? It isn't obvious to me how a tax auditor could determine that an offshore company, paying you from a numbered offshore account, is actually just you in disguise.
Well, the first thing he would do would be to ask you "who owns this company?". If you answer "I don't know", then you have just committed a very serious offence indeed. Depending on circumstances and jurisdiction, the guy may be able to subpoena your lawyer or accountant and force them to grass on you. He can certainly have your house searched for the particulars of ownership. And your bank will usually want to know the background of the offshore company it's dealing with before accepting transfers, which is information it will give up without even protesting.
Your example is absolutely fine in principle. But you have to add a lot more layers of the same thing (so that you can make it much less likely that the auditor will ask you or your friends a killer question) to make it work in practice.
Is this a minor glitch on your part
Yes, sorry. I realised halfway through the post that I didn't want to imply that I'd ever designed laundering schemes. What I did were tax avoidance (!=evasion, although the IR didn't always agree) schemes. But although your objective in these schemes is always that they be legal, there's always a temptation to add a few layers of "security through obscurity", which is the same sort of thing money launderers do, so one gets a fair enough feel for what will and won't work.
get a big international data cable strung out there.... keep all the data and money underwater, where a bunch of marines and helicopters can't just waltz in and get it
"We can't get at the money or data, sir! It's all hidden underwater, at the other end of this big... long... fragile.... fibreoptic cable.... with the other end.... in New York...ohhhh".
Dubai in the United Arab Emirates is trying to move away from dependence on oil reserves towards, as here, banking and finance
Dubai, of course, is not a poor country -- the "banking and finance" they are moving towards is based on fifty years' worth of investment of their own oil profits, and they will certainly not be screwing around with money laundering (although they probably will have strong banking secrecy -- Gulf State accounts are usually highly secretive, mainly because they're so big).
In general, when you see an annoucement like this, it's because some chancer in New York, London or (all too often) Vancouver has sweet-talked the local government into letting him run his pet scheme from there, kidding them that they will have a thriving financial sector. The money never, ever shows up in the local economy, apart from a few bribes to the Finance Minister.
One simple way of laundering money is to get yourself one of these anonymous offshore bank accounts, then create a fictitious offshore company that hires you to perform expensive consulting work. You have really hired yourself, but it's hard to tell that's what has happened, and harder still to prove it. So you then submit work records and bills to the bogus company and get paid. Your income appears to be legitimate. Of course, this means you have to pay income tax on it, but at least you get to keep the rest, and you can pass an IRS audit with flying colors.
Ahhhh (this used to be my life, a few years ago). I'm sure that Mendax would like to remind all slashdotters that this is an illustrative example only, and that it should not be tried at home.
The phrase you can pass an IRS audit with flying colors is used here rhetorically -- actually, a half-competent auditor would tear you to shreds if you tried this "thin" scam on any significant tax liability. Real tax avoidance schemes are a lot more complicated and require [ahem] godlike genius consultants to design them (particularly if you want to have a chance of them being declared legal).
Oh yeh, and people who "go to Vegas, buy a load of chips and then cash them in without gambling" get to learn a fair amount about both the IRS and the Secret Service before long. The casino companies have a troubled enough relationship with Lily Law without acting as willing accessories to avoidance or worse.
If you're really interested, the locus classicus is "Secret Money" by Ingo Walter.
No, but there's more to it than the Post put up. US$10K is the administrative fee to set up the bank. If you want to use your bank for any actual banking business, then you would have to pay in capital of about US$1mn, or nobody but nobody would deal with you. If you didn't want to do that, but wanted to use the bank as a front company for tax-driven transactions, you'd still probably have to stump up, in order to fall outside the "thin company" regs.
So $10K would basically buy you a brass plate on a wall (brass plate and rental of wall extra), and the right to call yourself a "bank" which can be useful if you're planning any Nigerian advance-fee frauds. Or if you're laundering money on the cheap, and just want to extend a paper trail (rather than being concerned to create a bank which can carry out transactions with any appearance of legitimacy).
