Offshore Asset Protection BLOG - Bob Bauman

Offshore Freedom

2009-11-05T23:26:13-05:00

Cabo San Lucas, Baja California Sur, Mexico: That's from whence I am reporting today, the second day of the four day Sovereign Society Offshore Advantage Seminar at the Westin Resort & Spa (below).

Located at the southern very tip of Mexico's Baja Peninsula, our resort hotel enjoys a dramatic site at Land's End, high above where the Sea of Cortes meets the Pacific Ocean. Looking out over the blue-green ocean in the late afternoon we have seen huge whales leisurely swimming along with schools of dolphins as escorts. Deep sea fishing is a major sport here.

Los Cabos, as it is known, is unique in its impressive desert landscapes of pinks, reds and browns, its very dry climate, with endless cactus plants framed by cinnamon colored mountains, and bordered by miles of white sandy beach and clear, deep azure waters.

If I sound as if I am an impressed tourist, that's because I am. I have visited other Mexican resorts, Cancun, Puerto Vallarta and Acapulco, but Los Cabos exceeds them all in beauty and unspoiled grandeur.

So much for the location.

Here for Business

There are over four hundred people attending our seminar, including 330 attendees, plus professional speakers and staff. During four days the attendees learn from experts about every aspect of offshore activities -- banking, trusts, family foundations, foreign residence and second passports, investing, currencies and asset protection -- as well as how to comply with U.S. offshore tax and reporting laws.

While many of the attendees are U.S. persons, there are people here from as far away as Switzerland, Denmark, Germany, the Isle of Man, Panama, New Zealand, Australia, Hong Kong, Canada, Austria and many other nations.

Unusual Zeal

Professionals in attendance, attorneys, investment managers, bankers, foreign citizenship advisors -- all have remarked on the palpable air of concern and determination shown by all the attendees. I have seen and heard it in many conversations I have had.

These good people share my fear about what is happening to the United States -- Obama's march to socialized medicine, the ignoring of the Constitution by Congress and the executive, the piling up of trillions in deficit spending -- and these people are determined, for safety's sake, to place some of their assets offshore, if not themselves.

Unparalleled Concern

In the more than 10 years of the existence of the Sovereign Society I have never before seen people at our meetings as determined as these folks are to follow a course of action toward financial and personal safety -- and they mean to act now.

Yesterday the chairman of the Sovereign Society, Jack Pugsley, (left) and I both delivered addresses describing the perilous state of America and the world. Believe me the people here understand the threats to, not just their wealth, but more importantly, to their freedom and the futures of their children and grandchildren.

We made clear once again that we believe that…

Individual liberty is a prerequisite to prosperity.
Liberty exists when every individual has the right to keep, control and dispose of his or her justly-acquired property.
Individuals and their assets are not the property of government.

You Can See & Hear It All

Now, in the past we've made audio recordings available for a fee. But this year, we're doing something completely different.
The management has decided to give you the valuable content of this seminar in Los Cabos FREE… not just for the 2009 Academy - but for every future event we hold.

I have summed up the details in this attached letter. Give it a look. That way, if you're interested, you can get a video/audio copy of all that occurs here at Los Cabos soon after the conclusion of the Offshore Advantage Academy.

World’s Best Tax Haven Is In America, but Unavailable to Americans

2009-11-02T11:47:09-05:00

Our guest columnist today is our friend Daniel J. Mitchell of the Cato Institute, (below) who also will be the keynote speaker later this week at the Sovereign Society Third Annual Offshore Advantage Seminar, at the Westin, Los Cabos, Mexico. Dan writes:

Tax competition is an issue that arouses passion on both sides of the debate. Libertarians and other free-market advocates welcome tax competition as a way of restraining the greed of politicians.

Governments have lowered tax rates in recent decades, for instance, because politicians are afraid that the geese that lay the golden eggs can fly across the border. But collectivists despise tax competition — for exactly the same reason. They want investors, entrepreneurs, and companies to passively serve as free vending machines, dispensing never-ending piles of money for politicians.

So when a left-wing group puts together a ranking of the world’s “top secrecy jurisdictions” in hopes of undermining tax competition, proponents of individual freedom can use that list as a guide to world’s most investor-friendly nations.

The good news is that an American state, Delaware, is number one on the list. And since being a tax haven is a magnet for investment, this is good news for U.S. competitiveness. The bad news is that American taxpayers are not allowed to benefit from many of Delaware’s “tax haven” policies. Here’s what a left-wing columnist in the United Kingdom wrote about the issue:

You’re a billionaire but you don’t want anyone, least of all the taxman, to know. What do you do? Head for a palm-fringed island paradise or a snow-covered Alpine micro-state? Wrong.

The world’s most opaque jurisdictions – the ones that will best shield you and your cash from the light – are mostly in the heart of the most sophisticated and powerful global financial centres. London, Luxembourg and Zurich are in the top five most secretive jurisdictions, according the first comprehensive index of financial transparency ever compiled.

Yet top of the pile, beating the British Virgin Islands, Belize or Liechtenstein as the best place to hide wealth, is Delaware. One of the smallest states in the US, it offers the best protection for anyone who does not want to disclose their identity as a beneficial owner of a company. That is one very good reason why the East Coast state hosts 50% of the US’s quoted firms and 650,000 companies – almost equivalent to one company per Delaware resident. …

Delaware – the political power-base of the US vice-president, Joe Biden – offers high levels of banking secrecy and does not make details of trusts, company accounts and beneficial ownership a matter of public record. Delaware also allows companies to re-domicile within its borders with minimal disclosure, and allows the existence of privacy-enhancing “protected cell” or “segregated portfolio” companies, among many other stratagems useful for protecting the identity of those who do business there.

