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A few months ago, I told you about a bold reportpublished within the IRS that absolutely blasted the agency’s mafia tactics.
In its 2013 annual report to Congress, the Office of the Taxpayer Advocate wrote that the IRS shows “disrespect for the law and a disregard for taxpayer rights.”
Further, the report says that the current system “disproportionately burdens those who [make] honest mistakes,” and that “tax requirements have become so confusing and the compliance burden so great that taxpayers are giving up their U.S. citizenship in record numbers.”
We all know the stories. The IRS has nearly infinite power to do whatever it wants, including freezing you out of your own bank account without so much as a phone call, let alone due process.
In the Land of the Free, people think they’re innocent until proven guilty. This is total BS. If you are only suspected of wrongdoing, you can be locked out of your entire savings.
This is an incredible amount of authority to wield.
But the British government has just gone even further.
Buried in its most recent budget package is a curt little paragraph that reads “The Government will modernise and strengthen [the tax agency’s] debt collection powers to recover financial assets from the bank accounts of debtors who owe over £1,000 of tax.”
Read that one more time just to let it sink in.
The British government is setting an absurdly low threshold at £1,000… about $1,650 in back taxes.
And they’re saying that if the tax authorities believe you owe even just a minor tax debt, they will not only FREEZE your assets, they’ll dip into your bank account and TAKE whatever they want.
Judge, jury, and executioner. They get to decide in their sole discretion if you owe them money, and they get to take as much as they want to satisfy the debt.
I can’t even begin to imagine why any Brit in his/her right mind would continue to hold a substantial amount of savings in UK banks.
You are practically begging for the government to relieve you of your hard-earned savings.
Even if you haven’t done anything wrong, and have paid up everything that you owe, the slightest clerical error could have them plunging their filthy hands into your account.
These issues are worldwide. Whether you’re in the US, UK, France, Cyprus, etc., when governments go bankrupt, these are precisely the sorts of tactics they resort to.
Rational, thinking people need to be aware of this trend. And it behooves absolutely everyone to come up with a plan B. Because at the rate things are going, Plan B may very soon become Plan A.
Obama Administration Preps ‘Weaponized’ IRS For Deployment Against Conservatives In 2014 : Personal Liberty™
Last week, reports began circulating that President Barack Obama was readying a new series of regulatory recommendations that, if approved, would essentially equip the Internal Revenue Service with sufficient power to choke conservative grass-roots organizations out of effectiveness in time for the 2014 midterm elections.
The new rules, of course, would apply equally to nonprofits of all ideological persuasions — in theory. But thanks to the specific areas of operation the Obama Administration seeks to empower the IRS to scrutinize, it’s clear they were tailor-made to hobble conservatives. On top of that, the Obama Administration has set a precedent for picking and choosing which fish it wants to shoot out of the partisan barrel.
There’s no better phrasing to explain that well-established fact than that delivered by Tea Party Patriots member Ernest Istook, whose column in The Washington Times last week condemned Obama even as it lamented how little is likely to change:
The power to tax is the power to destroy. Its new powers will let the IRS destroy certain groups, especially those connected to the Tea Party, by imposing a tax on their work and messages during campaign seasons.
[T]he Obama Administration is notorious for selective enforcement, meaning it could choose to give a pass to friendly groups while it puts conservatives out of business. They could use this in efforts to shut down groups like the Faith and Freedom Coalition, Club for Growth, Americans for Prosperity and the National Rifle Association, while ignoring People for the American Way, American Civil Liberties Union, USAction and the Democratic Leadership Council.
The new rules would institute a litany of new no-nos to cover both 501(c)(4) nonprofits and, if the Administration wishes to strictly enforce the rules, 501(c)(3)s as well.
But how do the new changes manage to target conservatives if, technically, they apply generally to nonprofits of every stripe? Because the proposal specifically exempts the left’s grass-roots bread and butter: labor unions and trade groups.
Here’s a sampling of what conservative groups — now a year removed from the same IRS scandal that was supposed to put a stop to further discrimination — will face in 2014 (H/T:Matt Barber for WND):
In an explosive  scandal that continues to grow, the Obama IRS was caught — smoking gun in hand — intentionally targeting conservative and Christian organizations and individuals for harassment, intimidation and, ultimately, for political destruction.