But for that privilege, $10K is indeed cheap. Which is why I would guess that "Incorporated in Nauru" will soon become the best way known to man to get yourself blackballed from any reputable banking system.
I would guess that you're best off biting the bullet and paying French tax. If Nauru keeps advertising itself like this, it will get put on the blacklist of money laundering centres. If that happens, it will be next to impossible to introduce money stored in Nauru to the banking system of any country located where you might possibly want to spend it.
Unless you go through illegal channels of course. But money laundering is a very expensive business -- if someone had a laundering scheme which would provide an "anonymizer for cash", and you ended up keeping 48% of the money, then that would be regarded as a very efficient scheme indeed.
In general, havens are not usually worthwhile for straightforward tax avoidance -- they're more for your Kalashnikovs and Kokayne/IMF loans crowd.
And if you're paying 52% straight down the line, I can probably give you the name of a man who could save you some.
From that point you're a Citizen of THERE, and not of the US and no longer bound by silly IRS codes
Sadly, not so.
(disclaimer: don't get your tax advice from slashdot!)
It's a widespread fallacy that countries only have the power to tax their own citizens. Most countries will tax their own citizens on their income, plus they tax all income earned within their country. If you're a US citizen drawing a salary in the UK, you quite often end up paying two lots of tax. Yopu have to hope for a favourable "double taxation treaty" to rescue you. It's never this simple.
As noted below, offshore havens are of use to people who have substantial sources of income other than paychecks . . . .
I am undoubtedly full of shit, but I must protest that in this instance, you are in fact mistaken. The post to which mine is attached did indeed mention the Jewish people, and it has now been moderated to -1 (thanks). I would surmise that you have your threshold set to 0 or above, so to you it appears that my post is attached to an entirely different one.
Gifted kids are often "pushed" around by teachers who can't tell the difference between boredom and vandalism
That's absolutely outrageous. There's a very clear dividing line between "boredom" and "vandalism", just as there is between having a child which is "gifted" and one which is "troubled". It's about US$75K per year, I think.
Any test put together by a human being (or human being(s)) can be fooled by a sufficiently intelligent/perceptive human being.
Strikes me that what's needed is a set of model answers. If anyone wants to set up www.foolmosaic.com, I'm good for a couple of quid toward the phone bills.
Might I draw the attention of moderators to the fact that the above piece of Anti-Semitic bullshit has been up for twenty minutes now, and that this reflects rather badly on all of us?
I'll reply to the earliest instance of this fallacy, because it appears many times below.
It's a fundamental principle that there can't be "legal tragedies" -- situations in which it is impossible to avoid breaking the law. In cases like these, one or other of the incompatible laws is ruled not to operate in a court. So, if you were (per impossibile) to be an instance of a patented piece of intellectual property, you would not be forced to pay license fees.
Indeed, one would more obviously argue that you have not used any intellectual property at all by being born with blue eyes, since being born is not an intellectual act. If, on the other hand, you carried out gene therapy on yourself (again, I am given to understand, per impossibile), then it is much more arguable whether you would owe (morally and legally) a debt to the man or woman who invented the sequence of actions you would have to carry out to give yourself blue eyes. Patenting a gene gives you the rights of a patent-holder, not a copyright holder.
Don't get me wrong, I'm wholly against gene patents. But it's for practical reasons (they are unnecessary, given the HGP), rather than anything else. I don't see anything intrinsically more repugnant in making them patentable than in having patents on farm equipment so that it can't be sold cheaply to the Third World.
Yeah, cool man, until it turns out that "fabian thilman" has been a regular visitor to "warez'n'pr0n-r-us", and you get pinched because it's two letters' difference. Or (as someone posted above), you start looking for a bunch of HIV-AIDS information for your brother, and then try to buy life assurance online. Then it's not just the ads that get "targeted".
