A fugitive people within a nation is tyranny.

Posts tagged ‘tax’

Web of Inquisitional U.S. Law Creating Criminals

we the peopleFor decades, Washington D.C. has been adding to the number of federal laws and regulations that carry criminal penalties. Now the number is so high, no one is actually sure how many there are. Experts say practically anyone could be convicted of some sort of federal crime. And it’s all too easy for anyone to violate one of these laws and never know it. Congress has made it dangerous just to be alive in America, never mind whether you are guilty or not. Like federal child support laws, it’s all a matter of inquisition. Common law is dead.

The truth is that anyone can fall prey to overcriminalization. Civil rights have become secondary to the Rule of Law and I don’t mean Common Law. This law certainly isn’t your grandfathers law. [protected] Legal misadventures happened to racing legend Bobby Unser beginning in 1996. Unser went snowmobiling in the Rio Grande National Forest on the border of New Mexico and Colorado.

He and a friend got caught in a blizzard and were stranded for two days and two nights. They barely escaped with their lives. But that was only the beginning of his ordeal. “Bottom line: Don’t trust any government agency,” he warned. “Stand as clear from them as you can. Stay away from them because they’re not there for your good.”

Unser found himself in the middle of a fight with the U.S. Forest Service, facing a possible $5,000 fine and six months in jail for violating The Wilderness Act. The agency accused him of illegally snowmobiling on federally protected land known as “wilderness area.” The racing champ claimed that even if he was in the wilderness area, it was only when he was lost in the snowstorm. With money in the bank and the idea of principle, Unser decided to fight the charge in court.

“Well, I estimate that we probably spent around $300,000, maybe $350,000 would be my guess,” Unser said. As for the government, they spent millions of dollars in their efforts for prosecute Unser. “At the time we went to court, they’d already spent up somewhere around a million dollars. What – it’s the taxpayers money. They didn’t really care how much it cost,” he said.

In the end, he lost and paid a $75 fine. Now the three-time Indy 500 winner has another title to add to his record: He’s been convicted of a federal misdemeanor for getting lost in the wilderness.

Like many others, Unser blames Congress and the men that run it for the growing number of federal laws.

But it’s not just lawmakers who are at fault. Federal agencies not only enforce the laws, but write their own regulations which also carry criminal penalties. With government involved in everything from the environment to employment to health, anyone can easily get caught in the web of federal laws. The numbers prove it. Between 2000 and 2010, close to 800,000 people were sentenced for federal crimes.

Representative Louie Gohmert, Republican – Texas is among a few lawmakers on Capitol Hill sounding the alarm about the disturbing phenomenon, saying that Congress should re-think stiff penalties on simple accounting errors when filing taxes. In the past 20 or 30 years the number of people in jails and prisons in American has gone up almost tenfold because every time you turn around there are new laws.

One solution is for the House Judiciary Committee to oversee any new regulation that carries a criminal penalty, but this may be akin to having another fox to watch the hen house. The attitude behind the penalties is that Congress wants to appear to be tough on crime, including doubling up where state law is sufficient. It wastes money and doesn’t reduce crime. Orwell’s classic book “1984” states the case where fear is predominant and the violation of federal law is likely. There isn’t enough public awareness or outrage! Sadly, this is already because of fear.
[/protected]

Advertisements

The American Expatriot Primer

indigent in AmericaA growing number of Americans are frustrated with the way in which their economy has been managed and are becoming increasingly concerned about future measures the government may take to keep its coffers full.

A question that is arising with increasing frequency is: does expatraition offer a viable protection to those concerned about a more financially-intrusive US system?

The answer is ‘yes’, it does offer a completely legal solution for ending your obligation to pay US income, capital gains, and gift taxes on your worldwide income. But it is certainly not for everyone and should only be pursued after lengthy and diligent consideration.

And before you begin dreaming of a tax-free future, you should realize that the United States imposes taxes on a broader basis than any other country. The United States is one of two countries, and is the only major country, that imposes significant income, capital gains, gift, and estate taxes on its non-resident citizens.