…Not only has Obama faced zero accountability for these arguably impeachable offenses, he has since doubled down. With jaw-dropping gall, his administration has now moved to officially weaponize the IRS against conservatives once and for all.
…Specifically, here’s what the proposed regulations would do to conservative groups and their leaders:
- Prohibit using words like “oppose,” “vote,” “support,” “defeat,” and “reject.”
- Prohibit mentioning, on its website or on any communication (email, letter, etc.) that would reach 500 people or more, the name of a candidate for office, 30 days before a primary election and 60 days before a general election.
- Prohibit mentioning the name of a political party, 30 days before a primary election and 60 days before a general election, if that party has a candidate running for office.
- Prohibit voter registration drives or conducting a non-partisan “get-out-the-vote drive.”
- Prohibit creating or distributing voter guides outlining how incumbents voted on particular bills.
- Prohibit hosting candidates for office at any event, including debates and charitable fundraisers, 30 days before a primary election or 60 days before the general election, if the candidate is part of the event’s program.
- Restrict employees of such organizations from volunteering for campaigns.
- Prohibit distributing any materials prepared on behalf a candidate for office.
- Restrict the ability of officers and leaders of such organizations to publicly speak about incumbents, legislation, and/or voting records.
- Restrict the ability of officers and leaders of such organizations to make public statements regarding the nomination of judges.
- Create a 90-day blackout period, on an election year, that restricts the speech of 501(c)(4) organizations.
- Declare political activity as contrary to the promotion of social welfare.
- Protect labor unions and trade associations by exempting them from the proposed regulations.
These regulations are timed to coincide with the onset of election season. And a new set of discriminatory rules isn’t the only enforcement tactic the IRS is ready to deploy. The New York Times reported Wednesday on Friends of Abe, a conservative group composed of mostly anonymous Hollywood types, that’s found itself in the agency’s crosshairs after applying for tax-exempt status under the existing guidelines:
Last week, federal tax authorities presented the group with a 10-point request for detailed information about its meetings with politicians like Paul D. Ryan, Thaddeus McCotter and Herman Cain, among other matters, according to people briefed on the inquiry.
The people spoke on the condition of anonymity because of the organization’s confidentiality strictures, and to avoid complicating discussions with the I.R.S.
…Friends of Abe — the name refers to Abraham Lincoln — has strongly discouraged the naming of its members. That policy even prohibits the use of cameras at group events, to avoid the unwilling identification of all but a few associates — the actors Gary Sinise, Jon Voight and Kelsey Grammer, or the writer-producer Lionel Chetwynd, for instance — who have spoken openly about their conservative political views.
Tellingly, the IRS has been after the group for two years. Even in the wake of last year’s scandal (which a very friendly Department of Justice is supposedly investigating), the IRS remains emboldened in targeting conservatives under the very rules it has admitted it selectively applied.
Remember that bit earlier about the Obama Administration picking and choosing whether to target 501(c)(3)s based on the political benefits? That’s exactly what’s happening with Friends of Abe.
“[U]nlike most of [last year’s targeted] groups, which had sought I.R.S. approval for a mix of election campaigning and nonpartisan issue advocacy, Friends of Abe is seeking a far more restrictive tax status, known as 501(c)(3), that would let donors claim a tax deduction, but strictly prohibits any form of partisan activity,” The Times reported.
So the Tea Party’s concern isn’t merely academic.
You can file a public comment on the proposals until Feb. 27, and you can sign a petitionsponsored by Liberty Counsel Action (another targeted conservative group) imploring the Senate Committee on Finance: Taxation and IRS Oversight “to ensure all 501(c)(4) organizations formed to promote conservative values will be treated fairly by the IRS.”
A Calgary woman’s developmentally disabled son is caught in a U.S. tax quagmire that she fears may cost him the money she spent years setting aside for his financial future.
“He’s entrapped,” said Carol Tapanila, the 70-year-old mother. “There’s no way out. He is entrapped into U.S. citizenship.”
