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When Government Turns Predator

Apr 5

Posted by ImpeachCongress in Abuse of Power, Legal Actions, Opinion | No Comments

The following article covers an area of gross government tyranny. Offshore banking. The overreach of the government and particularly their nazi force, the IRS, has become so egregious that simply opening a bank account overseas is viewed as a crime. Monty points out precisely that this bankrupt and broken government will stop at nothing to steal the wealth of its productive citizens. It is disgraceful. –impeachcongress

By: Monty Pelerin

Honest US citizens are being turned into prey by the IRS, the victims of a hunt for tax evaders. It is the natural, if lamentable, product of the urge to power our Founders warned us against.

More than two centuries ago, George Washington stated:

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

Over the years, General Washington’s prescience has been demonstrated as government usurped and abused power. The myth that government serves the people should be shattered by now. Increasingly, government behaves as the master, not as the intended servant.

Oppression abounds, but nowhere is the raw abuse of power and coercion more possible and evident than in the Internal Revenue Service. They are the most dangerous member of the government gang. Now they have another tool to bully and expropriate wealth from innocents — US citizens living abroad.

Early in his presidency, Barack Obama pledged to add 800 new IRS agents to punish tax evaders with overseas accounts. In an effort, presumably designed to curtail and punish tax evasion on the part of wealthy Americans, legislation aimed at criminals now threatens the income and savings of the law-abiding.

Background

The Bank Secrecy Act became law in 1970 and implemented the Foreign Bank Accounts Report (FBAR) to monitor money laundering. The FBAR law required that US persons owning or having signing authority over foreign bank accounts report this information to the US Treasury Department. It was not much enforced for the obvious reason that a criminal does not willingly divulge incriminating information. During the first three decades of FBAR, there was widespread ignorance and disregard for the law.

In 2003, the Treasury Department handed over enforcement to the IRS. In 2004 non-willful non-compliance increased to a $10,000 fine per account per annum. Willful non-compliance allows criminal charges, a prison sentence, and fines of $100,000 or 50% of bank account’s contents, whichever is more (see Shepherd, p. 10).

The IRS has implemented two Voluntary Disclosure Programs I (2009) and II (2011), in which they waive criminal charges provided that all back taxes and penalties have been paid, along with an FBAR penalty of 20% (in 2009) or 25% (in 2011) of the account’s highest balance over the last six years. The penalty is lower (12.5%) for balances under $75,000. Persons who were unknowingly US citizens face a 5% penalty (see FAQ 52).

In 2010, Congress passed FATCA (Foreign Account Tax Compliance Act) which forces foreign banks to report on American clients, even if doing so would violate the banking and privacy laws of their country. Implementation of FACTA will be coerced by withholding 30% of US income from banks not in compliance.

The arrogance and brutality of the legislation is apparent. The penalties are severe and disproportionate. Economic blackmail of foreign banks is disgraceful. All of these actions will have repercussions, probably not intended.

US Citizens Abroad

US citizens living abroad must open a foreign bank account because commerce is done in the local currency. All who do are potentially in violation of the FBAR law. Most were unaware of the FBAR requirements; but now that the IRS has rattled its FBAR saber, taxpayers abroad are in a quandary.

Wealthier citizens spend thousands of dollars on accountants and tax lawyers to try to put themselves into compliance with the least financial damage. The average citizen not in compliance has limited options. His choices include:

  1. Do Nothing The IRS doesn’t know about you, so continuing to keep a low profile and ignore the law might be the best route. This option may become impossible once FACTA comes into force.
  2. File FBAR Forms IRS FAQ 17 of the 2011 Voluntary Disclosure Program states that filers who have complied with all taxes and filing requirements except FBAR should not enter the program but simply file the delinquent forms by August 31, 2011 with a letter of explanation. They promise that no penalties will apply to such persons. But given the severe threats of punishment issued to anyone failing to comply, many wonder whether the IRS will accept the excuse of ignorance of the FBAR requirement.
  3. Enter 2011 Voluntary Disclosure Program: Some US citizens who entered the 2009 Voluntary Disclosure Program and were otherwise in compliance with US tax laws, found that the IRS intended to apply to them the full 20% penalty (see, e.g., here and here).
  4. Renounce Citizenship Many US citizens living overseas have lives fully integrated into their new country. They comply with the local tax laws and often possess dual citizenship. Compliance with US tax laws and FBAR are a nuisance and liability that they may be able to live without.