PS: You can read my comments about Delaware as a tax haven here.

The Passport Book - 7th Edition

If you want you want to discover a new, freedom loving place in which to pitch your tent, deposit your cash or protect your assets, the seventh edition of my best-selling publication, The Passport Book, is now available. You can get your copy now . Here's a sample of the contents.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

Obama, Democrats Radical Plan to Curb Offshore Freedoms

2009-10-30T14:06:13-04:00

As is well known, for several years offshore tax havens and Americans who dare to exercise their right to engage in legal offshore financial activity, have been under continuing attack by left wing, redistributionist Democrats, including then senator, now President Barack Obama.

Now, with Obama's personal blessing, congressional Democrats have introduced a radical legislative proposal that would give the U.S. Internal Revenue Service (IRS) new weapons to "detect, deter and discourage" the use of foreign bank and other financial accounts that might be used for avoiding U.S. taxes.

The questionable basis for this latest leftist assault on Americans' personal and financial privacy is the unproven allegation that millions of Americans are evading billions of dollars in taxes by hiding cash and activities offshore.

I have commented on these phony numbers games before. These repeated charges amount to what Josef Goebbles called "the Big Lie".

FACTA

The Foreign Account Tax Compliance Act, (FACTA)introduced in The U.S. Senate and House on October 27, blends proposals in President Obama’s 2010 budget, as well as Senator Carl Levin's (D-Mich) infamous"Stop Tax Haven Abuse Act" and legislation drafted by Senate Finance Committee chairman Max Baucus (D-MT) earlier this year.

It is co-sponsored by Sen. Baucus (D-MT) and the tax-dodging House Ways and Means Committee Chairman, Charlie "I forgot" Rangel (D-NY), (left).

Under this extremely punitive bill, all foreign financial institutions, banks, foreign trusts, private foundations and foreign corporations could be forced into providing information about U.S. account holders, trust grantors, and American owners associated with these legal entities.

As if they did not exist, the legislation totally ignores the current extensive reporting requirements of federal law that already apply to all such entities.

Go After The Rich

This week IRS Commissioner Doug Shulman also announced a stepped up campaign against high net worth individuals he thinks are engaged in interna (below) tional tax evasion. "We will take a unified look at the entire web of business entities controlled by a high wealth individual," Shulman said "The IRS high wealth unit will focus on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals."

The U.S. government served subpoenas on wealthy individuals in recent days in the New York area, targeting those who may have evaded taxes using offshore accounts at Swiss bank UBS.

30% Tax on Offshore Banks

If enacted the FACTA would impose a 30% withholding tax on payments to foreign financial institutions and other entities unless they acknowledge the existence of offshore accounts to the IRS and disclose relevant information including account ownership, balances and amounts moving in and out of the accounts.

With its usual guess work, the Congressional Budget Office (CBO) claims the legislation would bring in an additional $8.5 billion in taxes over a 10-year period, (a far cry from the supposed $100 billion a year Levin repeatedly claims is lost to alleged offshore tax evasion).

Obama All for It

In a canned statement from the White House President Obama, who during his campaign said he favored "spreading around" other Americans wealth, said: "The legislation introduced today would put a stop to billions of dollars worth of abuses. I look forward to working with Congress to turn these proposals into law so that honest Americans no longer shoulder the burden of the few individuals and businesses that put profit before responsibility."

If you want to dig into the gory details of the new proposal, you find the text of the bill here and its technical description here. They both make freightening reading.

Peeved Levin Reacts

This slightly less radical legislation does not have the endorsement of Capitol Hill's leading anti-tax haven demagogue, Sen. Carl Levin (D-MI), (below) who said he doesn't think the bill goes far enough.

That may be because it omits the ridiculous blacklist of scores of nations included in Levin's Anti-Tax Haven Act, as well as many punitive anti-tax haven powers his bill would have given to Treasury Secretary Timothy Geithner. The tax dodging hypocrite Geithner, who failed to pay taxes for several years until he was named to his post, praised the bill.

The die-hard Levin told reporters: "When their committees move to markup, I hope to work with my colleagues to strengthen the Baucus-Rangel bill by adding some of the measures from the offshore tax bill I’ve introduced."

Offshore Reaction

As a result of numerous anti-offshore policies of the IRS and the Obama administration, as well as the UBS bank scandal, many Swiss and other offshore banks have closed existing accounts of Americans and have turned away new U.S. applicants.

Switzerland's oldest bank, Bank Wegelin in Saint Gallen, was typical in not only confirming its "no Americans" policy, but in announcing it would not longer invest in American investments for itself or its clients.

Another Freedom Destroyed

One can only guess what may be the reaction of offshore bankers to the threat of a 30% tax to force release of client information that would clearly violate Swiss bank secrecy laws, as well as financial privacy laws in many other countries such as Panama, Austria, Singapore and Hong Kong.

If this bill becomes law, it may well block the ability of all Americans to bank offshore, simply because no offshore bank will put up with these unprecedented bullying tactics by the IRS. There are plenty of other people of wealth whose governments do not think they can impose their rule on the entire world.