In virtually all other countries, individuals end their liability to pay income tax after a sustained period of non-residence, generally one year or longer. But to legally and permanently end U.S. tax liability on their worldwide income, U.S. citizens must also give up their U.S. citizenship and passport. This process is called “expatriation.”

Yes, it’s a radical step. However, if you’re a U.S. citizen, you can make nearly all of the preparations for a possible future expatriation without permanently leaving the United States. This is a four-step process:

Phase 1. Relocate your assets from the United States to other jurisdictions, preferably where the assets won’t be taxed.
Phase 2. Identify foreign countries where you would consider living,
Phase 3. Obtain a suitable second passport
Phase 4. Expatriate – give up your U.S. citizenship and passport

Once you’ve accomplished the first three phases, summarized here in Part I of this report, the final step – expatriation – is much easier than if you’re starting from scratch. Part II of this report describes the expatriation process.

Are you a good candidate for expatriation? You are, if:

You are comfortable living outside the United States, or are already doing so-
Your spouse and children are comfortable living outside the United States, or are already doing so; and
You have already or are capable of shifting the majority of your income and assets outside the United States.

Phase 1: Relocate Your Assets Outside the United States

decisions about wealth and lifestyleWith a few exceptions, the IRC imposes taxes on both U.S. source income and foreign source income of U.S. citizens. Non-resident, non-U.S. citizens (also known as “non-resident aliens”) pay tax only on U.S. source income, although some U.S. sources of income (e.g., most capital gains) are tax-free.

To prepare for this more favorable tax treatment in anticipation of expatriation, begin moving liquid assets outside the United States to more tax-friendly jurisdictions. Begin selling assets that can’t be relocated (e.g., real estate) so that you may reinvest the proceeds overseas.

Invest only in countries and investments with which you are comfortable. If you are accustomed to buying and selling U.S. securities, consider using offshore bank or brokerage accounts to target non-U.S. securities. If you are an experienced real estate investor, investigate real estate purchases outside the United States. Keep in mind that a targeted investment or real estate purchase may also qualify you for legal residence in some countries (Phase 2) or even a second passport (Phase 3). If you have substantial domestic investments in precious metals, consider moving the metals offshore.

The vast majority of foreign banks and brokerages now refuse to accept new U.S. citizen clients, especially U.S. citizens resident in the United States. However, banks and brokerages in a handful of countries still accept new U.S. citizen and resident clients and allow them to purchase non-U.S. securities. A few banks in Austria, the Bahamas, Hong Kong, Liechtenstein, Singapore, and Switzerland are suitable for this purpose. The minimum deposits in these banks start at $100,000. Minimum deposits in offshore brokerages start around $5,000. Fees are much higher for banking services and securities trading than in the United States.

Both the accounts you hold offshore and the income derived from them must be reported to U.S. authorities. The penalties for failing to make these disclosures are draconian. Consult with an expert familiar with the tax and reporting rules for international investments when you file your annual tax return.

Offshore real estate is a non-reportable asset for U.S. investors if owned individually or jointly with your spouse or other individuals. Income or gain from foreign real estate investment is reportable and taxable. Countries offering first-world infrastructure and where real estate is relatively affordable include Argentina, Australia, Canada, Chile, Ireland, Mexico, New Zealand, Panama, Spain, and Uruguay.

Numerous potential “land mines” exist in offshore real estate investments. Among them are the lack of a multiple listing service in many countries, difficulty in establishing good title, and legal provisions giving squatters the right to live on your property. Retain a knowledgeable real estate attorney in the country in which you purchase real estate to avoid problems.

You may transport precious metals you own in the United States to another country and store the metals in a safety deposit box, bank vault, or private vault. One option for doing so is to use a secure shipping service. Make certain the service not only promises secure transport but also assists with completing non-U.S. customs and tax declarations. Another option to transport precious metals out of the United States is a like-kind exchange under Sec. 1031 of the IRC. If you move the metals yourself, the best option can be to hire an import agent in the country to which you’re taking them to handle the import formalities. You will generally post a bond through the agent covering taxes due (if any) plus the agent’s fee.