Oh yeh, and the argument that "Banners are junk huh? What do you want, to kill all your favorite websites? To kill the whole web as it exists right now? " is double edged at best. Does anyone here remember the Internet pre-banner ads and mass access? How many of us would happily swap the current system for that one? Some mornings, I rather think I would. In any case, it's not obvious that the answer is the other way.
Turn them on, and you pay for your personalisation with tracking.
But this is a game of bait-and-switch. You accept a cookie from one site, once, and then your personal information becomes a commodity for evermore, accessible to anyone who's prepared to pay for it, and (in the US) you have no right to stop them. That's a usurious price to pay.
BTW, I tend to use IE(work)/Netscape(home), but always turn graphics off (I only care for text:-)). This means I never see the GIFs in question -- does it mean I don't get the cookies? Dumb question I know, but there you are.
I lived in Camden at the time, and found that if you didn't want to pay the poll tax, then all you had to do was not pay it. They never got round to chasing you up.
Hell, the bible itself says "Thou shalt not kill". Period. It says nothing about the wiccan down the street, or (more likely) those heathenistic Jews that live down the street who just won't accept the later half of the bible.
Hrrrmm.. not so sure about that "period" -- there are a lot of get-out clauses in the Epistles which relate to gays, etc. And the Hebrew word used should be translated more as "murder" than "killing", which strikes me as providing quited enough of a blanket cop-out for any Christian who wants to "execute" someone.
It always amuses me to see Christians proudly avowing their faith, but claiming that all those nasty people who existed over the last thousand years are nothing to do with them. Kind of like modern-day Leninists pretending that the USSR had nothing to do with Communism.
Just to point out that under UK law, an "insider" is defined trivially as "anyone with material inside information", so it is possible to "make someone an insider" by telling them something. Don't know which model Canada follows -- would guess US.
I am a coward and I am offended that you use the word "Coward" to describe people who merely can't be bothered to get an account. But I'm not, like trying to make a big deal out of it, or anything.
While free, open copies of software are nice, as far as I can tell, Mathematica is a proprietary language owned by Wolfram Research, Inc
And indeed, the marginal benefit from opening the source of Mathematica would be pretty minimal, as it is already subjected to genuine peer review of frightening intensity by its testers, who are all high-end mathematicians. Open source is good news compared to "quality through obscurity", but doesn't really compare to real, focused peer review.
For some applications, any hacker is as good as any other. And indeed, there might be a guy out there who could improve the hell out of Mathematica, because he knows his stuff better than Wolfram. But, I tend to think, this is one case where the Capablanca theorem kicks in (Raoul Capablanca to an anonymous chess challenger: "If you could beat me, I'd know you").
There may be other such cases, and a set of criteria for deciding which kinds of software are best served by "limited peer review" would be good news. But don't look in "The Cathedral and the Bazaar" for such a set of criteria, because they ain't there.
those zany math-heads sit in their den/office doing not much more than doodling mathematic formulae on legal pads for as much as 18 hours a day, 7 days a week...
Which reminds me of a favourite joke:
The CompSci department had put in their latest request for a huge and expensive mainframe machine (this was the 1950s, remember). Exasperated, the university admin shouted "Why can't you be more like the Math department?! All they ever ask for is paper, pencils and wastebaskets! Or even better, the philosophy department -- they only ever ask for pencils and paper!
I couldn't be bothered with that "Crack an NT box" contest when there was, like only a measly US$1K to be won, but this new one, it looks worth entering!
Maybe Taco and Hemos could post their credit card details in a "secret" file on/. to provide the Linux end of the contest? ***scan***scan***scan
Slashdot Mirror
? It isn't obvious to me how a tax auditor could determine that an offshore company, paying you from a numbered offshore account, is actually just you in disguise.
Well, the first thing he would do would be to ask you "who owns this company?". If you answer "I don't know", then you have just committed a very serious offence indeed. Depending on circumstances and jurisdiction, the guy may be able to subpoena your lawyer or accountant and force them to grass on you. He can certainly have your house searched for the particulars of ownership. And your bank will usually want to know the background of the offshore company it's dealing with before accepting transfers, which is information it will give up without even protesting.