Stay tuned for developments.

The Passport Book - 7th Edition

If you want you want to discover a new, freedom loving place in which to pitch your tent, deposit your cash or protect your assets, the seventh edition of my best-selling publication, The Passport Book, is now available. You can get your copy now . Here's a sample of the contents.

The Sovereign Society is a recognized voice in the complex offshore world. Join the Sovereign Society and keep informed.

British Labor Declares Financial War on U.K. Offshore Havens

2009-10-27T22:25:19-04:00

Wallowing in trillions of pounds sterling of government debt, suffering an unprecedented recession prolonged by its leftist policies, with banks propped up by £1.2 trillion (US$1.7 trillion) in bailouts taken from angry taxpayers, the British Labour Party, now in its political death throws, has decided to destroy the United Kingdom's offshore financial centers.

In doing some hope that it may precipitate a constitutional crisis the gravity of which has not been since the abdication of Edward VIII in 1936.

Keep in mind that Jersey, Guernsey and the Isle of Man are not part of the UK but are self-governing dependencies of the Crown. This means they have their own directly elected legislative assemblies, administrative, fiscal and legal systems and their own courts of law. The Crown Dependencies are not represented in the UK Parliament and UK legislation does not extend to them.

Brown's Tax Haven Ploy

Earlier this month I gave you a detailed account of the shabby treatment the Labour government has accorded the U.K. offshore financial centers, even though these centers have led the way in offshore financial reforms well before the current OECD blacklisting attacks.

In the midst of the worst British recession in 30 years, faltering Prime Minister Gordon Brown (left) has been demanding “the end of tax havens,” demagogically blaming them for the global economic downturn which had its root causes in the City of London, in Wall Street and elsewhere.

Chancellor of the Exchequer, Alistair Darling, (below) announced a review of the Crown dependencies and overseas territories in his pre-budget report last year, three weeks after he made disturbing comments to a Treasury select committee about the Isle of Man being little more than a “tax haven sitting in the Irish Sea”.

No to the Cayman Islands

The anti-Manx action appears to be part of a larger plan of actin aimed against all U.K. offshore financial centers.

A few weeks ago the Labour government refused to assist the Cayman Islands, a British overseas territory (read colony), with a budget shortfall, in effect ordering the islands to sink or swim on their own financially. In the past London under both political parties has accepted a duty to support its colonial possessions in times of need. The Foreign Office refused the Cayman Islands permission to raise a £280m (US$459m) loan until it has levied new taxes.

Attack on the Isle of Man

Now comes Mr. Darling and announces that, without any negotiations, and with only 30 days notice, the Labour government is cutting the annual budget of the Crown dependency of the Isle of Man by 24%, causing what Manx leaders call an “unprecedented” financial crisis.

British observers saw this as one of Gordon Brown's harshest ways to deal with the Isle of Man's status as a "tax haven" and they said it has the potential to change life for the worse on the island in the future.

London slashed £140 million (US$229.5 m) off the tax haven’s £572 million (US$938 m) annual budget. And they did so unilaterally. The sudden cut eventualy could amount to about half the total Manx government budget. It also ended an existing Health Care Agreement that provided services to the island's people.

The island’s chief minister, Tony Brown, (left) told Tynwald, the Manx parliament, that the deal imposed by the UK was non-negotiable. Mr Brown added: “This situation is clearly extremely serious for the island and unprecedented."

Violation of 400 Year Old Treaty

This appears to be in violation of a 400-year-old customs revenue-sharing agreement between the Isle of Man and the UK. The annual payments by the UK are not a subsidy, but revenue sharing based on a formula that pays back some of the British VAT collected on the island. Locals claim that in the past the island has received less than it pays in VAT, and that certainly will be the case now.

Left-wing British anti-tax haven groups cheered Labour's abrupt action and claimed it would put an end to what they claimed, without proof, is massive tax evasion on the Isle of Man.

Credit Rating at Issue

Having suddenly lost 24% of its planned revenues, the credit rating company Moody's has placed the island’s credit rating under review. The current Triple-A status may be downgraded because of the 24% reduction. This could have a significant effect on life on the island and ultimately impact upon its status as a leading tax haven.

Banking, high caliber legal, accounting, insurance and other financial services are available on the island. In spite of their ancient history, banking on the offshore islands is modern, sophisticated and user-friendly. Total deposits in the 47 banks in the Isle of Man banking system in 2009 exceeded £98 billion (US$156.5 billion).

Good Record

Only recently I wrote an article here extolling the superior status of the Isle of Man and its management as an offshore financial center.

I noted that the island's free market approach had reaped rewards. The island has enjoyed 26 consecutive years of growth. It has no national debt, an unemployment rate of just 2.2% cent, and has avoided the global recession. Per capita income 24% lower than Britain’s in 1996, is 18% higher now at about $35,000.

What Brown is trying to destroy is a well-regulated and universally recognized high quality offshore center for financial services.

History

The Isle of Man came under English control in the 14th century. During this period the Isle was dominated by the Stanley family, who also held the title of Earl of Derby, who had been given possession of Man by King Henry IV. In 1703 the Act of Settlement secured peasant rights and marked the beginning of a move away from feudal government.

