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Are You a California Resident?

Are You a California Resident?

Many people believe that as long as they are outside the state of California for six months and a day they are not residents of California. And thus don’t have to pay California’s high income taxes. But the state of California is both broke and arrogant. And they make the rules the way they want.

Design Your Asset Protection Plan

Design Your Asset Protection Plan

You design a lot of things in your life. The layout of your house, the flow of your business, the requirements on your children, and many more scenarios are all elements of conscious design. Asset protection is no different. There is an architecture, a cohesive...

Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

The Short-Sighted End of Offshore Banking

By Garrett Sutton

Facing government resistance at every turn and increased costs of doing business, foreign banks are now ever more hesitant to operate in America.

Compliance costs for handling U.S. accounts are already so high that many banks are simply refusing to open new accounts for U.S. individuals. If HR 4213, which passed the House of Representatives in December 2009, is approved by the Senate in the coming weeks even more banks will terminate their U.S. clients. The bill, the Foreign Account Tax Compliance Reporting Act (or FATCAT), will essentially close the door to many foreign banks. There’s more…

Coming to a tax haven near you: The IRS Criminal Investigation Division is opening offices in a dozen foreign countries. The disgruntled banker in Switzerland or Panama who wants to provide offshore banking information to the IRS can now just walk into their local IRS office. The informant commission incentives are there – but they are to be questioned.

UBS banker Bradley Birkenfeld turned IRS informant and brought his Swiss bank to the brink with the IRS and U.S. Department of Justice. The case, which was recently featured on 60 Minutes, was egregious. UBS bankers were flying to America to recruit and assist U.S. citizens in evading their U.S. tax obligations. Did Birkenfeld get millions for his whistleblowing activities? No, the Department of Justice found fault in a related matter. So not only is Birkenfeld out his bounty but he is serving a 40-month prison sentence. No one else in the entire UBS scandal is serving one day of time. Just the informant. One wonders how many potential whistleblowers will actually show up at these new IRS offices.

Still, the IRS is expanding its reach. It has joined the Joint International Tax Shelter Information Centre. The U.S., Australia, Japan, Canada and Britain are coming together to conduct simultaneous tax audits of wealthy individuals. So not only will an audit mean your U.S. activities are questioned, but those activities in all the aforementioned countries may also be scrutinized. Now Americans will get to see how IRS audit agents stack up against their British and Japanese counterparts.

Is all of this a good thing?

We have been suspicious and even critical of offshore banking for years. But the one positive aspect of it all cannot be denied. These institutions place and manage a great deal of non-U.S. money into the U.S. stock market. They trade and hold U.S. dollars. But with compliance costs so high, and the challenge of greater regulations on the horizon, these banks are now and will be pulling their money out of the U.S. At a time when we need as much liquidity as possible, beating up on offshore banks may prove costly to America in the long run.

Are You a California Resident?

Are You a California Resident?

Many people believe that as long as they are outside the state of California for six months and a day they are not residents of California. And thus don’t have to pay California’s high income taxes. But the state of California is both broke and arrogant. And they make the rules the way they want.

Design Your Asset Protection Plan

Design Your Asset Protection Plan

You design a lot of things in your life. The layout of your house, the flow of your business, the requirements on your children, and many more scenarios are all elements of conscious design. Asset protection is no different. There is an architecture, a cohesive...