S 506 – Stop Tax Haven Abuse Act 03/04/09

Executive Summary – Obama in his overall wisdom based on his extraordinary long political career and track record has decided to enter into economic terrorism against 34 countries in the name of collecting taxes. Obama is broke and he is fighting hard to put off the inevitable breakdown of civil order in the USA and now he is looking for a scapegoat. The reckless spending of the USA has caused the problem with their fiat money supply, not the offshore tax havens. An attack on the Federal Reserve Bank would be correct.

They make all this money form nothing and are tax exempt and he goes after tax havens, a joke. We think this is a flawed piece of legislation that if passed would quickly serve to hurt the USA economically in the immediate future. Please remember this is not passed legislation, just proposed legislation.

That being said we will cover some of the main points of this so the readers can execute plans fast to avoid being caught up in this. This will only affect those that are USA citizens or living there or operating a business in the USA or banking in the USA. All others can ignore this legislation.

Exemptions – Lets start off with the corruption. The bill exempts: “an entity with shares regularly traded on an established securities market”. Obama will not go after his wealthy supporters. First off we can supply you with a publicly traded corporation on the Guatemala Stock Exchange signed sealed and delivered out the door, taxes and license for $100,000. They have some clause about the assets being $50,000,000. Well the assets could be estimated to be this and what are they going to do audit and research every publicly traded company. This would be a seasoned corporation. So you too can buy yourself out of his legislation like a Wall Street Corporation. The ownership and control of such a corporation can be done via trusts, anonymous corporations, foundations, holding structures and many other ways – no worries.

Presumptions – Let us look at this deviation from probable cause and the constitution. Please bear in mind desperate governments take desperate measures. Actual text follows:

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Control- For purposes of any United States civil judicial or administrative proceeding to determine or collect tax, there shall be a rebuttable presumption that a United States person (other than an entity with shares regularly traded on an established securities market) who directly or indirectly formed, transferred assets to, was a beneficiary of, had a beneficial interest in, or received money or property or the use thereof from an entity, including a trust, corporation, limited liability company, partnership, or foundation (other than an entity with shares regularly traded on an established securities market), formed, domiciled, or operating in an offshore secrecy jurisdiction, exercised control over such entity. The presumption of control created by this subsection shall not be applied to prevent the Secretary from determining or arguing the absence of control.

`(b) Transfers of Income- For purposes of any United States civil judicial or administrative proceeding to determine or collect tax, there shall be a rebuttable presumption that any amount or thing of value received by a United States person (other than an entity with shares regularly traded on an established securities market) directly or indirectly from an account or entity (other than an entity with shares regularly traded on an established securities market) in an offshore secrecy jurisdiction, constitutes income of such person taxable in the year of receipt, and any amount or thing of value paid or transferred by or on behalf of a United States person (other than an entity with shares regularly traded on an established securities market) directly or indirectly to an account or entity (other than an entity with shares regularly traded on an established securities market) in any such jurisdiction represents previously unreported income of such person taxable in the year of the transfer.

`(c) Rebutting the Presumptions- The presumptions established in this section may be rebutted only by clear and convincing evidence, including detailed documentary, testimonial, and transactional evidence, establishing that--

`(1) in subsection (a), such taxpayer exercised no control, directly or indirectly, over such entity at the time in question, and

`(2) in subsection (b), such amounts or things of value did not represent income related to such United States person.

Any court having jurisdiction of a civil proceeding in which control of such an offshore entity or the income character of such receipts or amounts transferred is an issue shall prohibit the introduction by the taxpayer of any foreign based document that is not authenticated in open court by a person with knowledge of such document, or any other evidence supplied by a person outside the jurisdiction of a United States court, unless such person appears before the court.’

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Discussion of Above – To illustrate the stupidity of the drafters let us look at this clause, it would be too time consuming to dissect the whole bill.

,”or received money or property or the use thereof from an entity, including a trust, corporation, limited liability company, partnership, or foundation (other than an entity with shares regularly traded on an established securities market), formed, domiciled, or operating in an offshore secrecy jurisdiction, exercised control over such entity.”