In 1765 the British Crown secured greater control over the island paying a price of £70,000 without incorporating it into Great Britain, laying the basis for the island's status as a Crown dependency. In 1866 greater autonomy was restored to the island's parliament and a full transition to democracy began.

The Isle quickly developed as a finance center and tourist destination, becoming increasingly prosperous during the 20th century.

The Future

Perhaps the Isle of Man may wish to assert its constitutional independence in the face of this blatant violation of a 400 year old treaty -- especially since the Labour government has made clear its hostile intention to destroy the island's major source of income.

Then too both the Isle of Man and the UK may be saved by the ascendency of a Conservative Party government in the 2010 elections. Labour is now trailing in all the polls.

Obama as Bad as Bush-Cheney

2009-10-26T21:46:27-04:00

That was the headline on a column by Nat Hentoff, (below) a senior fellow at the Cato Instutute and a principled person whom I consider to be one the foremost civil libertarians in America today.

Sen. Russ Feingold, (D-Wis), the only U.S. senator who had the courage to vote against the PATRIOT Act when it was first adopted in 2001, has been battling the Federal Bureau of Investigation's expanded surveillance guidelines. He also has continued to fight to revise the unconstitutional PATRIOT Act, parts of which are now up for renewal in the U.S. Congress.

In the recent U.S. Senate Judiciary Committee review of the Act, Republicans senators protecting the Act, in a closed-door session, formed an odd alliance working with Obama administration officials on amendments blocking any major changes.

Then all but three Democrats, pressured by the Obama administration officials, voted for a watered-down "compromise" bill by Senators Patrick Leahy and Diane Feinstein. Feingold, Dick Durbin, D-Ill., and newly minted "Democrat" Arlen Specter (Pa.) had the courage to oppose the committee bill that with few exceptions, leaves the Act intact without any meaningful revisions.

Two Faced Obama

Obama, who as a candidate repeatedly attacked the PATRIOT Act and called for its revision in order to protect civil liberties now has abandoned that stance -- as he has so many of his glittering promises of change.

Instead Obama, a former professor of constitutional law, working with so-called "conservative" Republicans, thwarted attempts by Feingold to restore the constitutional civil liberties Bush's PATRIOT Act destroyed.

"In the end," Feingold says. "Democrats have to decide if they are going to stand up for the rights of the American people" or "allow the FBI to write our laws."

Policeman, Prosecutor, Judge & Jury

Hentoff quotes my former House colleague, Don Edwards (D-Ca). "No federal agency," said Congressman Edwards, "the CIA, the IRS, or the FBI, can be at the same time policeman, prosecutor, judge and jury. That is what constitutionally guaranteed due process is all about. It may sometimes be disorderly and unsatisfactory to some, but it is the essence of freedom."

The Constitution, Edwards continued, does not permit "federal interference" with Americans' speech or associations, and other such citizen constitutional rights, "except through the criminal justice system, armed with its ancient safeguards." Read that as meaning the PATRIOT Act.

A Solemn Oath

Apparently the Senate Republicans are not concerned about redressing the constitutional violations contained in the PATRIOT Act, a law that is the worst legislative attack on the Constitution since President John Adams and the 1789 Alien and Sedition Laws.

When I was 15-years-old, I swore my first Oath to support and defend the United States Constitution when I served as a young page boy in the House of Representatives. Later, as a Member of Congress (a Republican and a conservative), I took that same oath to uphold the Constitution, to which every congressman and senator currently serving has also supposedly sworn their allegiance.

To Hell with the Constitution?

So knowing that, how can we explain the U.S. Congress continuing to support an unconstitutional law, the PATRIOT Act, that virtually repeals the guarantees against unreasonable search and seizure in the Fourth Amendment of the Bill of Rights?

My answer: fear. It's not justified fear of "terrorism " -- but cowardly fear of not politicians not getting reelected! Politics rules, to Hell with the U.S. Constitution!

The PATRIOT Act Report

In this special 44 page report I wrote (and just revised for the third time, Sept. 2009), you learn all about the PATRIOT Act and its far-reaching invasion of your rights -- and what you can do to defend yourself.

Plus, you'll automatically receive a FREE subscription to the world’s most popular offshore e-letter, The Sovereign Society Offshore A-Letter. With more than 230,000 readers world wide, The A-Letter keeps you in touch with global events and investments that affect your wealth and safety. Learn more here.

No Way Out -- or an Exit Strategy?

2009-10-25T21:56:36-04:00

I travel a lot on airplanes, notwithstanding the fact that the very first time I flew, (on an Eastern Airlines DC-3 in 1947) the plane crash landed. (I've written about that interesting experience of my youth before).

I always ask for an exit row seat when I fly, if I can get one, and not just for the extra leg room. If I can't get an exit row, I make sure to notice where the exits are and listen to the now familiar instructions of the staff or the video.

Similarly, from time to time you read about the horrendous loss of life in nightclub fires when exits are locked, or insufficient to allow egress in an emergency. On November 28th 1942, a huge fire occurred at the Coconut Grove Night Club in Boston. 492 people perished because the only exit was one revolving door. In 2003 one hundred people died and 230 were injured in a Warwick, Rhode Island nightclub fire because of lack of exits.

Plan Ahead

Perhaps I am being overly dramatic, but I personally believe the current situation in the United States, politically and economically, is as serious as it has been at any time since the Japanese attack on Pearl Harbor on December 7, 1941.

So serious that reasonable people now should be considering what they might do if things become so dire that an escape from America becomes necessary.

