for client data stolen from Liechtenstein's leading LGT Bank. The only "legal basis" then, as now, was official German bank robbery.

Liechtenstein Loot

As usual, the leading justification for the immorality of official criminal bribery is the alleged potential tax take.

German media, which estimated authorities obtained around 200 million euros (US$558 million) in tax revenues in 2008 when Germany bought the stolen LGT data, (instead of the billion euros predicted at the time), are saying the latest stolen Swiss data on 1500 possible tax evaders could yield 100 million euros (US$279 million). (Don't hold your breath!)

In that notorious LGT Bank instance, in March 2008, the German secret police agency, the Federal Intelligence Service (BND), (the equivalent of the U.S. Central Intelligence Agency), paid a €5 million (US$7.3 million), bribe to a disgruntled employee with a criminal record who worked at LGT Bank in Liechtenstein.

The German government, then as now, seems to assume as a matter of policy that every German who has a Swiss account is engaged in tax evasion.

French Connection

"Here we have a new form of bank robbery," Swiss lawmaker Pirmin Bischof told Germany's Deutschlandfunk radio. "Before, you had to go to the bank and get hold of the money with a weapon. Today you can do it electronically by stealing data. This should not be allowed in a country based on the rule of law," Bischof added.

Not to be outdone by the German tax collectors, French tax authorities are combing stolen account holder information it acquired recently from an employee of HSBC Holdings private bank in Geneva. It was reported variously that the data came from HSBC’s private bank, from UBS accounts, and from Credit Suisse.

"This is a kind of business war against Switzerland in which practices which were completely illegal have become acceptable," says Daniel Fischer, founder of Zurich-based Fischer & Partner law firm who specializes in banking law and fraud. "It’s a huge danger for Swiss banks." And for innocent account holders, we might add.

First Pressure, Then Bribery & Theft

Germany and France, having pressured Switzerland and other nations into accepting more liberal tax information exchange rules last year, apparently also believe in stealing information as well.

Their willingness to pay for stolen data is upping tensions with France and Germany even as Switzerland negotiates treaties implementing cooperation with international tax probes under Article 26 of the OECD model banking code.

In reaction to this continuing bank robbery, the Swiss government said it will draft a law barring official cooperation with foreign countries in tax cases involving theft of Swiss client details.

And Threats of Extinction

Of course the most notorious instance of breaching Swiss bank secrecy was the U.S. IRS law suit against UBS.

The U.S. tax evading UBS, Switzerland's biggest wealth manager, settled with the U.S. in August 2008 by agreeing to share data on 4,450 clients. But that deal, considered crucial to UBS's business in the U.S., now is in question after a Swiss court ruled last month that most of the data cannot be released under Swiss law.

Legal Danish

In 2008, when Germany was engaged in bribery and receiving stolen names, most governments, including the United States, were happy to receive the stolen information in the case, but Denmark was a notable exception.

Its then tax minister, Kristian Jensen, described the Liechtenstein affair as an "advanced form of handling stolen goods". He added: "I think it's a moral problem to reward a criminal for information that he stole. I don't like this and I don't think this ethically is the best way to ensure that taxes are paid correctly". A lone voice in the tax collecting wilderness.

We Oppose Tax Evasion

The Sovereign Society, I say yet again, is opposed to, and does not condone, tax evasion -- which is illegal -- but we do support legal tax avoidance. If you care to know more about our stand on paying taxes, click here.

We also are strong believers in the fundamental human right to personal and financial privacy.

We staunchly oppose any totalitarian government officials who arrogate unto themselves the right to presume millions of people guilty of any crime, let alone tax evasion, simply because they have a bank account in the world's leading offshore financial center, Switzerland.

Shadow of German History

Let your mind wander back in history to the dark year 1934.

It was then that Switzerland's parliament codified its bank secrecy policy into law. That courageous act was a direct response to thwart Nazi German officials that were trying to bribe Swiss banks to get the names of Jews and other Germans with Swiss bank accounts.

Those German ancestors of Berlin's current tax hungry politicians were driven by irrational hatred of selected people. In their righteous fury the Nazis claimed the absolute right to confiscate property without trial or due process.

How different is the current German government and its bank and stolen property bribes? While the Nazi motivation was far different, the tactics are the same -- and in both cases those tactics are not only criminal, but immoral.

It is time that Swiss politicians remember their national history -- and fight to defend their sovereignty, rather than just worry about their banker friends.

