“Pay Your U.S. Income Tax Day” falls on April 17th this year.
That’s because the usual tax collection day of April 15th is a city holiday in Washington, D.C. where the headquarters of America’s beloved Internal Revenue Service is located, just a few blocks down Constitution Avenue from the U.S. Capitol where our delightful tax laws, loopholes and all, are manufactured by the politicians.
Each year, well before the coming of spring, the professional fear mongers at the IRS launch their annual campaign to scare the American public with a barrage of press releases starting soon after New Years.
This careful timing is to coincide with the first three months of the year when folks are working on their taxes or having them done by accountants. Because tax prosecutions are relatively rare, an unquestioning news media dutifully picks up the IRS press releases and runs them with headlines.
These press releases are more than just friendly “please file your taxes” reminders. They brag about IRS convictions of an assortment of alleged tax evaders, the point being – it could be you next.
Publicity Scare Value
Criminal prosecutions for tax evasion are only worthwhile to the IRS because of the publicity they get. These cases take a long time to prosecute and cost the IRS far more in time and effort than the added penalties they collect. In a criminal prosecution, the IRS must prove to a jury that the accused taxpayer knowingly and willfully failed to pay taxes. As I recently told you, sometimes ignorance of the law is a defense against not filing tax forms.
The IRS claims there are “trillions offshore” in unpaid taxes. This is part of a larger IRS “numbers game” that has gone on for years.
When he quit in 2002, then IRS Commissioner Charles O. Rossotti claimed the IRS had identified 82,100 taxpayers using offshore accounts to evade taxes. He also estimated the government lost US$447 million when tax evaders failed to pay their share. That’s less than US$7,000 per taxpayer.
But only a year earlier, in 2000, under Rossotti, the IRS estimated that 505,000 taxpayers were using offshore bank accounts to evade taxes (about 400,000 more than Rossotti said two years later).
By early 2002, the IRS upped that number to two million. It was the same Commissioner Rossotti who, in May 2001, demanded federal court subpoenas for offshore credit card records. In 2001, he claimed offshore tax evasion was costing the government US$20 billion to US$40 billion in 2000 alone!
Meanwhile Jack Blum, a Washington lobbyist and paid IRS propagandist on tax evasion issues, claimed offshore tax evasion cost government US$70 billion annually.
Not to be outbid, U.S. Senator Carl Levin, upped that fiction, claiming that the IRS loses $100 billion annually to offshore tax evasion. (I long ago exposed the fraud in such numbers).[adcode]
IRS Dirty Dozen
It is now an IRS annual tradition to trot out its annual “‘Dirty Dozen” list as the centerpiece of its annual scare campaign. The list contains the top 12 worst tax frauds du jour as seen by the IRS.
Once again this year the IRS puts offshore financial activity on the list – under the heading: “Hiding Income Offshore.”
The IRS claims that “over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.”
When pressed, the IRS does admit that it is legal for Americans to have offshore bank accounts, credit cards, investments and businesses.
Persecution by Reporting
There is indeed, a tangled web of U.S. tax reporting requirements, made even more obtuse by President Obama’s Foreign Account Tax Compliance Act (FATCA) that begins on Apri1 17th with the filing of the new IRS Form 8938.
But at the moment all bleary eyes are on IRS Form 1040, the income tax form.
As you wade through your tax paperwork, I leave you with a reminder of the famous Biblical admonition from Jesus: “Render therefore to Caesar the things that are Caesar’s; and to God, the things that are God’s.”
Many Christians have traditionally interpreted that famous passage to mean that Jesus endorsed paying taxes. For an interesting essay that holds that these words do not stand for the proposition that there is a moral obligation to pay taxes, go here.
Be that as it may, there is a legal obligations to pay taxes, and for Americans it is only days away. Good luck!
On This Day, the Market Will Crash
What would you do if you knew the exact date of the next stock market crash? This may sound absurd to you, but we’ve recently uncovered details of an event that will cause the next crash.
Everything you need to know is buried inside a little-known government document called FT-900. It reveals when the next crash will occur.
This controversial new video reveals the timeline of this event and the four simple steps you need to take immediately in order to protect your wealth and your family.
But hurry … this event is only months away (at most).