Frankly, in all my years I never thought I would reach the point that I would counsel people on how to move their assets and their selves away from what I still consider to be one of the greatest nations on earth.

But the America I knew as a teenage page in the U.S. House of Representatives and later as member of that body, has changed -- and not for the better.

Foresight

The Sovereign Society was founded by patriotic Americans and citizens of other nations who, more than a decade ago, recognized the growing trend against individual liberty for the very real threat that it was and is. Since then our membership has grown considerably.

I believe much of that growth is attributable to the fact that we offer not only a philosophy of freedom, but concrete plans that can be followed, both now and should implementing an exit strategy become necessary. That day may be closer at hand than we want to admit.

I have traveled all over the world, met thousands of people concerned about their family's future and the ability to avoid stultify taxes and government controls. They often ask: "What can I do?"

Join Me in Los Cabos

That's why I suggest to you that you should be at the Third Annual Offshore Advantage Seminar, a Beginner’s Guide to the Offshore World, November 4, 2009 – November 7, 2009 at the Westin, Los Cabos, Mexico.

There you will find the answers to your questions, as well as that exit strategy.

I'll be there, along our executive director, Erika Nolan, and many professional members of our Council of Experts from all across the offshore world. Attendance already is the largest we have ever had and I can guarantee, along with the valuable education, you'll have a great social time as well.

Where else could you confer, one on one, with so many leading offshore experts?

You'll come away with not just an "exit strategy" but with a whole new understanding of the many possibilities that exist in offshore banking, asset protection, investing and tax deferral.

I hope to see you there. As they say, "Come on down."

All the best and in the name of personal freedom,

Kill All the Lawyers -- or Do It Yourself

2009-10-24T21:47:22-04:00

"The first thing we do," says Dick the Butcher, a character in Shakespeare's Henry VI, part 2 is "kill all the lawyers."

Most people are familiar with that phrase, one of the original lawyer jokes, so to speak. Rueful, mocking, this quote often expresses the ordinary person's frustration with the arcana and complexity of law -- and with the chicanery of too many lawyers.

Will Shakespeare must have had a lot of legal troubles himself.

He used lawyers as figures of derision on several occasions. In Romeo and Juliet, Mercutio uses the line "O'er lawyers' fingers, who straight dream on fees." In King Lear, the fool defends a speech in riddles by comparing it to the gobbledygook of an "unfee'd lawyer."

I must confess a possible conflict of interest or two on the subject of lawyers.

I graduated from the Georgetown University Law Center in 1964 and have been a member of the bar for 44 years. One of my daughters, Eugenie Marie Eardley, also a GU Law grad ('91), is a successful and widely known plaintiff's trial lawyer in Grand Rapids, Michigan.

Billions for MedMal?

What brought this to mind was an issue raised as part of the debate over national health care legislation now raging in the U.S. Congress. Conservatives have argued that one major way to reduce medical costs is to curb unreasonable lawsuits based on alleged medial malpractice.

Lawrence J. McQuillan is director of business and economic studies at the Pacific Research Institute and coauthor of "The Facts about Medical Malpractice Liability Costs" and "Tort Law Tally."

Earlier this month, the Congressional Budget Office (CBO) said medical-liability reforms could save about $11 billion annually.

McQuillan claims this assessment is "a gross underestimate of the potential benefits of reform and was intended to give cover to congressional Democrats who say malpractice-liability costs are trifling." He says that "a full accounting shows the benefits would be a hefty $242 billion a year, more than 10 percent of America's health expenditures."

The counter argument is that if medical providers screw up, those injured by their mistakes should have a right to sue and be compensated for their damages.

Ignorance of the Law

According to the U.S. Department of State, in 2008 there were nearly one million lawyers in the United States, a number that represents over 70% of all the lawyers in the world. That total represents an increase of nearly 100% from the 1980 total of 542,000 and an incredible 150% increase from the 1970 total of 355,000.

America has 361 lawyers for every 100,000 people, compared to Britain with 94 per 100,000, 33 in France and a mere seven per 100,000 in Japan.

And all those lawyers do file lawsuits -- about 17 million civil cases were filed in state and federal courts in each recent year. Your chances of being involved in a lawsuit during your life time are one in five.

U Needa Lawyer

Americans have traditionally held a lawyer's assistance to be essential when faced with a legal problem of almost any kind. "After all," a layman's prudence suggests, "what does the average person know about the mysteries of the law?" That's why attorneys are required to go to law school, isn't it - so they can master the intricacies of such a vast, complex field of knowledge?

The corollary fable is that all legal matters are "serious" by their very nature. Thus, the conventional wisdom when a legal problem arises is: "Don't try to do it yourself -- get an attorney." This theme has been repeated so often (usually by lawyers), it has been reduced to a modern aphorism: "One who acts as his or her own attorney has a fool for a client."

Incestuous?

Think about the process: lawyers make the laws (in the U.S. Congress and most state legislatures, the largest single occupational group is lawyers); lawyers, as judges, interpret and apply the laws; and only attorneys are allowed to represent people who find themselves entangled with those same law, (although you can choose to represent yourself).

And when it comes to policing the ethical conduct of lawyers, mostly lawyers administer codes of conduct they write themselves, through bar associations and grievance committees they con¬trol, usually meeting in secret. Most of these committees have a dismal record of disciplining fellow attorneys.