Renunciation of citizenship is not riskless. Such a decision will set citizens free from future liability, but may subject them to IRS penalties for prior non-compliance. In addition, for covered expatriates, those having two million in assets or $145,000 in average annual tax liability over the last five years, an exit tax is also required.

To appreciate the uncertainty and duress faced by US citizens living abroad, a couple of hypothetical situations are useful. International tax lawyer Phil Hodgen partly inspired the following hypothetical cases:

Hypothetical Case 1: Jim lives in a foreign country and has dutifully filed a US income tax return each year, but was unaware of FBAR filing retirements. Jim operates eight accounts: four retirement accounts (which he reported on his annual tax returns), two trading accounts, a checking account and a high interest savings account. The highest balance in these accounts is $1,000,000 over the last six years. His current balance is $800,000 after the market dip.

Jim doesn’t know what to do. After great worry, he enters the Voluntary Disclosure Program. The IRS assesses Jim a $250,000 FBAR penalty. In order to pay the penalty, Jim must withdraw funds from his retirement accounts forcing an additional tax liability of $100,000 on the income. Jim is no longer able to retire because his $800,000 has been reduced to $450,000, solely as a result of IRS capriciousness.

Hypothetical case 2: Nancy is a teacher and mother of three, married to a citizen of the foreign country where she has lived for fifteen years. She dutifully filed her taxes in the US, but never knew about FBAR. A friend entered the Voluntary Disclosure Program and was assessed $14,000. She contemplates the renunciation of American citizenship, because her foreign husband owns a successful business and Nancy is a signer on business accounts. She fears exposing her husband’s business to the IRS and also fears that upon her death, the IRS will seek its pound of flesh from her estate. She renounces citizenship, though it breaks her heart.

Abuse Of the Law

FBAR was initially a harmless and little known embarrassment for the United States. It began as an ineffective attempt to stop money laundering. Like so many other laws (RICO, Homeland Security, etc.), it began with what some believed noble purposes, only to morph into a tyranny imposed upon law-abiding citizens. It is now a tool capable of arbitrary and oppressive expropriation the wealth of millions of US citizens living abroad.

An insolvent government is a dangerous government. It is akin to a wounded and cornered animal. When conditions become really difficult, it is likely to do anything to survive. Arbitrariness in the interpretation of any law is dangerous to freedom, but especially so when government’s primary concern is survival rather than justice.

There are many reasons to be critical of FBAR. The following two will illustrate:

Do Republicans Want the White House?

Apr 4

Posted by ImpeachCongress in Conservatism, Opinion | No Comments

By: Lee Cary

We Americans live in a political era when it’s reasonable, perhaps even prudent, to consider the unthinkable.

Before the election of Barack Obama, most Americans were unable, or unwilling, to consider what his campaign promise to “fundamentally transform” the nation might mean. Before his election, those who used the word “socialism” to refer to his intentions were chided for being too extreme. (A longtime friend of mine said I’d “gone over the edge” in using such language.)

Not until Newsweek published a February 2009 article entitled “We Are All Socialists Now” did the word become widely acceptable, if used benignly.

The litany of previously unthinkable events that have unfolded since then, most recently including our role in Libya, don’t need listing here. The hits just keep on comin’, with no let-up in sight.

For example, when Fox Nation recently reported that former Clinton administration official Jamie Gorelick is on the short list to be the next director of the Federal Bureau of Investigation, we weren’t shocked; we’ve grown accustomed to the unthinkable.

