The Sovereign Investor
by Bob Bauman: Superman
Ends His U.S. Citizenship
is a line from a marching anthem in an old Hitler Youth songbook
that goes as follows: Denn heute gëhort uns Deutschland;
Und morgen die ganze Welt. A rough translation: For today
Germany belongs to us; And tomorrow the whole world.
Now I hasten
to add that I am not comparing agents of the U.S. Internal Revenue
Service (IRS) with the Nazis, but their policies, tactics and attitude
too often provide grim reminders of a superior cult that believes
they are unstoppable even by the clear words of the U.S.
Constitution or the laws of other sovereign nations.
A few years
ago in one of my books I wondered if the day would come when armed
IRS agents would be wading ashore on the beaches of Caribbean tax
havens, ready to enforce demands for bank records and other information
about American with offshore business and bank accounts.
of the Agents
Two years ago
I read a news story stating that IRS agents would be stationed in
the U.S. Embassy in Panama. When I asked our veteran Panama attorney
and member of the Sovereign Society Council of Experts, Rainelda
Mata-Kelly, about this her response mirrored my thinking: I
dont know why IRS agents would be stationed here. Panamas
territorial tax law applies here, not U.S. tax laws.
Well, we were
We could hardly
have guessed that the U.S. Congress. momentarily dominated by Obama
and his radical left Democrats, would enacted the
pending FATCA law, the basic premise of which is that U.S. tax
laws apply to every bank and financial institution in the entire
That the country
in which an offshore bank may be located, such as Switzerland, Austria
or Panama has existing laws against revealing such financial information
is not even considered by the IRS They are only nations.
We are the IRS!
Here to Help You!
warned U.S. taxpayers with offshore financial operations that
the IRS may send agents into foreign jurisdictions. It appears that
the IRS historically has sent agents to a foreign country for interviews
and to review books, ledgers and other documents, but only with
the foreign jurisdictions permission and under its rules.
As we all know
only too well, U.S. law holds citizens resident elsewhere liable
for paying U.S. taxes in addition to those they file and pay to
another country, one of the only countries in the world to impose
this extra-territorial tax reach on non-resident citizens.
If you are
a U.S. person with an offshore business your records and U.S. tax
and other reporting had better be in very good order.
The major problem
as I see it is that the IRS has an ingrained prejudice against U.S.
persons with offshore bank accounts and business interests. Add
to the arbitrary application of a complex U.S. tax code two major
factors: 1) an obvious IRS prejudice against taxpayers the
attitude that the taxpayer is always wrong, that taxpayers are guilty
until they can prove themselves innocent; 2) a well known IRS opinion,
shared by most U.S. government bureaucrats, that any American who
dares to engage in offshore financial activity is probably a tax
evader or worse.
whose salary is about $400,000 a year, has been consistent and clear
in his demagogic attacks against millionaires, billionaires
and corporate jet owners paying their fair share
tax them more, he says.
He knows but
ignores the fact that the wealthiest top 10% of households, earning
an average of $366,400 in 2006, paid 73% of the income taxes collected.
The bottoms 45% of Americans, on average, make a profit from the
federal income tax; they get more money in tax credits than they
would otherwise owe in taxes. Those people get government payments
subsidized by the taxes others must pay.
what the late, assassinated U.S.
Senator Huey Long (D-LA) cheerfully called for; redistributing
As the Republican
Leader of the U.S. House of Representatives,
Eric Cantor (R-VA) has said, Obama calls for others to stop
playing politics but he repeatedly engages in the politics
fueled by efforts to incite class warfare.
Obama the Hypocrite aggressively is courting Wall Street donors
to support his shaky re-election campaign, trying to fool them that,
despite his repeated attacks on corporate jet owners, his policies
remain favorable to the investor class. No
doubt a number of bailed out banks that got billions would agree.
the Obama philosophy of spreading the wealth around,
U.S. IRS Commissioner Douglas Shulman has adopted IRS policies aimed
right at what he described as high wealth individuals and
their related entities.
targeting the wealthy and offshore American financial activity,
Shulman launched what he calls the IRS Global High Wealth
Industry Group, (GHWIG) described as a game-changing
strategy to centralize and focus IRS compliance expertise
involving rich folks who supposedly dont pay enough taxes.
This IRS assumption
of more taxes collected offshore runs counter to a 1998 U.S. Senate
Committee on Finance report that stated: Nearly 50% of the
returns filed by overseas citizens or resident aliens report no
tax liability, primarily as a result of sections 911 and 901 of
the Code [the
foreign earned income exclusion, which I have explained before].
The new IRS
and onerous FACTA programs make no distinction between hidden, unreported
fraudulent offshore accounts and the accounts of U.S. citizens or
green card holders who are residents of other countries and who
regularly declare their financial assets and pay taxes to these
The late Will
Rogers once observed: The crime of taxation is not in
the taking it, its in the way that its spent.
I think Will
was only half right on that one.
with permission from The
August 29, 2011
E. Bauman is a former Member of the United States House of Representatives
from Maryland, (19731981). He is also a former federal official
and state legislator; Member, Washington, DC Bar; Graduate of the
Georgetown University Law Center (1964) and the School of Foreign
Service (1959), Washington, DC. Robert currently serves as legal
counsel for the Sovereign
© 2011 Robert E. Bauman
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