We Are Prepared

We at the Sovereign Society saw this coming a long time ago…

We meet regularly with Swiss and other offshore bankers, and have agreements with reputable Swiss banks willing to accept accounts from those who identify themselves as Sovereign Society members.

These arrangements are in full compliance with IRS and SEC rules and other U.S. laws. U.S. clients must sign an IRS Form W-9 that allows an offshore bank to report required information to the IRS.

As it has been since our founding 12 years ago, our staff is available to assist in opening a Swiss or other offshore account. Take advantage of these special Swiss banking arrangements and the advice of our Swiss advisors by visiting our Member’s Only web site today.

We believe that in all this debate about bank robbery and bribes, basic issues remain -- preservation of personal freedom and liberty, versus complete government control of our lives and our fortunes.

Must Read: Obama's IRS Attack Plans on Offshore Freedoms

2010-02-01T16:30:14-05:00

My colleague, Mark Nestmann, consistently provides our Sovereign Society members and his readers with valuable tax and privacy information. I just read a highly informative blog entry Mark wrote entitled: "DOJ/IRS: We're Just Getting Started in Offshore Crackdown"

Mark just returned from a conference in San Antonio sponsored by the American Bar Association's Section on Taxation, of which he is a member.

He gives the inside facts about plans the U.S. Department of Justice (DOJ) and the IRS have to expand their radical anti-offshore vendetta -- and how offshore banks and financial institutions and the nations affected are likely to react.

Mark attended briefings in which high level DOJ and IRS officials participated including Victor Song, Deputy Chief of the IRS Criminal Investigation Division and Jeffrey A. Neiman, Assistant U.S. Attorney for the Southern District of Florida.

You Ain’t Seen Nothing Yet

The bottom line, Mark says, is that these influential individuals believe that what we and the offshore world suffered during 2009 -- the UBS affair, the capitulation of Switzerland and other offshore centers, dozens of new tax information exchange agreements -- is only the beginning if Obama’s officials have their way.

I urge you to review Mark's San Antonio report and to adjust your financial activities to meet these new challenges within the requirements of the law. As always, Mark and I will keep you informed as events occur.

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You can learn all about "going offshore" personally and financially, about legitimate and legal offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.

Tax, Spend -- but Elect?

2010-02-01T12:58:18-05:00

President Franklin D. Roosevelt's trusted advisor Harry Hopkins, (together below) the Administrator of the Works Progress Administration (WPA), a key agency of Roosevelt's New Deal, was the author of the notoriously cynical statement: "We will spend and spend, and tax and tax, and elect and elect."

The quote appeared first in a 1938 New York Times report by veteran political reporter, Arthur Krock. It has since become the campaign credo of generations of leftist Democrats-- Barack Obama included.

The slogan embodies an economic-political theory of raising the tax burden on the middle and upper income Americans so that politicians can spend more on socialist government programs that they think will produce mass votes for them.

It could be considered as a corollary to Obama's inadvertent "Joe the Plumber" moment of truth about "spreading the wealth around."

New Deal or Raw Deal?

Today President Obama, true to his New Deal antecedents, proposed a $3.8 trillion budget for fiscal 2011 that will add to the bloated size and scope of the federal government. His plan includes big increases in personal and business taxes, only modest, cosmetic spending cuts and still more spending for stimulus and bailouts.

I have previously commented on the fact that the U.S. government is already bankrupt and now the new Obama budget projects the largest annual deficit in U.S. history -- $1.6 trillion.

The Obama budget calls for nearly $1 trillion in tax increases on upper and middle income families, largely by allowing Bush tax cuts to expire. In all, the president's budget would add $8.5 trillion to the federal debt through 2020, pushing the debt as a dangerous percentage of GDP to 77% from 53%.

Kenneth Rogoff, a Harvard University economist who has studied other countries' experiences, says that level could push the U.S. toward an economic collapse where interest rates could soar, the value of the dollar could plunge further and the economy could face another major crisis. "We will hit a point where it comes on us very quickly, and you don't want to edge up to that point," Mr. Rogoff said. "Going beyond 80%, you're taking a real chance."

I suspect that most Americans have little or no concept of a "trillion" dollars. (It used to be a "billion" was thought of as a monstrous amount).

To help you understand just how enormous a trillion is, I turned to Vernon K. Jacobs CPA, (below) a leading expert in offshore tax matters and a long time associate of the Sovereign Society.