The New Socialist Democrat Party is now fully engaged in a relentless pursuit of what was, throughout the 20th Century, an intermittently-enacted, comprehensive, progressive agenda. The Tea Party Movement (TPM) emerged as a wrench, perhaps not unexpectedly but with unanticipated energy, tossed into the progressive machine. Consequently, über-progressive Democrats, like Senators Harry Reid and Chuck Schumer, simply label the TPM based on their experience of it. Anyone, or anything, that gets in their way is, by definition, “extremist” — a label used by tyrants, big and small, throughout history to refer to their opponents.

Jump now to the 2011 budget battle underway in the House and Senate, with a focus on the House where scores of new members of Congress arrived, metaphorically carried on the shoulders of Tea Partiers.

Before the paint was dry on their office doors, speculation began as to whether they would be change agents and fundamentally transform the new Republican majority in the House, or merely conform to the well-entrenched good-ol-boy principle of go-along-to-get-along.

We’ve heard it said that the best tactic of House Republicans with regard to the 2011 budget is to compromise on cuts by backing off their promise to cut $100 billion from the remainder of this year’s federal expenditures, so as to save their powder for the bigger battle over the 2012 budget.

Already it sounds as though the House Republican leadership is justifying the need to avoid a government “shut-down” — which actually isn’t a shut-down — by meeting Democrats part way. “Compromise” is in the D.C. air, while TV pundits speculate over which party would be blamed for any potential “shut-down.” (Talk concerning who could gain the credit for a shut-down is, on the other hand, conspicuous by absence.)

The “narrative arc” — words Senator Obama liked to use during the campaign — suggests that Speaker John Boehner will successfully cobble together a consortium of Republicans, perhaps excluding many of the newly elected members, along with moderate Democrats, meaning those Dems who want to be re-elected to their conservative-leaning districts in the next election.

At the end, the more progressive House Democrats will agree to insignificant 2011 budget cuts they’ll say are necessary to placate the cold-hearted Republicans whom they’ll accuse, with crocodile tears, of caring little for the poor, the elderly, the children, and the puppies. And that hollow metallic sound we’ll hear will be the infamous can being kicked further down the road.

If this happens, conservatives in sympathy with the TPM, whether or not they ever attended a public gathering, will conclude this: The House GOP leadership caved to the Democrat minority because they care more for their careers than for the nation.

Already, the major meme voiced among House Republicans pushing a compromise is that, after all, they only control one-half of one-third of the federal government. (Imagine where we’d be if General George Washington at Valley Forge had said, “We only control a few thousand soldiers, so let’s compromise with the British.)

If this is how the 2011 budget battle plays out, we’ll have at least two ways to interpret it.

Conventional wisdom will say that Boehner and the Boys were careful to avoid blame for shutting down the government a la Newt Gingrich v. Bill Clinton in 1994-95. A shut-down would have weakened their position in the upcoming 2012 budget battle. (It’s hard to see how surrendering in a small battle before a bigger one yields strength to the loser.)

But since this is the era when it’s reasonable, perhaps even prudent, to think the unthinkable, let’s suppose Boehner and the Boys do understand both the message and power of the TPM, and they’d rather not have it so closely aligned with the GOP going forward. Why? Because they fear the “extremist” label being applied to them.

Furthermore, let’s think this unthinkable: that the GOP’s primary goal in 2012 is to win the Senate, not the White House. And, given a choice, they’d choose the Senate. To that end, the House Republicans’ willingness to negotiate an agreement with the Democrat-controlled Senate on the 2011 budget could eventually be cited as evidence of the GOP’s ability to work cooperatively with a Democrat minority in the Senate, and, yet, temper the progressive initiatives likely to emerge out of a second term Obama White House.

The answer to the question — Do Republicans want the White House? — might be this unthinkable: No. Here’s why: If the GOP controls both the legislative and executive branches after 2012, when the inevitable economic axe falls on our debt-ridden nation, they’ll suffer the blame that will automatically befall the party of the incumbent Chief Executive.

