Watch Out For This Pet Project of Obama Tax Plan
Pres-Elect Obama has a pet project. Well, he probably has quite a few, but this one could really impact taxpayers, especially business owners and investors. It’s called the Levin-Coleman-Obama Stop Tax Haven Abuse Act. On the surface, that sounds good. But read on if you EVER plan to live or buy or otherwise do business outside of the US.
This Act starts off by stating that there will now be a presumption of GUILT if any American owns part of or sends money to any company within one of the 34 so-called Tax Haven countries. If hope you noticed that sends money to because just wait until you read who the countries are.
Some you’d expect like the Bahamas and the Caymans. But look at the rest on the list: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Cyprus, Dominica, Gibraltar, Grenada, Guernsey/Sark/ Alderney, Hong Kong, Isle of Man, Jersey, Latvia, Lichtenstein, Luxembourg, Malta, Nauru, Netherlands Antilles, Panama, Samoa ,St. Kitts and Nevis, St. Lucia St. Vincent and the Grenadines, Singapore ,Switzerland, Turks and Caicos, and Vanuatu.
If you make any transfer it will be presumed that the amount transferred is unreported income and you will be taxed, penalized and possibly even found guilty of fraud. It’ll be up to you prove they are wrong. (This is a very tough standard.) Banks and other financial institutes will be required to report any suspicious activity to the IRS.
Failure to follow these rules could mean 150% penalty and up to $1 million per incident in fines.
You can read the details of this Act at http://levin.senate.gov/newsroom/release.cfm?id=269479.
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Wow! I read. through the press release and then through the text of the Bill. It was pretty onerous. And I saw a portion in the bill that would require some disclosure on the part of formation agents. That reminded me of another Bill that Pres. Elect Obama was a part of, except it was pushing for disclosure for U.S.-based companies.
Between this, and the exit-tax introduced last year, it sure is beginning to feel like the fences are moving inwards. This legislation may have been conceived with curbing Wall Street abuse in mind, but it’s certainly going to impact many other people as well.
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Megan Hughes
www.businessfirstformations.com
Last week, my business had its best month ever.
The part that really concerns me is the presumption of guilt clause.
In other words, if you are audited or, worse yet, Homeland Security shows up, you have to prove you’re innocent. That’s a very tough standard.
I agree. So much for the constitutional protection of innocent until proven guilty. As an attorney who advises clients regarding asset protection strategies, it is particularly distasteful to see legislation of this nature. There are legitimate asset protection strategies that utlize offshore entities, and have no tax implications whatsoever. Once again Congress is using the sledgehammer to kill the fly. While there is certainly abuse in the offshore arena, this feels like the teacher who kept the entire class after school because one student misbehaved! (Or was I the only one who had that teacher! LOL!!)
Karen
Give Yourself a Gift
America Living Will Registry
www.alwr.com