How Much Is a Trillion? - Vernon K. Jacobs

With all the news and talk about taxes and deficits and such, I’d thought I’d share a few statistical perspectives with you – just for fun and cocktail conversations.

It’s hard enough to comprehend a million let alone a billion, but a trillion is almost beyond comprehension.

To put the number in some perspective, there are approximately 300 million people in the U.S. as of July, 2007, according to the World Fact Book. A billion is 1,000 million, which means that a billion dollars is equal to about $3 per person in the U.S. and $1 trillion is equal to about $3,300 for every person in the U.S. Since there are about 100 million households, $1 trillion represents about $10,000 per household and $2.7 trillion is about $27,000 per household. That’s clearly more than the total income for a lot of households.

Based on an analysis of the 2007 federal budget, it appears that this budget total does include Social Security and Medicare tax collections, which represents about 1/3 of the total. Another 1/3 is from corporate income taxes and various excise taxes, with a little over 1/3 from personal income taxes. So that means that the average household would be paying about $9,000 of income taxes.

According to the National Taxpayer’s Union, the taxpayers in the top 50% (as measured by adjusted gross income) paid 97% of the individual personal income taxes in 2005. This means that about 50 million households paid nearly all of the personal income taxes. That works out to an average of about $18,000 of income taxes per household in the top half of the income category – which is in addition to their share of the payroll taxes and other taxes.

If we were to assume that the payroll taxes for Social Security and Medicare and the other taxes were shared equally, that would amount to about $18,000 per household. ($1.8 trillion / 100 million households).

And the top half of the income earners would also pay an extra $18,000 per household for income taxes. But 60% of the income taxes are paid by the top 5% of income earners, which means that $600 billion of income taxes is being paid by about 5 million households. That works out to about $120,000 per household for those in the top 5% of income earners.

And some politicians still are saying that the “rich” aren’t paying enough taxes!

As Fox Business News' John Stossel likes to say, "Gimmie a break"!

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Demagoguery, Lies & Video Tape

2010-01-31T19:32:55-05:00

At last Wednesday night's State of the Union address, TV cameras cut to a reaction shot showing six U.S. Supreme Court justices in the House Chamber audience, as President Barack Obama launched an unprecedented attacked on the Court.

In a remarkable personal attack on the Court in the presence of justices, Obama openly criticized the Citizen United v. FEC case, a Jan. 21st decision that struck down limits on corporate political campaign spending. The president falsely claimed that the Court reversed a "century worth" of opinion on the subject by allowing such funding. In truth, there have been very few rulings on the subject until recent years and most of those were without precedence.

First Amendment Free Speech Victory

In the Citzens United case the court held, 5-4, that the First Amendment guarantee of free speech extends to corporations and unions and had been unconstitutionally restricted by the McCain-Feingold Act. (For an excellent defense of the court's ruling by a self-described liberal who believes in unfettered free speech, click here).

Barack Obama is a highly intelligent, Harvard-educated attorney and former professor of Constitutional law at the University of Chicago Law School. He, of all people, certainly should have read and understood the Citizens United ruling. Instead he chose to distort the ruling for his own political purposes.
The president deliberately engaged in blatant demagoguery when he claimed that the decision "open[ed] the floodgates for special interests -- including foreign corporations -- to spend without limit in our elections. Well I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities."

Oath to Uphold the Laws

Surely the president knows, or should have known, that federal law prohibits such contributions, and the Court's ruling did nothing to change that law.

The law, 2 U.S.C. Section 441e, defines "foreign nationals" specifically including foreign corporations, and prohibits them from making "a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State or local election." This law was not at issue in the case.

Foreign corporations are also prohibited, under 2 U.S.C. 441e, from making any contribution or donation to any committee of any political party, and they prohibited from making any "expenditure, independent expenditure, or disbursement for an electioneering communication."

Indeed, That's Not True

Small wonder that after this presidential whopper, that TV cameras caught Justice Samuel Alito wincing, shaking his head and apparently mouthing "That's not true."

Justice Alito's reaction may have departed from the traditional expressionless, neutral pose the justices take when attending State of the Union events, but no one could ever recall a president distorting and attacking the court to its face in this or any other setting.

My guess is that Obama's tradition shattering, insulting and immature act was a crude part of his sudden political strategy to become a born-again populist in the wake of the election of a Republican U.S. senator by the irate voters of the Peoples Republic of Massachusetts.

But there is another even more telling aspect to the president's deliberate lies -- his own personal hypocrisy on the issue of foreign campaign contributions.

