Further To End of Private Banking – Can’t a man get a little privacy?
While the World Economic Forum has taken up pages of the world’s leading business press another far less reported conference took place in San Antonio, Texas. Hosted by the American Bar Association, the conference laid out the plans of the US Department of Justice (DOJ) and US Internal Revenue Service (IRS) in their ongoing battle against privacy and competitive taxation.
The consensus is truly worrying: the UBS and Swiss Financial Markets Association’s divulging of private client information to the USA (which has since been ruled illegal by the Swiss courts and about which I have written here before), Tax Information Exchange Agreements, blacklists and economic blackmail are all just the start of this concerted effort to stop individuals benefiting from employing competitive jurisdictions for business and investment.
Some items of note were the new “Joint International Tax Shelter Information Centre”.
Tax departments from Australia, Canada, Japan and the UK are ganging up with the US IRS to conduct what the IRS calls “holistic taxpayer analysis“. This rather flowery name hides what can only be described as multi-lateral state sponsored invasion of privacy and entails a thorough scrutinizing of all personal and business holdings and interests of the individual in each and every jurisdiction simultaneously. This coincides with the opening of 11 new international IRS offices around the world, with Switzerland and Panama already earmarked as 2 countries to get their very own branch of the US tax office!
The UBS saga began primarily with a tip off from a disgruntled former UBS employer, Bradley Birkenfeld. I imagine the proximity of these new IRS offices is to encourage just that sort of behaviour. Some food for thought, however, for anyone who feels they would like to pop in and have a chat with their new local IRS branch: Birkenfeld has been sentenced last month to over 3 years imprisonment for his help.
I have written before that a swiss banker that I know, no longer takes US citizens as clients as it is too much effort. Well, new legislation which is being enacted currently by the US government with the wonderful acronym of FATCAT, seems designed to spread this sentiment by making it totally cost prohibitive for almost all foreign banks to hold US owned accounts, Though the Foreign Account Tax Compliance Reporting Act (FATCAT) which should enter in to US law in the next few weeks, may also have the unwanted effect of stopping or curtailing foreign investment in to the US markets as compliance cost rise for international brokers and investment groups, One could argue this could be counter productive however much extra tax revenue is raised, as the US economy struggles out of recession and the Dollar remains weak, is a further drop in demand for the currency, US stocks or treasury products what is wanted or needed by the US taxpayer, sovereign wealth funds or international investors alike??
John Fry.
John is the Business Development Director of Formcos-Russia a unique trust company offering trust and tax planning services internationally from Moscow.
February 23, 2010 at 05:27
Just a little note to help keep people from scammers on this forum. Sam Congdon is an offshore promoter who has ruined many people’s lives by selling them offshore packages and then turning them over to the FBI and IRS. This guy runs two companies by the name of Rockford Global Solutions and Equity Development Group. His clients have lost millions at Bank Crozier in St. Lucia and Grenada (google failures and how FBI seized banks) as he was in on a sting operation with the FBI. He has also testified for the Senate Finance Committee on his operations and given up his U.S. based account holder list to all legal authorities including the IRS. You should not do business with him or any of his companies unless you want to come under U.S. scrutiny. Your life will be turned upside down if you try to get offshore acounts from him – Don’t Do It!
May 1, 2010 at 12:10
Have you considered this could be a trap and that Sam Congdon is infact (at some level, either agent or grass) an IRS or FBI operative, we are positive that Russian agents are working in the banks and trust companies in Switzerland and Cyprus keeping an eye on any holdings that could be traced to a Russian citizen so they are probably working elsewhere too.
Would it be too much of a leap to imagine that uncle sam might try a similar tactic