A few years ago Bill Bonner, (left) the founder of head of Agora Communications, asked me to write what he described as "a layman's guide to the law" -- a book that would allow the average person to understand legal problems they face in every day life and tell them what to do, short of having to hire a lawyer.

Do It Yourself

From that suggestion came my book, Lawyer-Proof Your Life, subtitled: A Do-It-Yourself Guide to Saving Time, Saving Money and Avoiding Lawsuits.

Granted, you may run into some complicated legal situations that will require the expertise of a professional. But even then, this book will help by giving you the information you need to realistically assess your own position, and to understand the recommendations and actions of your attorney.

My goal in this 245-page book is to help keep you in control of your own life, and your own business and financial dealings. You can think of this book as the legal equivalent of a First-Aid manual. It covers just about every legal situation you are ever likely to face in life (and some after death).

You’ve learned how to self-medicate your sore throat and bandage minor scrapes and burns without first graduating from medical school. My book will teach you how to bind up your own legal wounds -and lawyer-proof your life.

For more information about Lawyer Proof Your Life, this is the place to click.

Bob Bauman Remarks at the Cato Institute

2009-10-21T15:23:26-04:00

Remarks of

Hon. Robert E. Bauman JD

Legal Counsel, The Sovereign Society LLC

at the conference on the

Case for Tax Competition, Fiscal Sovereignty, & Financial Privacy

Tuesday, October 20, 2009

The Cato Institute, Washington, D.C.

The Organization for Economic and Community Development (OECD) is in the forefront of what I do not hesitate to call the attempted "nazification" of the world's sovereign tax systems.

I use "nazification" in the dictionary sense that the term describes persons who are fanatically dedicated and determined to control a specified activity or practice, in this case the imposition of a uniform standard of high taxes and forceful tax collection globally.

History

The OECD claims to be the successor to the Organization for European Economic Co-operation (OEEC) that began in 1947 to support the U.S. Marshall Plan for the reconstruction of Europe after World War II. In 1961 the G-7 major nations created the OECD with a high sounding mandate to help "achieve sustainable economic growth and employment while maintaining financial stability."

It was created as a supposed economic counterpart of NATO. It was, in many ways, a defender of Western economic liberty and professed to be in favor of free market principles. Through the 1980s, OECD studies focused on market solutions against state intervention. Then, in the 1990s, the OECD started its move leftward.

Today the OECD is treated by the liberal media as a recognized authority on just about any and every topic.

It depends for world impact on an unquestioning, semi-ignorant, sympathetic left-wing news media. The OECD job is to churn out propaganda designed to keep taxes high in their home nations, and to destroy small jurisdictions that attract trillions of banking and investment megabucks with low, or no taxes.

Paper Tiger

The bitter irony is that the OECD is nothing more than a paper tiger based on its member states agreement. It's not even a government or international agency, in the sense that the UN has legal standing. It is a glorified public relations operation with diplomatic immunity.

With an almost religious fervor, OECD bureaucrats presume to tell people and governments how they should conduct themselves by, as they claim, "setting standards and creating values for the entire world."

A tall and very presumptuous order for the OECD's 2000 bureaucrats, the salary of everyone of whom is tax exempt because of their coveted diplomatic status. Housed in a fine Parisian mansion that once belonged to the Rothschild family, the Château de la Muette, the OECD's annual budget of over is $300 million, with U.S. taxpayers footing 25% of the cost.

Wordspeak

What its word smiths euphemistically call "unfair tax competition" and a "global playing field" are among the major statist Trojan horses promoted by the OECD. Consider the initiative on "harmful tax competition," launched by the Organization's Committee on Fiscal Affairs in 1998.

"Competitive forces," writes the OECD, "have encouraged countries to make their tax systems more attractive to investors. However, some tax practices are anti-competitive and undermine fair competition and public confidence in tax systems." Thus, the OECD says it wants to achieve a "global level playing field" by requiring member states to enforce their tax laws through exchange of financial information, including banking information on individuals.

At the London G-20 meeting it appears the OECD obtained their goal, at least at pertains to tax information exchange. You can bet the OECD puppet won’t stop there because their puppet masters will keep them dancing for automatic tax information exchange, and eventually, the imposition of international taxes, Tobin or otherwise.

Global Tax Cartel

In public choice terms, the U.S. IRS and the tax collectors of the major welfare states are trying to forming a global cartel to extract as much as possible from the people who are being taxed.

The world needs to be made to understand the OECD's insane definition of what is supposedly "harmful" in the way of "tax competition" -- what is it that turns the socialist stomachs of these effete Paris-based bureaucrats, (these folks who enjoy French diplomatic status, and thus are personally exempt from the taxes they promote for others.)

No -- the taxes that upset them are not HIGH taxes, but LOW taxes; they get their worst heartburn when there are no taxes at all -- which is why they have a constant, burning dislike aimed at the tax havens of the world.

So from an innocuous and rather useful free market oriented economic and statistical shop, the OECD has thus become a promoter of leftist, pro-tax global diktats.

OECD Politics

In 2006, Angel Gurria, a former Mexican politician, became the secretary-general of the OECD. Six candidates had applied for the job, in a highly political process. One of the candidates was Alain Madelin, a French classical liberal politician, who, had he been chosen, would probably have administered a badly needed shaking up the OECD bureaucracy. But Sr. Gurria got the support of a majority of member states, including the U.S. - despite Mr. Madelin's reputation as a supporter of American domestic and foreign policy.