Your example is absolutely fine in principle. But you have to add a lot more layers of the same thing (so that you can make it much less likely that the auditor will ask you or your friends a killer question) to make it work in practice.
Is this a minor glitch on your part
Yes, sorry. I realised halfway through the post that I didn't want to imply that I'd ever designed laundering schemes. What I did were tax avoidance (!=evasion, although the IR didn't always agree) schemes. But although your objective in these schemes is always that they be legal, there's always a temptation to add a few layers of "security through obscurity", which is the same sort of thing money launderers do, so one gets a fair enough feel for what will and won't work.
jsm
get a big international data cable strung out there .... keep all the data and money underwater, where a bunch of marines and helicopters can't just waltz in and get it
... long ... fragile .... fibreoptic cable .... with the other end .... in New York ...ohhhh".
"We can't get at the money or data, sir! It's all hidden underwater, at the other end of this big
jsm
Dubai in the United Arab Emirates is trying to move away from dependence on oil reserves towards, as here, banking and finance
Dubai, of course, is not a poor country -- the "banking and finance" they are moving towards is based on fifty years' worth of investment of their own oil profits, and they will certainly not be screwing around with money laundering (although they probably will have strong banking secrecy -- Gulf State accounts are usually highly secretive, mainly because they're so big).
In general, when you see an annoucement like this, it's because some chancer in New York, London or (all too often) Vancouver has sweet-talked the local government into letting him run his pet scheme from there, kidding them that they will have a thriving financial sector. The money never, ever shows up in the local economy, apart from a few bribes to the Finance Minister.
jsm
One simple way of laundering money is to get yourself one of these anonymous offshore bank accounts, then create a fictitious offshore company that hires you to perform expensive consulting work. You have really hired yourself, but it's hard to tell that's what has happened, and harder still to prove it. So you then submit work records and bills to the bogus company and get paid. Your income appears to be legitimate. Of course, this means you have to pay income tax on it, but at least you get to keep the rest, and you can pass an IRS audit with flying colors.
Ahhhh (this used to be my life, a few years ago). I'm sure that Mendax would like to remind all slashdotters that this is an illustrative example only, and that it should not be tried at home.
The phrase you can pass an IRS audit with flying colors is used here rhetorically -- actually, a half-competent auditor would tear you to shreds if you tried this "thin" scam on any significant tax liability. Real tax avoidance schemes are a lot more complicated and require [ahem] godlike genius consultants to design them (particularly if you want to have a chance of them being declared legal).
Oh yeh, and people who "go to Vegas, buy a load of chips and then cash them in without gambling" get to learn a fair amount about both the IRS and the Secret Service before long. The casino companies have a troubled enough relationship with Lily Law without acting as willing accessories to avoidance or worse.
If you're really interested, the locus classicus is "Secret Money" by Ingo Walter.
jsm
Anyway, $10k to establish a bank is nothing.
No, but there's more to it than the Post put up. US$10K is the administrative fee to set up the bank. If you want to use your bank for any actual banking business, then you would have to pay in capital of about US$1mn, or nobody but nobody would deal with you. If you didn't want to do that, but wanted to use the bank as a front company for tax-driven transactions, you'd still probably have to stump up, in order to fall outside the "thin company" regs.
So $10K would basically buy you a brass plate on a wall (brass plate and rental of wall extra), and the right to call yourself a "bank" which can be useful if you're planning any Nigerian advance-fee frauds. Or if you're laundering money on the cheap, and just want to extend a paper trail (rather than being concerned to create a bank which can carry out transactions with any appearance of legitimacy).