So if you or many other people wire money to Obama, Senators, Congressmen, Judges, Mayors, Heads of Law Enforcement, etc they will be guilty by assumption of being the natural person behind the offshore structure. Then they have to file a rebuttal. There would be no law stopping you from sending them money by wire from an offshore anonymous corporate bank account. See the text for this:

(c) Rebutting the Presumptions- The presumptions established in this section may be rebutted only by clear and convincing evidence, including detailed documentary, testimonial, and transactional evidence, establishing that--

`(1) in subsection (a), such taxpayer exercised no control, directly or indirectly, over such entity at the time in question, and

`(2) in subsection (b), such amounts or things of value did not represent income related to such United States person.

See how absurd they a re getting. It is called shooting themselves in the foot.

The 34 Offshore Jurisdictions Affected – Here is the starting list:

`(i) Anguilla.

`(ii) Antigua and Barbuda.

`(iii) Aruba.

`(iv) Bahamas.

`(v) Barbados.

`(vi) Belize.

`(vii) Bermuda.

`(viii) British Virgin Islands.

`(ix) Cayman Islands.

`(x) Cook Islands.

`(xi) Costa Rica.

`(xii) Cyprus.

`(xiii) Dominica.

`(xiv) Gibraltar.

`(xv) Grenada.

`(xvi) Guernsey/Sark/Alderney.

`(xvii) Hong Kong.

`(xviii) Isle of Man.

`(xix) Jersey.

`(xx) Latvia.

`(xxi) Liechtenstein.

`(xxii) Luxembourg.

`(xxiii) Malta.

`(xxiv) Nauru.

`(xxv) Netherlands Antilles.

`(xxvi) Panama.

`(xxvii) Samoa.

`(xxviii) St. Kitts and Nevis.

`(xxix) St. Lucia.

`(xxx) St. Vincent and the Grenadines.

`(xxxi) Singapore.

`(xxxii) Switzerland.

`(xxxiii) Turks and Caicos.

`(xxxiv) Vanuatu.

Discussion – So what Obama is going to do is force some substantial jurisdictions to stop operating with Americans and to stop using the USD. This will drop the demand for the USD and make things worse for the USA. People already there will stay there or move to another jurisdiction.

Correspondent Banking – The bill also has measures where the USA can stop tax havens from using correspondent banks in the USA. This will drive people off of the USD is all, it is not going to stop anything – see what happened in Switzerland. The irresponsible monetary practices of the USA caused the financial crisis and now the world is supposed to listen to the self-proclaimed world policeman clean things up. Basically a joke. See the text:

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(5) PROHIBITIONS OR CONDITIONS ON OPENING OR MAINTAINING CERTAIN CORRESPONDENT OR PAYABLE-THROUGH ACCOUNTS OR AUTHORIZING CERTAIN PAYMENT CARDS- If the Secretary finds a jurisdiction outside of the United States, 1 or more financial institutions operating outside of the United States, or 1 or more classes of transactions within or involving a jurisdiction outside of the United States to be of primary money laundering concern or to be impeding United States tax enforcement, the Secretary, in consultation with the Secretary of State, the Attorney General of the United States, and the Chairman of the Board of Governors of the Federal Reserve System, may prohibit, or impose conditions upon--

`(A) the opening or maintaining in the United States of a correspondent account or payable-through account; or

`(B) the authorization, approval, or use in the United States of a credit card, charge card, debit card, or similar credit or debit financial instrument by any domestic financial institution, financial agency, or credit card company or association, for or on behalf of a foreign banking institution, if such correspondent account, payable-through account, credit card, charge card, debit card, or similar credit or debit financial instrument, involves any such jurisdiction or institution, or if any such transaction may be conducted through such correspondent account, payable-through account, credit card, charge card, debit card, or similar credit or debit financial instrument.';

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Summary – First wait to see the final bill, which will be different. Next remember there is bank secrecy in many countries not on the list. Get your assets out of the country now before the bill. Get into the most secure structure you can afford. Get ready to avoid doing anything with the USD in the future after this bill. This is a desperate act by a desperate government.

There will be more and more desperate acts as they try to preserve their time in power. They will not make it in the long run and it appears to many that they know this only too well, but they will hold on and milk it dry right until the last day.