More recently M. Madelin has said he believes that the OECD has been carried into the world governance movement, which, he explains, is where the enemies of liberty have refocused their fight. He adds, pessimistically, "It is the end of the OECD."

If only M. Madeline were correct.

Lovers of liberty can only hope for the curtailment, if not the demise of the OECD. For the last decade this tax exempt Paris think tank, in spite of its sometimes useful research, has served as the chief political propagandist for leftist attacks on tax havens, financial privacy and low taxes and tax competition in general.

Proxy Puppet

Acting as proxy for the major high tax nations, the OECD has often played the bully, especially in its clumsy attempts to crush tax havens and force a uniform system of high taxes worldwide.

In pursuing its dictatorial goals the OECD is doing the bidding of its member nations, many of which, like the United Kingdom, France and Germany, and increasingly, Mr. Obama and his government by czars, are high tax, socialist welfare states bent on ringing every last dollar, pound or euro out of taxpayers to finance expanded socialist programs, continuing trillion dollar deficits and statist economics.

The fiscally faltering welfare states of the EU and beyond need those tax megabucks to finance their spending sprees and to help cover the resulting deficits. And as a result, all citizens are made to suffer.

The Art of Blacklisting

The OECD instrument of choice in their pro tax campaign has been the phony "harmful tax competition" blacklist of nations with low taxes.

To prop up their unreasonable demands, the OECD spun off the Financial Action Task Force (FATF), supposedly devoted to fighting money laundering and terrorist cash, but more concerned with destroying financial privacy. OECD/FATF want unrestricted, automatic government access to any and all financial accounts anywhere in the world.

The Future

Is there hope?

Writing in the year I was born, the late Albert Jay Nock, possessed of an extraordinary mind and a thoughtful libertarian philosophy, published a short essay which speaks to us again today.

Entitled Isaiah's Job, Nock described a small number of friends of liberty he called "the Remnant," whom he hoped would somehow keep the ideals of freedom alive, even when all seemed lost.

Nock wrote at a time when socialist, communist, Nazi and other collectivist governments dominated much of the world. He was deeply pessimistic, yet he expressed confidence about an inevitable triumph for the ideals of liberty.

This may seem another dark hour for the cause of personal and economic liberty, but I suggest that in the work of gatherings such as this and the groups sponsoring it, such as the Cato Institute and the Center for Freedom and Prosperity, we have more than a remnant, but rather vibrant and continuing instruments with which to remind others of the eternal truths of economic liberty.

P.S. Reserve your spot at this year’s Offshore Advantage Academy before it’s too late. We’ve already got more reservations than any event before, and we may just be able to get a few more before the hotel cuts us off. IRS tax and reporting requirements will be major topics. Click here for more on your “last-minute” discount…

IRS Numbers Game Rolls On

2009-10-17T20:34:41-04:00

Indulge me a moment of wild supposition.

Suppose in an unlikely event the U.S. Department of Justice announced they were going to concentrate special efforts on investigating African Americans and Latinos because those groups commit more crimes statistically than other racial or ethnic groups.

Imagine the howl that such an audacious non-PC act would produce in the liberal media! The New York Times would have apoplexy and MSNBC's cables would melt down with molten invective.

But few bat that proverbial eye when the U.S. Internal Revenue Service [sic] continues to treat all Americans who engage in offshore financial activity as criminal suspects.

Built In Prejudice

Do you think the IRS might just be a bit prejudiced against any American who has the audacity to keep their finances beyond the immediate jurisdictional reach of the IRS, U.S. courts, the threat of lawsuits and the dark shadow of the PATRIOT Act?

The fact that offshore bank accounts, investments and other financial activity are all completely legal under American law, (at least at the moment), does not seem to deter the IRS from their overt prejudice against anything and anyone "offshore".

Big Deal?

As an example, last Wednesday, Doug Shulman, IRS commissioner, called a Washington press conference to announce that 7,500 Americans have volunteered information about unreported income hidden in overseas accounts ahead of the Thursday, Oct. 15 deadline for a U.S. government tax amnesty program.

According to Shulman, (below) that’s a number higher than the IRS expected. Under the amnesty program that began in September, Americans could declare unreported offshore accounts pay reduced fines and receive general immunity from criminal prosecution.

The IRS Fear & Awe program turned up undeclared income from offshore accounts ranging in amounts from $10,000 to more than $100 million, Shulman claimed. (The IRS always rounds its numbers to suit their own PR purposes).

Bigger Than 2003

When a similar offshore tax amnesty deal was offered in 2003, we were told that was the last chance, but few responded. That amnesty was built on a major IRS propaganda campaign that claimed as many as two million Americans were evading taxes using offshore bank issued credit and debit cards.

Than as now, the gullible U.S. news media widely reported an IRS press statement claiming success for the 2003 IRS partial amnesty program for taxpayers with unreported offshore bank accounts. A whopping 1,200 people turned themselves in!

Wow! -- But wait a minute. Was 1,200 such an impressive number? You be the judge after reviewing the IRS's own numbers.

A Million Here, A Million There

In 2000, the IRS officially estimated that 505,000 U.S. persons had unreported offshore bank accounts. By early 2002, the IRS figure zoomed to over 2 million, with only 100,000 to 200,000 reporting them.

