tag:blogger.com,1999:blog-1519969502186924526.post8396331145485474254..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Weird Deals That Even People / Governments Thought to be Rational Make (4/5/12)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-1519969502186924526.post-62193175469220164422012-04-07T12:48:59.405-05:002012-04-07T12:48:59.405-05:00My thinking went, do I just bend over and accept t...My thinking went, do I just bend over and accept the OVDI penalty, or do I pay a lawyer to help me, so that (hopefully!) the lawyer saves me more in penalties than I paid the lawyer?<br /><br />To put it another way, if it costs me $20K in legal fees to reduce my FBAR penalty to $10K, I'm paying $30K total. If the IRS weren't threatening huge penalties and made it clear that they would take 20K, I would be better off by 10K and the IRS would be better off by 10K.<br /><br />Instead, they've created a situation where it pays for people with good facts and even moderate size accounts to opt out.<br /><br />This is just a mathematical example that has nothing to do with my situation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-16643240934517818632012-04-06T10:54:36.986-05:002012-04-06T10:54:36.986-05:00In the U.S., lawyers are making hay while the sun ...In the U.S., lawyers are making hay while the sun shines. Lawyers are charging 10 to 15 K for submitting OVDI packages for people whose tax liability is less than that amount. The Asian Indian body GOPIO raised the issue of lawyer expenses incurred by minnows as a concern. Its a win win for IRS as lawyers income is taxed as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-38772473796300872852012-04-05T22:46:55.778-05:002012-04-05T22:46:55.778-05:00UK already signed a similar deal with Switzerland ...UK already signed a similar deal with Switzerland and also Liechtenstein. You can check out the UK Liechtenstein Disclosure Facility at none other than LGT Bank as in that LGT Bank.<br /><br />http://www.disclosure-facility.co.uk/en/index.html?DCSext.nav_type=5Timhttps://www.blogger.com/profile/03894651289037073128noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-49503473792031102022012-04-05T22:09:56.232-05:002012-04-05T22:09:56.232-05:00I didn't do a good job above. My main point i...I didn't do a good job above. My main point is that the German flat tax on investment income reduces the need or incentive to obtain further information about the owners. Furthermore, Switzerland agreed to make a significant payment to Germany to make up for past years of nonreported income.Expat Bratnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-52716390476946924792012-04-05T21:43:11.259-05:002012-04-05T21:43:11.259-05:00This kind of deal does not surprise me. Not too l...This kind of deal does not surprise me. Not too long ago, tax evasion was a sport in Germany. The tax rates were quite high (excessive), and there was a wealth tax, prompting wealthier folks to try to hide their savings. Lots of older Germans, the ones who vote for the current CDU/FDP government, have unreported accounts in Switzerland, Austria, you name it. But today, the wealth tax is gone and the rates have come down as well.<br /><br />Furthermore, the current German system also implements withholding at a flat rate after you have exhausted a minimal exemption amount (Sparerfreibetrag) of about EUR 800 a person. So, the Swiss deal seems similar to the current German system. There is less incentive to cheat now in Germany, because investment income is taxed at a flat rate of ca. 26%. For wealthy persons whose ordinary income is taxed at rates higher than the maximum US rate, this is a good deal. Unless your effective income tax rate is lower than the withholding rate, you do not need to file a detailed list of investment income, because the income does not affect your overall tax rate/burden on other types of income. (Flat tax -- at least this is my understanding of how the system works.) <br /><br />The opposition Greens and SPD (both on the left) have been in the news, vocally criticizing the deal. They still want to go after the cheats. The deal may fail in the Bundesrat (upper house).Expat Bratnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-18663407366214395782012-04-05T16:36:35.635-05:002012-04-05T16:36:35.635-05:00Personally I would have preferred a percentage of ...Personally I would have preferred a percentage of untaxed income. In my case the principal was taxed, but I did not report passive interest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-47923730967721611872012-04-05T16:26:53.287-05:002012-04-05T16:26:53.287-05:00Anonymous z - that is what I said some time ago / ...Anonymous z - that is what I said some time ago / IRS should have just taken a percentage of the Capitol, no forms, 8 years of hellish paperwork, and sheer mountains of confusion/guesswork on our part etc etc. Can they do it even now?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-72001450097576868092012-04-05T15:49:26.993-05:002012-04-05T15:49:26.993-05:00To me it doesn't seem any "weirder" ...To me it doesn't seem any "weirder" than the European Savings tax directive whereby EU residents can choose to either have their interest income revealed or have tax withheld at the source and the funds sent anonymously by the Swiss banks to their home countries. <br /><br />The difference of course is that this is now a tax on capital, not interest.<br /><br />Seems like a win-win deal. German gov't gets a tax on ALL German-held accounts, not just those who disclose. German individuals pay a tax on their capital, without spending money on lawyers and accountants, plus LCUs, like those in OVDI.<br /><br />Had the US done something like this they would have gotten something on all (or most) US depositor's money in Switzerland instead of only from those who chose to disclose (apparently a tiny percentage of the total.) All without the man hours that all these optouts and audits will require on the part of the IRS.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-76811262088824290762012-04-05T15:14:21.167-05:002012-04-05T15:14:21.167-05:00That is why i respect European human rights attitu...That is why i respect European human rights attitude and mentality. IRS/DOJ could have made a similar deal and get their fair share, but NO, they wanted to make 30K people miserable for 3 years inside OVD programs.Anonymousnoreply@blogger.com