Foreign Contributions Skeleton in Obama Closet

A year ago, on July 25, 2008, I recounted Obama's close ties with one Robert Wolf, (below) president of UBS Investment Bank and chairman and CEO of UBS Group. The giant Swiss (foreign) bank even now is still under indictment for assisting an unknown number of Americans to evade millions in U.S. taxes.
UBS' Wolf was one of the President's leading fund raisers in the 2008 presidential race, "bundling" more then a half million dollars to Obama in possibly foreign campaign contributions. UBS was one of the top ten Obama corporate contributors.

In spite of his theatrical denunciation of ther Supreme Court last week, in 2008 Obama was more than happy to take millions from corporations, especially from Wall Street banks and the finance industry.

After saying he would accept public campaign funding, Obama later refused it and collecting about $18 million just from banks and securities firms, according to the Center for Responsive Politics’ campaign-finance Web site opensecrets.org.

Obama and the Wolf

Candidate Obama certainly wasn't so dramatically against foreign corporate contributions back then. Read here how Obama went out of his way to court UBS Wolf seeking donations from this foreign bank official.

Last summer Obama played five hours of friendly golf with the same Robert Wolf, who not only has been a guest in the White House, but in February 2009, was appointed by Obama to the White House’s Economic Recovery Advisory Board. Quid pro quo?

Untrue, Indeed

I know not whether Justice Alito mouthed the phrase "untrue" in response to the president's deliberate distortion of the case of Citizen United v. FEC, but "untrue" accurately describes the demagoguery that the president mouthed during his State of the Union address.

What the president did say reveals a great deal about the State of Barack Obama and his exceedingly loose allegiance to truth.

You can learn all about "going offshore" personally and financially and about legitimate and legal offshore financial centers in my just published 4th edition of Where to Stash Your Cash Legally: Offshore Financial Centers of the World. Find out how here.

Nodes in the News: "Smarter IRS" or IRS that Smarts?

2010-01-28T20:34:13-05:00

In remarks delivered to the New York State Bar Association Taxation Section, U.S. IRS Commissioner Douglas Shulman (below) said on Jan. 26 that “working smarter” is the operating theme of the IRS as it deals with the complexity of tax law, especially as it applies to what he described as "high wealth individuals and their related entities." (We're unsure if he meant spouses and children, but let that pass).

Especially tageting the wealthy and offshore financial actvity by Americans in general, Shulman says he has launched something he calls the "Global High Wealth Industry Group," (GHWIG) which he described as a “game-changing strategy” to centralize and focus its compliance expertise involving rich folks.

But what caught my gimlet eye was Shulman's plan for IRS efforts to combat offshore tax evasion by identifying what he called "points of leverage, also known as 'nodes' of activity," where multiple people not paying taxes can be detected. Financial institutions and promoters of tax evasion schemes are potential nodes of activity, he claims.

Tax Geek Speak Threat

Other than calling them "nodes" in a sort of tax geek speak, what on Earth is new about financial institutions being used by tax evaders? Crooks use banks don't they?

But Shulman went further into IRS Gestapo mode, with a not so veiled threat: "We are expanding our 'knock and talk' and other programs to visit thousands of [tax] preparers to discuss their operations and ways to reduce preparer error rates,” Shulman said.

So CPAs, especially those few who are qualified to advise on U.S. offshore taxes, better get ready for that jackbooted IRS agent's knock on your office door -- if they even bother to knock at all.

I have had a small soft spot in my heart for Mr. Shulman ever since he, in effect, called Senator Carl Levin (right) on his repeated lie that $100 billion was lost annually to offshore tax evasion by Americans.

IRS Fear Factor

But the Commissioner happily has carried on the traditional IRS fear campaign, of which his New York speech is the latest example.

One of the largest obstacles to many people considering going offshore financially is the fear factor to which the IRS constantly contributes.

I've often commented on the continuing IRS policy of engendering fear in the hearts and minds of taxpayers. Last August I noted that Columbia University law professor John Coffee, commenting on the U.S.- Swiss settlement of the UBS tax evasion scandal, said that in his opinion creating fear in U.S. taxpayers was always the goal of the negotiations between the Swiss and U.S. governments, that the court case brought in Miami against UBS was less about the bank than about instilling fear in all American taxpayers.

"The Internal Revenue Service was targeting American taxpayers who try to avoid paying tax," Coffee said. "The U.S. wants to scare and intimidate U.S. taxpayers into the voluntary disclosure program. It's all about a law enforcement strategy to intimidate people into voluntary disclosure."