But IRS Commissioner Charles O. Rossotti, in May 2001, demanding subpoenas for offshore credit card records, swore that offshore tax evasion was costing the government US$20 billion to US$40 billion in 2000 alone! No proof was offered, of course.

But when he retired in 2004, Commissioner Rossotti admitted in testimony before Congress that the IRS was able to show only 82,100 taxpayers had unreported offshore accounts.

And this last figure came after the IRS had grabbed thousands of offshore credit card records from Visa, MasterCard and American Express. He lowered the $40 billion estimate drastically down to an estimated the annual tax loss at US$447 million, about US$7,000 per taxpayer.

The IRS Commission apparently could not figure out whether it was US$447 million or US$40 billion that was lost. And they couldn't decide whether supposed offshore evaders number 82,000 or 505,000 or 2 million. (The numbers changed with every IRS press release).

Free the IRS 7500?

So last week's great IRS triumph, according to Shulman, was getting 7,500 unreported American offshore account holders to come in from the cold.

Yet this same IRS hounded the Swiss banking giant, UBS, for a year, demanding the names of 55,000 U.S. account holder at the bank, all of whom the IRS implied were evading millions in taxes.

When that fracas ended short of President Obama declaring war on Switzerland, only 4,500 names were turned over by UBS. Are they part of the IRS 7,500?

Up the Panama Canal with Rod & Gun

Commissioner Shulman also said the IRS is expanding its offshore tax crackdown and will open new criminal tax offices in Beijing, Sydney and Panama.

A leading Panama attorney called his statement a "scare tactic," adding: "Panama has no tax treaty with the U.S. nor with any other country, so what could an IRS presence at the U.S. embassy here prove? Even if President Martinelli (left) were silly enough to sign an tax information exchange treaty, our legal system and the courts would block any attempted IRS fishing expeditions".

Shulman Outs Levin

We do have to give Commissioner Shulman his due when dealing with one highly bogus number.

Testifying before a U.S. House of Representatives appropriations subcommittee earlier this year the Commissioner in effect called Michigan's radical leftist Democrat U.S. Senator Carl Levin, (below) a liar.

Shulman said that claims that the U.S. government and the IRS lose $US100 billion annually because of tax evasion by Americans who use offshore tax havens are "wild estimates" that "don't have much basis".

Stay Tuned
Vern Jacobs CPA, (below) a leading offshore tax expert, notes that the IRS amnesty is the easy way out for that befuddled agency.

"When taxpayers come forward because the government has announced there won't be any criminal sanctions, it saves the IRS a lot of time, effort and costs. When the IRS has cleared the deck of the current 7,500 backlog, I would not be surprised to hear about another tax amnesty deal for the others who have not yet come forward."

And if the numbers thrown around by the IRS are to be believed, there still could be millions of Americans hiding cash offshore.

And Stay Legal

Make certain you are not one of them, and the Sovereign Society will help you comply with all tax and offshore reporting requirements on a continuing basis.

24 Hours to Pay -- or Pray

2009-10-13T20:44:36-04:00

Tuesday's New York Times sums up the sad situation: "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. 15th.

"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 [now hours] away, tax lawyers say they are being inundated by anxious clients."

Too Late

Well, if you have waited this late, it is to be doubted that most law firms or tax lawyers will be able to make the IRS contacts necessary to avoid your being caught in the worst possible situation.

Our advice then and now has always been: a U.S. taxpayer who has unreported income, as a first step should contact a criminal tax defense attorney for a complete review of the person's tax status.

Rule One is: your lawyer, not you, should approach the IRS. But unless the contact with the IRS is made in advance of the Tuesday deadline, the penalties could be much more severe.

FBAR

As a reminder of what Sovereign Society members should know by heart, based on our repeated reminders, an annual report entitled Foreign Bank Account Report, or FBAR, (Form TDF 90-22.1) must be filed with the U.S. Treasury by any U.S. persons with direct or indirect control over an offshore financial account which has $10,000 or more in it during the year.

The FBAR may be obscure to some, but over the eleven years since our founding, the members of the Sovereign Society should know all about FBAR.

Not only have we explained its annual June 30 filing requirement, we even reprinted the FBAR in our publications and regularly direct readers to the IRS web site page for the form. Frankly, we believe our meticulous approach to explaining IRS filing offshore report requirements is part of out duty to keep members and readers informed – and out of trouble with the IRS.

(That June 30 filing deadline was extended twice this year by the IRS, hence the Oct. 15 deadline mentioned in The Times).

I addressed this very topic extensively in July.You may wish to review it.

Come to Los Cabos

More importantly for the future, among many important topics to be covered, reporting requirements will be discussed and explained at our upcoming Sovereign Society 3rd Annual Offshore Advantage Seminar: A Beginner’s Guide to the Offshore World, November 4, 2009 – November 7, 2009, at the Westin, Los Cabos, Mexico.

Twenty-one of the world’s most respected offshore masterminds -- with over 325 years of collective knowledge in private offshore banking, global investments, and asset protection - will assemble in Los Cabos for four days of closed-door mastermind meetings. I'll be there too to meet and talk with you.

A select group will be given a rare "insider’s look" as these experts reveal their time-tested strategies for protecting privacy and capital in today’s volatile markets, economy and new era of populist politics.

For full details on our Los Cabos meeting agenda and tactics to be revealed, click here.