But for that privilege, $10K is indeed cheap. Which is why I would guess that "Incorporated in Nauru" will soon become the best way known to man to get yourself blackballed from any reputable banking system.
jsm
I would guess that you're best off biting the bullet and paying French tax. If Nauru keeps advertising itself like this, it will get put on the blacklist of money laundering centres. If that happens, it will be next to impossible to introduce money stored in Nauru to the banking system of any country located where you might possibly want to spend it.
Unless you go through illegal channels of course. But money laundering is a very expensive business -- if someone had a laundering scheme which would provide an "anonymizer for cash", and you ended up keeping 48% of the money, then that would be regarded as a very efficient scheme indeed.
In general, havens are not usually worthwhile for straightforward tax avoidance -- they're more for your Kalashnikovs and Kokayne/IMF loans crowd.
And if you're paying 52% straight down the line, I can probably give you the name of a man who could save you some.
jsm
From that point you're a Citizen of THERE, and not of the US and no longer bound by silly IRS codes
Sadly, not so.
(disclaimer: don't get your tax advice from slashdot!)
It's a widespread fallacy that countries only have the power to tax their own citizens. Most countries will tax their own citizens on their income, plus they tax all income earned within their country. If you're a US citizen drawing a salary in the UK, you quite often end up paying two lots of tax. Yopu have to hope for a favourable "double taxation treaty" to rescue you. It's never this simple.
As noted below, offshore havens are of use to people who have substantial sources of income other than paychecks . . . .
jsm
I am undoubtedly full of shit, but I must protest that in this instance, you are in fact mistaken. The post to which mine is attached did indeed mention the Jewish people, and it has now been moderated to -1 (thanks). I would surmise that you have your threshold set to 0 or above, so to you it appears that my post is attached to an entirely different one.
jsm
Gifted kids are often "pushed" around by teachers who can't tell the difference between boredom and vandalism
That's absolutely outrageous. There's a very clear dividing line between "boredom" and "vandalism", just as there is between having a child which is "gifted" and one which is "troubled". It's about US$75K per year, I think.
jsm
Any test put together by a human being (or human being(s)) can be fooled by a sufficiently intelligent/perceptive human being.
Strikes me that what's needed is a set of model answers. If anyone wants to set up www.foolmosaic.com, I'm good for a couple of quid toward the phone bills.
jsm
Might I draw the attention of moderators to the fact that the above piece of Anti-Semitic bullshit has been up for twenty minutes now, and that this reflects rather badly on all of us?
jsm
Overreaction in the defence of liberty is perhaps not the worst of vices.
jsm
Thanks very much for the information. I'm not too fussed about tracking per se, but don't at all like doubleclick's rather pernicious form.
mod the above comment up, please
jsm
I'll reply to the earliest instance of this fallacy, because it appears many times below.
It's a fundamental principle that there can't be "legal tragedies" -- situations in which it is impossible to avoid breaking the law. In cases like these, one or other of the incompatible laws is ruled not to operate in a court. So, if you were (per impossibile) to be an instance of a patented piece of intellectual property, you would not be forced to pay license fees.
Indeed, one would more obviously argue that you have not used any intellectual property at all by being born with blue eyes, since being born is not an intellectual act. If, on the other hand, you carried out gene therapy on yourself (again, I am given to understand, per impossibile), then it is much more arguable whether you would owe (morally and legally) a debt to the man or woman who invented the sequence of actions you would have to carry out to give yourself blue eyes. Patenting a gene gives you the rights of a patent-holder, not a copyright holder.
Don't get me wrong, I'm wholly against gene patents. But it's for practical reasons (they are unnecessary, given the HGP), rather than anything else. I don't see anything intrinsically more repugnant in making them patentable than in having patents on farm equipment so that it can't be sold cheaply to the Third World.
jsm
Yeah, cool man, until it turns out that "fabian thilman" has been a regular visitor to "warez'n'pr0n-r-us", and you get pinched because it's two letters' difference. Or (as someone posted above), you start looking for a bunch of HIV-AIDS information for your brother, and then try to buy life assurance online. Then it's not just the ads that get "targeted".