Phase 2: Identify Foreign Countries Where You Would Consider Living

big life decisionsOnce you give up U.S. citizenship and passport, you no longer have the right to live in the United States. You may generally make brief visits, but in most cases, you won’t be able to stay more than approximately four months annually without becoming subject to U.S. tax on your worldwide income based on the IRC’s “deemed residence” rules discussed in Part II of this report. Finding another country to live in is therefore an essential part of any expatriation exit strategy.

Even if you have no plan currently to leave the United States permanently, finding a country that you may wish to relocate to in the future is a prudent safeguard. If economic or political conditions deteriorate in the United States and reach your personal breaking point, having legal residence in a suitable offshore jurisdiction provides a valuable “insurance policy.”

If you merely want the right to live in another country in the form of a residence permit, but don’t necessary want to be physically resident there, a number of countries can accommodate your needs. These include Belize, Costa Rica, Malta, Mexico, the Dutch Caribbean territories, and Panama. In most cases, you can qualify for residence (although not the right to work in the country) by either making an investment or demonstrating a minimum guaranteed pension payment. Residence rights may be purchased in some countries by making an investment of $80,000 or more in real estate or other assets. A guaranteed pension payment of $1,000 or more may also qualify you for residence. In other countries, you may need to qualify on a points system. Some countries have multiple programs to consider.

Phase 3: Obtain a Suitable Second Passport

To end your responsibility to comply with U.S. tax and reporting obligations, you must give up your U.S. citizenship and passport. Without a second nationality in place and passport in hand, however, giving up your U.S. passport would render you a “stateless person.” Avoid this status, as it makes it difficult or impossible to legally live or travel internationally.

A second passport also conveys numerous other benefits:

It gives you the right to reside in the country that issued the passport, and possibly other countries. For instance, a passport from a member of the European Union conveys the right to live and work in any other EU country.
It gives you a way to travel internationally if your primary passport is lost or stolen, or if the issuing government confiscates or refuses to renew it.
It provides you with the opportunity to travel to countries blacklisted by the government that issued your primary passport. For U.S. citizens, this includes countries such as Cuba, North Korea, etc.
It avoids disclosing your primary nationality, should you ever need to keep that a secret. This can be useful if you’re ever confronted by militants who oppose the government that issued your primary passport.

You may qualify for a second citizenship and passport by ancestry, marriage, religion, or extended residence in another country. If not, a handful of countries offer “instant” citizenship in return for an investment or contribution. The Commonwealth of Dominica and the Federation of St. Kitts & Nevis are the only countries with an official, legally mandated, economic citizenship. (Note: Dominica and the Dominican Republic are different countries.)

Dominica is the least expensive option. The nationality law of Dominica authorizes the government to waive the normal requirement of seven years of legal residence to acquire citizenship in exchange for a cash contribution. Total costs including all fees for a single applicant come to about $105,000. Add $25,000 for your spouse and up to two children under 18. The Dominican passport holders can travel without a visa, or obtain a visa upon entry, to nearly 90 countries and territories.

The Federation of St. Kitts & Nevis offers two options to obtain economic citizenship. One option is to make a direct contribution to a charitable foundation set up to support displaced sugar workers: the Sugar Industry Diversification Foundation (SIDF). Total costs including all fees for a single applicant under this option come to about $285,000 or $335,000 for an applicant with up to three dependents.

The second option is to purchase “qualifying property” with a minimum investment of $400,000. Fees and closing costs add a minimum of $100,000. Total costs for a single applicant come to at least $500,000 and close to $600,000 for a family of four. The St. Kitts & Nevis passport provides visa-free entry, or visa upon entry, to more than 120 countries, including nearly all of the 27 member countries of the European Union.

In all cases, applicants must pass a strict vetting process that includes a comprehensive criminal background check.