Tax Profiling

I think we can conclude that Commissioner Shulman's latest announcement making "wealthy" Americans and their advisors special targets fits into this policy of fear -- even if this discriminatory policy ignores the equal protection of the laws guaranteed by the U.S. Constitution. He seems to believe that this sort of "tax profiling" of groups based on their level of income or net worth and their offshore activity is a an acceptable form of presumed guilt.

Consider for a moment what the reaction would be if a police chief announced a special task force to deal specifcally with crimes by African Americans or Latinos, because statistics show crime rates are higher in these groups. But it's OK to imply that all wealthy people with offshore business are tax cheats.

A few years ago congressional hearings on the IRS exposed publicly what many Americans knew already: the IRS too often conducts its affairs like a financial Gestapo, running roughshod over citizens rights.

One after another, witnesses offered proof of how ruthlessly the IRS had used its unbridled powers. This agency viewed all taxpayers as adversaries, assuming them guilty until they could prove otherwise. It snatched property, seized bank accounts and turned people out of their homes, often without regard to due process of law. Much of this activity was carried on in secret with little accountability.

Excrescence

Well, we don't support tax evasion, but we do support legal tax avoidance.

By the way, Commissioner's use of the word "node" is interesting for we lexicographers.

A node can be defined, as he used it, as "a centering point of component parts," but a node is also defined as "a knot, protuberance, or knob." In turn "protuberance" is defined as a "bulge, bump, or excrescence."

Commissioner Shulman better watch his words!

Will Obama Nationalize U.S. Private Pensions?

2010-01-27T21:55:43-05:00

That was the serious question I proposed one year ago in my blog -- and it is time to ask that question again.

That is because President Obama has proposed what one of our experts sees as the "first step in stealth nationalization and forced investment of our retirement benefits."

The bad news comes as part of a tax package said to be aimed at middle-income Americans in Obama’s State of the Union speech, as reported by Business Week magazine.

Obama’s stealth proposal is billed by him as an "effort to increase retirement savings by requiring all businesses to offer automatic IRA accounts, but it drew immediate opposition from U.S. small associations. Obama claims the plan would let employees automatically enroll in direct-deposit retirement accounts and expand matching tax credits.

Dangerous First Step to Nationalization

But Larry C. Grossman, CFP, CIMA, (below) managing director of Sovereign International Pension Services (no relation) and a member of our Sovereign Society Council of Experts, sees the Obama idea as a dangerous move.

Says he: "If you read it closely you will see the heart of the proposal is the requirement to keep 10% of the funds in U.S. Treasuries. At the stroke of a pen the president has found a way to bolster the declining demand for Treasuries. I believe forcing retirement plans into U.S. government control is the next step."

This alarm was echoed by Ron Holland, (below) editor of the Inner Circle Intelligence Report published by BFI Consulting AG, a Swiss financial advisory firm, and a long time member of the Sovereign Society Council of Experts.

Says Ron: "I think the mandatory IRAs just proposed by Obama is the first step in stealth nationalization and forced investment of our retirement benefits to support the U.S. Treasury debt market."

Major Worry

Should you be worried about this latest radical Obama move?

There is an estimated $15 trillion worth of private retirement plans in the United States; $4 million in IRAs alone; this constitutes 35% percent of all private assets in America. That is what the leftist controlled, tax-hungry Obama government is eyeing to help plug the multi-trillion dollar deficit in the president’s big spending budget.

You could call this move Obama’s attempt to "pull an Argentina."

In October 2008, Peronista president Cristina Kirchner of Argentina (right) confiscated US$30 billion worth in that country's ten privately managed pension funds. This was presented as an emergency measure to meet her faltering government's financing costs. The Argentine congress went along with this radical property grab of individual retirement accounts, 401Ks and the like.

Could This Happen in America?

Larry Grossman's opinion: "There have been several different academic papers published which have given rise to rumors. At least one congressional hearing on nationalizing pensions has been held. It is difficult to decide in what form it would take if something like this occurred in the U.S. Many believe if this is approaching, the best way to protect your assets is to place your retirement funds offshore now."

Ron Holland says: "I believe we must fight this proposal and similar plans or else the private retirement system and our retirement wealth will be history in a few short years." Ron has produced a special report on this radical grab entitled, "The Obama Retirement Trap Has Started!"

