Slashdot Mirror
Data Leak Spurs Huge Offshore Tax Evasion Investigation
New submitter lxrocks writes "Tax authorities in the U.S., Britain, and Australia have announced they are working with a gigantic cache of leaked data that may be the beginnings of one of the largest tax investigations in history. The secret records are believed to include those obtained by the International Consortium of Investigative Journalists that lay bare the individuals behind covert companies and private trusts in the British Virgin Islands, the Cook Islands, Singapore and other offshore hideaways. The IRS said, 'There is nothing illegal about holding assets through offshore entities; however, such offshore arrangements are often used to avoid or evade tax liabilities on income represented by the principal or on the income generated by the underlying assets. In addition, advisors may be subject to civil penalties or criminal prosecution for promoting such arrangements as a means to avoid or evade tax liability or circumvent information reporting requirements.'"
Nothing will come of this.
This has been public knowledge since the end of March, yet there has been almost zero coverage of it in the mainstream U.S. media. Here's a bit of info in map form from the CBC on April 3, 2013:
http://www.cbc.ca/news/interactives/icij-map/
and an interactive feature, also from the CBC:
http://www.cbc.ca/news/interactives/offshore-tax-havens/
I deny that I have not avoided attaining the opposite of that which I do not want.
There, corrected it.
Just wait until they start finding out who's names are on the list and see where it goes. Here in Canada we had the story of a Senator's husband running having accounts in tax havens. http://www.cbc.ca/m/rich/news/canada/story/2013/04/03/merchant-offshore-trust.html
My bet is that the actual investigation targets "who got this data" rather than "who does this data show cheated on their taxes". Mark my words, it'll be along the lines of "we can't use this data in court, so we HAVE to find out the source, so we can have them testify", only when the source comes forward, they'll find themselves jailed and the tax evaders will either never get prosecuted or make a sweethart deal.
Just because you're paranoid doesn't mean they aren't out to get you
100,000 people world wide..... that's 500BUCKS stolen for every man women and child on earth....are you feeling angry yet?
This is one bank
I'll bet most of these are drug dealers, gamblers, or con artists hiding dirty money.
Usually it's easier to simply pay your taxes. The stereotypical argument of the rich always evading taxes typically doesn't happen. It's just not worth the risk of having everything taken away from you if you already run a legitimate operation.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
The stereotypical argument of the rich always evading taxes typically doesn't happen.
It's not that they always evade taxes (although that happens too), it's that they have full time staff dedicated to not paying taxes.
Sometimes, it's just middle class people not having all the tools to find ways to sidestep taxes that the rich do.
I would be surprised if that's true. How common are IBCs among people making, say, $50k (the median U.S. household income)? How about even $80k, or $120k? My guess is that they're negligible until you get to more like $500k+, though I'd be interested in some numbers either way.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I'm anonymous enough, why not? It's hardly a secret, ask any accountant.
Pointing it out for those who don't know has value.
"When information is power, privacy is freedom" - Jah-Wren Ryel
I don't know why he has such a problem supporting the society we live in. He says it's all going to be mismanaged so you might as well keep as much as you can...not too different from US libertarian rhetoric really. I think he enjoys the challenge of hacking the tax system more than the savings.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Well the government runs law enforcement, public education, welfare, and infrastructure maintenance, I like having those things and can't pay for them all by myself...
"When information is power, privacy is freedom" - Jah-Wren Ryel
I heard rumors that in order to engage in illegal betting online (in the USA), you needed to have some secret squirrel bank accounts.
Nah, you just need to have money in a foreign bank. Not everyone is as pathological about gambling as the US is. The UK and Ireland have a pretty common sense approach to it, for example. The credit card companies won't have anything to do with it (internet gamblers are notorious for canceling charges for losses apparently).
Not sure if serious...
In government by Kickstarter, money would truly equal political power (and Kickstarter would be the world's largest megacorp from all those transaction fees)...doesn't sound good to me.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Your imagination is quite limited, so let me point you in the right direction with two words: Company Town.
"When information is power, privacy is freedom" - Jah-Wren Ryel
30% of any amount of money is still 30%.
That's not very relevant. 30% of $100 is $30. 30% of $1 million is $300,000. For who is it worth more to reduce their taxes? The person looking at a $300k tax bill.
And suppose you could, for $5000, reduce your tax bill from 30% to 29%? For the first taxpayer, that's $5000 spent to save $1. For the second, it's $5000 spent to save $10,000.
So, uh, which firm does your dad work for, exactly? I'm sure the IRS would love to know...