Bogus second citizenship offerings abound. In recent years, I have received offers to purchase passports from Costa Rica, Nicaragua, the Dominican Republic, Ireland, and Lithuania, among other countries. Some of these offers are outright scams. Others involve illegally purchased or stolen documents. Even if you succeed in obtaining a passport on this basis, it may be revoked at any time and you could be subject to arrest and/or deportation.

Conclusion

Once you’ve completed Phases 1, 2, and 3 of your four-step plan to disconnect from the United States, you’re ready for Phase 4: expatriation. While you may never take the final step of giving up your U.S. citizenship and passport, taking the preparations summarized so far at least gives you that option.

Mark Nestmann is a journalist with more than 20 years of investigative experience and is a charter member of The Sovereign Society’s Council of Experts. He has authored over a dozen books and many additional reports on wealth preservation, privacy and offshore investing. Mark serves as president of his own international consulting firm, The Nestmann Group, Ltd. The Nestmann Group provides international wealth preservation services for high-net worth individuals. Mark is an Associate Member of the American Bar Association (member of subcommittee on Foreign Activities of U.S. Taxpayers, Committee on Taxation) and member of the Society of Professional Journalists. In 2005, he was awarded a Masters of Laws (LL.M) degree in international tax law at the Vienna (Austria) University of Economics and Business Administration.

Copyright © 2012 Chris Martenson

U.S. Child Poverty Up

Newly released data shows that poor families and children are being left behind as the benefits of a steadily growing economy fail to trickle down to their level. Congress is currently preparing to issue additional tax cuts and cut funding for programs that serve low-income children and families, just as these numbers come to light.

How can the Bush Administration and Congress can give enormous tax breaks to the wealthiest Americans who have benefited most from the economic recovery while threatening to cut the budgets for Medicaid, Food Stamps and other programs that assist poor children who continue to be left behind? Good question. So much for welfare reform or is this the new reform promised since the 1990’s?

Medical News Link

13 million children now living in poverty in the U.S.

In newly released data it appears that poor families and children are being left behind as the benefits of a steadily growing economy fail to trickle down to their level.

Congress is currently preparing to issue additional tax cuts and cut funding for programs that serve low-income children and families, just as these numbers come to light.

Marian Wright Edelman, CEO and founder of Children’s Defense Fund (CDF), says the persistent and growing high level of child poverty, reflects conscious and misguided choices.

She wonders how the Bush Administration and Congress can give enormous tax breaks to the wealthiest Americans who have benefited most from the economic recovery while threatening to cut the budgets for Medicaid, Food Stamps and other programs that assist poor children who continue to be left behind.

According to the CDF the number of children living in poverty in the United States now exceeds 13 million.

New health insurance data also released today serves to underscore the importance of maintaining these programs.

Apparently private health insurance coverage for children has declined since 2000, but because of the continued effectiveness of Medicaid and the State Children’s Health Insurance Program in filling coverage gaps, health insurance for children nationally has remained stable and even slightly improved.

But apparently there are still 9.1 million uninsured children in the U.S.

In 2004 more than seven out of every ten poor children had at least one employed parent, but that is not enough to lift families out of poverty, as even if a parent with one child works full time at the federal minimum wage, the family still lives in poverty.

Child poverty has risen significantly among all racial groups since 2000, and extreme child poverty increased by 20 percent from 2000 to 2004 to reach almost 5.6 million children.

Extreme poverty is defined as living with an annual income of below $7,610 for a family of three.

Edelman says that while far less wealthy industrialized countries have committed to end child poverty, the United States is sliding backwards.

For additional information, please read Defining Poverty and Why It Matters for Children in America available online.

A Federal Tax on Child Support

In 2005, Congress passed an act called the Deficit Reduction Act. The Act went into effect on October 1, 2007. On that date, the federal government began charging $25 per child support case brought by each state. The purpose of the fee is to help reduce the federal deficit.

The Child Support Blog 1/3/08

Tag Cloud