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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER
Your Link to Freedom, Privacy & Prosperity in the Offshore World
Tuesday, February 3, 2003 - Vol. 5 No. 14
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In This Issue:
* COMMENT: No Amnesty At All
* OFFSHORE: Caymans Spy Quits. Jersey Reluctant. Guernsey Drop. Man Must Agree? EU Evaders. UK Revenue. Sanders. Bahamas Cash. Hong Kong Freedom. New Zealand Split Personality.
* WEALTH: High Tax Australia. Bush Savings Plans. Dominican Fugitive. Offshore Scam. US Single Tax. Currency Overlays.
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COMMENT: No Amnesty at All
Dateline: LOS ANGELES, CALIFORNIA
Dear A-Letter Reader:
We have been very critical of the US Internal Revenue witchhunt aimed at US persons who have credit or debit cards issued by offshore banks. Without probable cause of any specific crime, the IRS has demanded and received court approval to review the credit card records of what they allege to be "millions" of Americans.
This IRS scattergun demand for private financial records is nconstitutional on its face. Opening an offshore account and using an offshore-issued credit or debit card is completely legal under US law. In spite of that unquestioned legality, two years ago the IRS began a smear campaign to label all offshore credit card holders as suspected tax evaders.
After two years of screaming about offshore tax evasion, in January 2003, the IRS announced what they called an "amnesty" program for individuals with unreported offshore accounts or income who voluntarily come clean to the IRS. But there is far less to this amnesty than meets the eye.
The IRS says it will waive criminal prosecution and fraud penalties for US taxpayers who used offshore accounts to conceal unreported income. In exchange the taxpayer must give information about promoters of phony tax shelters or other evasion schemes. Taxpayers must file amended returns by April 15, 2003, disclosing previously hidden income. They must also pay back taxes, interest and penalties, but the IRS says, they will not face civil fraud or criminal charges.
On its face, this is no amnesty at all. In most tax amnesties (used with varying success by many US states and some foreign countries), the government waives all criminal and civil penalties in exchange for taxpayers coming clean and paying back taxes owed.
Vernon Jacobs, CPA, tax advisor to The Sovereign Society and a recognized authority on offshore tax matters, warns against rushing into this so-called "amnesty" program. Jacobs points out that US tax laws and IRS rules contain many traps for unwary taxpayers lured by IRS promises. "Any US taxpayer who has any unreported income first should contact a criminal tax defense attorney for a complete review of the person's tax status," says Jacobs. Jacobs also notes that, although the amnesty provides that a taxpayer only need compute any unpaid taxes for 1999-2001, the IRS may also examine earlier years. Most ominous, he says, is that anyone who voluntarily participates in the program opens himself to the possibility that the IRS will deny the promised amnesty benefits. The IRS can still pursue criminal charges and penalties if it wishes.
Given the scores of thousands of credit card and other records the IRS now has in its possession, one has to wonder why there is a need for a questionable IRS "amnesty." If the IRS has proof of its claims of billions of dollars lost in millions of offshore accounts, why not go ahead and prosecute?
The answer is that the IRS has no such proof and this amnesty is a public relations ploy to make the agency look as though it is doing its duty. In responding to the amnesty offer, one should keep in mind that well known phrase: "We're from the government and we're here to help you."
That the way that it looks from here.
BOB BAUMAN
PS You still have time to join me in Dallas Wednesday, West Palm Beach Friday. Info at: LINK: http://www.sovereignsociety.com/vmembers.php?nid=510
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COMMENT LINKS:
* Vernon Jacobs warns about the IRS amnesty program.
LINK: http://www.offshorepress.com/amnestydetails.htm
* Richard Duke on IRS Voluntary Disclosure Procedures
LINK: http://www.offshorepress.com/amnesty-disclosure.htm
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* OFFSHORE *
BRITISH LABOUR'S CAYMAN MONEY SPY QUITS
LONDON: After fleeing by plane with his family, ex-UK cop Resigns as Cayman anti-money laundering chief. LINK:
http://www.guardian.co.uk/military/story/0,11816,885879,00.html
* US civil fraud lawsuit filed against Caymans corporations. LINK:
http://www.bizjournals.com/columbus/stories/2003/01/27/daily43.html
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JERSEY RELUCTANT ON E.U. SAVINGS TAX DEAL
Island's leaders question whether 'level playing field' is guaranteed.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10708
* GUERNSEY asset fund levels drop.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10707
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ISLE OF MAN SAYS IT MUST GO ALONG WITH E.U.
Leader claims Man must abide by EU savings tax deal; why is not explained.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10703
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WHAT E.U. TAX EVADERS SHOULD DO NOW
Under the new EU tax savings deal 6 strategies for a response. LINK;
http://www.faz.com/IN/INtemplates/eFAZ/docmain.asp?rub={B1311FCE-FBFB-11D2-B228-00105A9CAF88}&doc
={D368DE9E-EFD4-416D-A7DF-A17CCD5BA148
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BRITISH INLAND REVENUE ACCUSED OF BIAS
LONDON: Critics claim offshore companies not being pursued. LINK:
http://www.observer.co.uk/business/story/0,6903,886865,00.html
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SANDERS HITS F.A.T.F. FOR UNFAIRNESS TO HAVENS
Antigua's lead official on offshore matters attacks the Financial Action Task Force for ignoring sovereign nations in its actions.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10711
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BAHAMAS CLAIMS LARGE FOREIGN RESERVES
NASSAU: Over US$1 billion claimed in the bank.
LINK: http://www.thenassauguardian.com/business/315303949171134.php
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LIBERTY WILL SURVIVE IN HONG KONG
In spite of new legal curbs dictated by Communists in Beijing. LINK:
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1042491448302
* US offshore tax amnesty may impact Hong Kong.
LINK: http://biz.scmp.com/bizmain/ZZZUNDOYLBD.html
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NEW ZEALAND'S SPLIT PERSONALITY
Second most honest business nation, after Denmark. LINK:
http://www.nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3099339&thesection
=business&thesubsection=general&thesecondsubsection=&thetickercode=
* OECD paints ugly picture of New Zealand.
LINK: http://www.nzherald.co.nz/storydisplay.cfm?storyID=3099396&thesection=news&thesubsection=general
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* WEALTH *
HIGH TAX AUSTRALIA
The nation down under has some of the highest taxes in the world. LINK:
http://www.heraldsun.news.com.au/common/story_page/0,5478,5934320^421,00.html
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BUSH PROPOSES NEW SAVINGS PLANS
Tax savings promised under new retirement proposals.
LINK: http://www.tax-news.com/asp/story/story.asp?storyname=10712
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NEW YORK FUGITIVE IN DOMINICA
Alleged to have absconded with $400 million.
LINK: http://www.nypost.com/business/29542.htm
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ANATOMY OF AN OFFSHORE SCAM
Basketball hero fouls out in a big way. LINK:
http://www.stltoday.com/stltoday/news/stories.nsf/News/D8F86194DF1C9BE886256CC200253E71?OpenDocument&Headline
=Basketball hero pleads guilty in financial scam
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A U.S. SINGLE TAX THAT CURES ALL ILLS?
A fractional tax on all financial transactions.
LINK: http://www.nytimes.com/2003/02/02/business/yourmoney/02CONT.html
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* WHAT IS a currency overlay manager? LINK:
http://www.reuters.co.uk/newsPackageArticle.jhtml;jsessionid=MMPLPC2A00YZMCRBAELCFEY?type=fundsNews&storyID=216678
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THE SOVEREIGN SOCIETY OFFSHORE A-LETTER.
*BOB BAUMAN, EDITOR. *
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