Tax avoidance and tax evasion are markedly different. Tax avoidance is straightforward: You plan decisions and investments so that all money is taxed honestly, but at the lowest rate for the return. For example, if you need to raise cash, you can choose to sell a stagnant stock at a loss, which will raise the cash you need and build a capital loss credit, rather than selling a stock that's moving up and will likely make even more money than it will cost in capital gains.
Tax evasion is where money is dishonestly hidden from being taxed, such as claiming the purchase of that new fishing rod is really a business expense for your car dealership, or moving it offshore to a country with lax enforcement and claiming to the IRS that you're paying taxes there, while telling the foreign government that it's being taxed here. It's pretty easy to tell when you're "dabbling" in tax evasion, because somewhere in the paper trail, somebody lies.
Effectively avoiding taxes does require having enough money to be able to maneuver around so that the minimum taxes are paid. The taxpayer must have enough money available that they can move their profits into inaccessible places (foreign companies, unrealized investments, etc.) while still having cash to live on. Then when the time is right they can move that money back into something easier to work with, paying a lower tax rate and profiting from the time spent.
Source: I work at a financial advising firm. We do some tax avoidance, but no tax evasion.
You do not have a moral or legal right to do absolutely anything you want.
I don't follow your argument. The "golden gooses" (I think you mean geese) are other people like me, who are not able (not just unwilling) to pay for everything themselves, but like me are willing to chip in (unlike the tax "avoiders.")
"When information is power, privacy is freedom" - Jah-Wren Ryel
Well the government runs law enforcement, public education
The first two are done by state governments, not the feds. Maybe all the tax money should go to the states?
welfare, and infrastructure maintenance
Of which they do an absolutely horrible job. You're correct in that you can't personally afford it -- but for what the population is paying in taxes, we should get a hell of a lot more than what we're getting. Frankly, I think things would be better if they privatized it, and decided, whoever has the lowest bid gets to do it, as long as they meet certain standards -- through competition, taxpayers could get a more efficient deal.
What's unethical is Congress not having produced a reasonable and effective tax code. This is their job. Seriously the quality of the work products of the US Congress is really bad.
Corporations are required by law to operate to the benefit of their stockholders. Not avoiding taxes is in fact illegal.
Also I'm amazed the idea of GE not paying taxes is still prevalent. It's not true.
http://www.factcheck.org/2012/04/warren-ge-pays-no-taxes/
The brunt of the tax burden is borne by the middle class.
The lower classes just don't have much money to tax. The rich upper classes use their wealth to manipulate the law such that they do not have to pay taxes.
Of course, the middle class is also shrinking, as wealth only flows upwards and the upper class makes most of their money by charging the middle class high prices while paying them low salaries. So, as the middle class shrinks, the tax revenue will shrink as well.
The most natural response will be...more taxes! For the middle class! And the problem will perpetuate itself until the middle class dries up completely and there will be no means of upward social mobility at all.
Most of America is having a hardscrabble go of it these days while dishonest politicians and their fellow travelers in DC just keep spending like drunken sailors, it's disgusting.
Less than 1% of the 1% got there through hard work. The most important predictor of success is who your parents are, and it's not simply because they raise you. Indeed, that's far from the most important factor. Nearly no one in American government (at least, at any significant level) has ever really worked for a living.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
All the data, even if acquired illegally is admissible in court as long as the IRS wasn't involved in the illegal action that collected the data. If a guy breaks into your house and steals your laptop and finds kiddy porn on it, he could turn you in and the prosecutor will give him amnesty and they will use the data to put you in prison. The data would only be inadmissible if the police had been involved in the theft, but if they're hands are clean and the illegal action was by another party they are free to use the information to prosecute you.
The brunt of the tax burden is borne by the middle class.
The "middle class" tend to pay the highest proportion of their income in taxes, but the wealthiest in society pay the largest chunk of the total personal tax bill.
In the UK, for example, the top 1% pay 24% of all Income Tax and the top 10% pay over 50%. The next 40%, which could reasonably be classified as the "middle class", pay 35% which leaves less than 12% being paid by the other half of society.
So in both absolute terms and per-capita terms, the richest 10% pay the most tax.
The top earners are also the most mobile and "international" members of society, so the unfortunate conclusion is that countries have to retain those top earners, and one way they do that is to give them a fabvourable tax position. While they pay lip-service to stopping evasion, most countries would prefer to have the richest paying some tax rather than losing them and getting no tax at all.
That's how it's done in the UK. It doesn't improve anything and in plenty of cases it makes things worse and more expensive as the bidders all lie on their bids and then have to be bailed out because the infrastructure can't be allowed to collapse.
Your moral values have nothing to do with the amount of taxes you owe.
"So long and thanks for all the fish."
Never heard of chain of custody? So a child pornographer broke into my house and stole my laptop and then got caught and decided to blame me. At least that's the point I'd expect any rational attorney to make.