Her 40-year-old son was born in a Calgary hospital, but automatically received U.S. citizenship because both his parents were American. That simple fact may soon create financial woes for the Tapanila family.
Starting in July, a new U.S. tax law, the Foreign Account Tax Compliance Act (FATCA), goes into effect. It requires banks around the world to sift through client accounts to find anyone with U.S. connections and send that information to the U.S. Internal Revenue Service.
- Canadian banks to be compelled to share clients’ info with U.S.
- FATCA under fire from tax experts and Canadians
The law is aimed at Americans who are hiding offshore accounts, but the information sharing is likely to unearth many unsuspecting Canadians with U.S. citizenship, like Tapanila’s son, who didn’t realize they were required to file U.S. taxes.
Tax law expert Allison Christians calls the Tapanila case “ridiculous” and a “classic example of why the law is unjust.”
The law “was intended to find rich American tax cheats hiding out in Switzerland,” said Christians, who teaches tax law at McGill University, but it “will now punish poor, disabled Americans living in other countries, who are only American by birth.”
These so-called “accidental Americans” also include an Ottawa woman who was born in the U.S. to Canadian parents and moved back north at one year of age.
This woman, who asked to remain anonymous, said her husband is livid that their joint account information will soon be shared with U.S. tax authorities.
Both fear that FATCA will reveal her U.S. citizenship and saddle them with hefty penalties for failing to file U.S. tax returns that will eat into their retirement savings.
“It’s stressful. I think about this every day,” said the woman. “It’s like a big weight over your head that never really goes away, and I’m starting to wonder when and if it’s ever going to go away?”
In advance of the law taking effect, more than a dozen countries have inked intergovernmental information-sharing agreements with the U.S.
These arrangements allow either for banks to hand over information directly to the Internal Revenue Service, or indirectly via their national tax agencies.
Canada is currently in negotiations with the U.S. The banking industry notes that FATCA will affect many Canadians indirectly because of the extra costs of industry compliance.
“We have to comply with FATCA,” said Marion Wrobel, vice-president of policy and operations at the Canadian Bankers Association. “While we don’t like it and we’ve lobbied against it, FATCA is going to be a reality.”
If banks refuse to comply, they face severe financial penalties — a 30 per cent withholding tax on all American-sourced income or sales of American-based assets.
But financial institutions also face costs to comply. Some estimate the manpower and administrative systems required to find clients with U.S. connections could cost up to $100 million per institution, said Wrobel.
“It is expensive, and as far as we see it, it adds nothing,” said Wrobel. “It doesn’t make the banks any safer or sounder.”
Thousands on legal advice
For Tapanila, the financial burden has already been costly. She spent thousands of dollars seeking legal advice on how to renounce her son’s U.S. citizenship. Under the law, a parent, guardian and trustee cannot renounce on someone’s behalf.
‘I wanted my son to have something when I was gone from this Earth.’– Carol Tapanila
She refuses to file U.S. taxes for her son, fearful that it would chip away at the funds she’s stashed in a Registered Disability Savings Plan (RDSP) and a Tax Free Savings Account (TFSA).
“I see no common sense in it,” she says. “Put me in jail. I don’t care. But I’m not going to do that.”
RDSPs as well as TFSAs are considered “offshore trusts” by U.S. tax authorities. That makes any gains from these plans — which include contributions from Tapanila and matching ones from the government — taxable by the IRS.
The CBA’s Wrobel said that, based on his talks with the federal government, he’s hopeful that the U.S.-Canada agreement will include exemptions for registered savings accounts.
That would provide some relief, but Tapanila notes that the cost of filing U.S. taxes every year could actually be the largest drain on her savings.
Accounting firms estimate that personal tax filings can cost from $500 to $5,000 a year because of the complexity of U.S. tax law.
“I wanted my son to have something when I was gone from this Earth and so I was a saver,” said Tapanila. “And now I don’t want the U.S. to take one penny that should go to my children.
“I want my hard-earned Canadian money that I’ve saved to go to my children, not to the U.S. or some compliance tax lawyers year after year after year after year.”