If you would like to review the entire report you can request the full report by sending an email request to ron.holland@bfi-consulting.com

Act Now

In my opinion, adopting such a retirement confiscation policy would be another major blow to Americans' confidence and to any chance of economic recovery; it would further devalue the dollar; and it would destroy what little remains of the credibility of Obama and his socialist government.

Folks, I served in the U.S. Congress when Democrats were overwhelmingly in control. I've seen what happens when the Republicans are in charge, as well. Meaning simply, anything can happen -- so hold on to your wallet -- and to your retirement account!

Move It Offshore

On certain solution that remains legally moving your IRS, 401k or other plan offshore. You can contact either Larry Grossman or Ron Holland for advice on how you can move your retirement fund offshore to safer places.

I Repeat: Beware of Passport Fraud

2010-01-26T21:32:27-05:00

If anyone follows my blog with any regularity, you know one of my repeat themes is "Beware of passport fraud". Indeed, I wrote about this very topic only two months ago.

Warnings of Fraud

At that time, I reported on a continuing South African passport scandal as an example to alert you to the possibility of passport fraud, should you be planning to acquire a second passport.

I return to this warning theme because in recent days I have encountered more examples of gullible people being defrauded in passport deals gone bad.

The Nigerian Lady

In one case, I was contacted by a person (not a Sovereign Society member), who had seen my Internet writings about passports.

This credulous U.S. citizen, hunting the web for a second passport and dual citizenship, made contact with what he described as "a women in Nigeria" who claimed she could provide (for a substantial fee) an official passport of an unnamed nation.

This gentleman was then surprised when, after wiring the fee, no passport was forthcoming, and (Surprise!) the Nigerian lady no longer responded to his e-mails.

He turned to me for advice on what he might do.

Of course I couldn't give him any help in locking the barn door once the proverbial horse had been stolen. I didn't say so, but how anyone could not know about the millions of dollars lost in the notorious Nigerian scams that have been going on for years, is beyond me. As they say, duh!

Legal in Every Respect

One of most important considerations when evaluating the usefulness of an alternative citizenship and a second passport is that it is legal in every respect.

That fact may seem obvious, but the proliferation of fly-by-night passport fraud operations, especially on the Internet, requires not only this reminder, but strict adherence to laws when making second passport plans and decisions.

Guatemalan Blues

Another instance of passports in the news: the Guatemalan government issued an official public protest after three Guatemalans were arrested this month by immigration agents at a Federal Express office in Florida, when one of the immigrants went to pick up a package containing his newly issued (and legal) Guatemalan passport.

Suspecting that the passport might be fraudulent, FedEx officials called U.S. Immigration and Customs Enforcement (ICE) agents to alert them when the Guatemalans arrived to collect the package. Two of the Guatemalans were illegal immigrants who have been deported, and one is in deportation proceedings.

Guatemalan diplomats said that Fed Ex and U.S. officials had examined and seized legitimate passports without notifying them and had improperly disrupted their dealings with Guatemalan citizens living in this country. Felipe Alejos, the Guatemalan consul in Miami, said the events appeared to violate basic diplomatic protocols.

Legal Passport, Illegal Aliens

Well, in this case the passports were legal, but the status of the recipients was illegal.

But I have received several inquiries about a provision in Guatemalan law that allows the government to grant citizenship and passports to "exceptional" foreign applicants who "contribute" to the country.

One person wrote me: "I have been in contact with a Panamanian law firm who tells me I can get a legitimate Guatemalan passport within two weeks along with a drivers license and cedulla and there is no need to invest two years in the country. Apparently some ministry in the country has the ability to give passports to individuals who are of exceptional merit and can be seen as an asset to that country."

The fee demanded was $50,000!

There is in fact a discretionary passport power allowed under Guatemalan law, but on its face these facts smacked of a possible kick back deal between the law firm and some corrupt government official. I warned my inquiring contact to avoid the deal and referred him instead to reliable attorneys in Panama that I know can be trusted.

Don't Take a Chance

When you spend a considerable sum of money to acquire a second citizenship, then use that document as your basis for personal international movement, you must be absolutely certain that the documents and your status are in strict accord with the constitution and laws of the issuing nation.

In this age of instant communication it takes only hours, certainly no more than a few days, before customs and immigration officials worldwide know when a passport is called into question and illegal passport holders can go straight to jail.

The Passport Book

The Passport Book
, one of our most popular publications, also lists almost 100 countries and explains the residence and citizenship requirements of each, along with contacts.