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Perceptions of America

Apr 4

Posted by ImpeachCongress in Immigration, Opinion | No Comments

By: David P. McGinley

Since 9/11, one of the big concerns of America’s ruling class is what the rest of the world thinks of the United States — hence the lamentation of “why do they hate us?” In fact, one of President Obama’s goals when taking office was to change the world’s perception of America. Of course, the ruling class is worried about only what its elitist counterparts think, not your typical citizen of another country.

So what does that typical citizen think?

Since moving abroad last year, I have gained some insight into answering this question. One recent discussion with one of my law students was quite illuminating. The student, who is from Cambodia, complained to me that the U.S. government was going to deport a Cambodian national who had been permanently living in the U.S. for over twenty-five years. The prospective deportee had moved to the U.S. in the 1980s to escape the communist killing fields of the Khmer Rouge. In those twenty-five years, he never bothered to become a citizen.

Recently, the man in question was convicted of committing a felony. Suddenly, the place to which he had fled that saved him from being massacred, the place that has provided him with a level of personal liberty nonexistent in his place of birth — even before the Khmer Rouge — is supposedly treating him unfairly.

When I questioned my student as to why, during those twenty-five years, the felon did not become a U.S. citizen, my student, quite matter-a-factly, “Because [the felon] was Cambodian.” So, I asked, since the felon considers himself a Cambodian, why does he have a problem with being deported back there? My student responded that the felon had been gone too long and no longer knew the culture. So this felon considers himself Cambodian and therefore does not want to become an American citizen, but he also does not want to return to Cambodia — and the U.S. government should accommodate him.

I then asked the student whether the government of South Korea (where I am currently teaching law) has the right to deport me if I commit a felony (or for any reason, for that matter). The student had no problem answering “yes” and added that “Korea is for the Koreans!” I then asked, “Whom is America for?” He did not answer.

This exchange came as a revelation to me. My student essentially alleged that the United States is there for his (i.e., the world’s) benefit if and when he needs something. Korea is for Koreans. Cambodia is for Cambodians. But America must be for anyone and everyone. Korea and Cambodia have the right to keep you or kick you out, but America does not.

This perception, while problematic at times, is not all bad. America has always been a beacon for the oppressed. It is a source of hope for millions. While most will never make it to her shores, America’s very existence is a comfort of possibilities: as long as America stands strong, a better life is possible.

But the perception typified by my student certainly is not all good, either. It presumes that America should expect nothing in return. It also presumes that the world gets to dictate what America can and cannot do. Thus the deportation of even a convicted felon is unfair. How dare America have her own laws, her own sovereignty?

Most of Europe views America, especially her military, in the same way. For the past sixty years, Europeans have looked down their noses at America for its large defense budget. However, Europe gladly accepted and relied upon U.S. protection during the Cold War while spending little to nothing for its own defense. Instead of being grateful, Europeans maintain a faux moral superiority. Of course, it’s easy to be “anti-war” when someone else is willing to fight your battles. Nonetheless, when the U.S. goes to war for her own self-interest, Europe, cozy in the safety not of its own making, preens with jilted outrage. America must protect Europe, but Europeans think they should get to decide when America can protect herself.

America’s immigration issues are tainted with this same perception, especially concerning arguments made in support of illegal aliens. Not only, as the arguments go, should the illegals be allowed to stay, no questions asked, but they also should have access to all the benefits of citizenship. And this is not a request or desire; it is a demand (a “right”). Thus, America’s laws are to be ignored, but her benefits must be administered, with the American taxpayer footing the bill. Everyone who crosses into America’s borders has a right to America’s largesse, but America has no right to ask for or expect anything in return — not even that her own laws are followed.

In a sense, America does belong to the world. For centuries now, America has been a place where the rest of the world’s people have come to get away from the rest of the world. Lately, however, the rest of the world have asked (demanded) only what America can do for them. Well, America and most of her citizens do more than enough. How about doing your part?

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