Oh yeh, and the argument that "Banners are junk huh? What do you want, to kill all your favorite websites? To kill the whole web as it exists right now? " is double edged at best. Does anyone here remember the Internet pre-banner ads and mass access? How many of us would happily swap the current system for that one? Some mornings, I rather think I would. In any case, it's not obvious that the answer is the other way.
jsm
Turn them on, and you pay for your personalisation with tracking.
:-)). This means I never see the GIFs in question -- does it mean I don't get the cookies? Dumb question I know, but there you are.
But this is a game of bait-and-switch. You accept a cookie from one site, once, and then your personal information becomes a commodity for evermore, accessible to anyone who's prepared to pay for it, and (in the US) you have no right to stop them. That's a usurious price to pay.
BTW, I tend to use IE(work)/Netscape(home), but always turn graphics off (I only care for text
jsm
I lived in Camden at the time, and found that if you didn't want to pay the poll tax, then all you had to do was not pay it. They never got round to chasing you up.
jsm
Hell, the bible itself says "Thou shalt not kill". Period. It says nothing about the wiccan down the street, or (more likely) those heathenistic Jews that live down the street who just won't accept the later half of the bible.
.. not so sure about that "period" -- there are a lot of get-out clauses in the Epistles which relate to gays, etc. And the Hebrew word used should be translated more as "murder" than "killing", which strikes me as providing quited enough of a blanket cop-out for any Christian who wants to "execute" someone.
Hrrrmm
It always amuses me to see Christians proudly avowing their faith, but claiming that all those nasty people who existed over the last thousand years are nothing to do with them. Kind of like modern-day Leninists pretending that the USSR had nothing to do with Communism.
jsm
You could spend the next week in a hotel or something and hope that it comes on the b****y awful BBC World?
jsm
Just to point out that under UK law, an "insider" is defined trivially as "anyone with material inside information", so it is possible to "make someone an insider" by telling them something. Don't know which model Canada follows -- would guess US.
jsm
I am a coward and I am offended that you use the word "Coward" to describe people who merely can't be bothered to get an account. But I'm not, like trying to make a big deal out of it, or anything.
jsm
I'm a white southerner and I am offended that you use use the term "southerners" to refer to inhabitants of the southern United States of America.
jsm
While free, open copies of software are nice, as far as I can tell, Mathematica is a proprietary language owned by Wolfram Research, Inc
And indeed, the marginal benefit from opening the source of Mathematica would be pretty minimal, as it is already subjected to genuine peer review of frightening intensity by its testers, who are all high-end mathematicians. Open source is good news compared to "quality through obscurity", but doesn't really compare to real, focused peer review.
For some applications, any hacker is as good as any other. And indeed, there might be a guy out there who could improve the hell out of Mathematica, because he knows his stuff better than Wolfram. But, I tend to think, this is one case where the Capablanca theorem kicks in (Raoul Capablanca to an anonymous chess challenger: "If you could beat me, I'd know you").
There may be other such cases, and a set of criteria for deciding which kinds of software are best served by "limited peer review" would be good news. But don't look in "The Cathedral and the Bazaar" for such a set of criteria, because they ain't there.
jsm
those zany math-heads sit in their den/office doing not much more than doodling mathematic formulae on legal pads for as much as 18 hours a day, 7 days a week...
Which reminds me of a favourite joke:
The CompSci department had put in their latest request for a huge and expensive mainframe machine (this was the 1950s, remember). Exasperated, the university admin shouted "Why can't you be more like the Math department?! All they ever ask for is paper, pencils and wastebaskets! Or even better, the philosophy department -- they only ever ask for pencils and paper!
Sorry for wasting your time really
jsm
I couldn't be bothered with that "Crack an NT box" contest when there was, like only a measly US$1K to be won, but this new one, it looks worth entering!
/. to provide the Linux end of the contest?
Maybe Taco and Hemos could post their credit card details in a "secret" file on
***scan***scan***scan
jsm