Hong Kong Is New Target of U.S. Crackdown On Global Tax Evasion

bloomberg.com:

Hong Kong is a new target of U.S. prosecutors pursuing a global campaign against evaders of federal taxes, spurred by data acquired in their crackdown on Swiss banks.

Prosecutors are trying to determine what role financial professionals in Hong Kong play in tax evasion, according to people familiar with the matter. They are examining how much taxable money was moved to the former British colony that returned to China in 1997, whether accounts were based there in name only and what banks were involved, the people said.

Read the whole story: bloomberg.com

Comments

[supergenius02]

Well maybe if Obama and the Democrats stop talking about continously taxing the rich to pay for all their social programs, they would not have to hide their money. The U.S. needs to lower income and capital gains taxes to spur investment here at home. Even Obama Administration cabinet officials have had their own tax problems so they should know first hand that we need to lower taxes.

[Mikedsole]

The U.S. has one of the most difficult and complex tax systems in with world, maybe in the most, therefore it is almost impossible to find someone to do ones taxes correctly. All the different forms that exist is totally insane!!! If you do anything internationally then it becomes madly insane. It is then sooo easy to not be labeled as a tax criminal. Why does this have to be? The Swiss have a really simple system and it works. Where are the smart people here, who can fix the system?

I don’t think it is the people but more the whole system that need to be looked at and corrected, i.e., fixed.

See my comment about expats below
http://www.huffingtonpost.com/2009/11/12/hong-kong-is-new-target-o_n_356300.html?show_comment_id=34446811#comment_34446811

[23000Days]

Hey superdoofus, name one social program that the Obama administration has set in place, that didn't exist before Feb. 20!
Secondly, the majority of americans have already recieved a tax cut.

Try google, it's real fun, you betcha'!

[Patriot til Death]

Cash for Clunkers
Home Mortgage Modification
Unemployment Extensions
Health Care Reform (if it passes)

When the government borrows money that has to be paid back and prints money backed with nothing, it wipes out any real tax cut. So, the majority, received nothing of value.

I'm sorry, he's a great inspirational speaker with sincere intentions but he's in over his head.

[Patriot til Death]

If you want to see all that money and more in addition to jobs that have been exported overseas, pouring into this country, pass The Fair Tax.

The only losers in that deal are the lobbyist, tax planners/c­onsultants and Congress.

[chedet]

Do you think the companies will bring back the jobs even after fair tax? No way. It's not the just about the tax, but companies are able to pay less in countries like china and india. That would not be achievable in this country anymore because of our standard of living. Sure you can have less tax but how sure are you the companies are going to bring back the jobs unless you penalized them for not doing so?

[01202009]

Hey Super. I gather that since you use the word *they* to describe the rich that you are not one of them. So my question is why are you voting against your own best interests? The old trickle-down argument that you seem to be making has now been proven to be what George Bush the first said it was: voodoo economics. Along with deregulation that Reagan formula is a disaster as witness the economy, housing, jobs. Do you have all the facts you need to make your argument or are you just arguing?

[supergenius02]

Cutting taxes to spur investment in this country is in all of our interest. This whole class warfare idea that the progessive love is just ruining our nation. We have gone from the frying pan into the fire and it is getting worse. We to think about what is good for American rather jealously trying to punish the rich for being successful.

[nirek]

Why don't you answer the questions my fellow posters asked you?

Nirek

[Patriot til Death]

See above.

[supergenius02]

Patriot handled that question above.

[jsgaetano]

There's two things conservatives love- whining about taxes... and not paying their taxes.

[supergenius02]

What about Charlie Rangel, Geitner and other Obama Aministration cabinet members with tax issues? This is not a conservative or liberal issue. It's an economic issue. We need to lower taxes to prevent tax dodging and spur investment here at home.

[Patriot til Death]

You need to realize that some people in this country rather bring achievers down rather than work to join their ranks.

[Waltfl]

It works like this:

1. You form a corporation in Hong Kong.

2. An attorney there poses as nominee shareholder for a fee, and gives you a contract that he will follow your orders.

3. The proceeds go into a business bank account for which you secretly have power of attorney.

4. You make boat loads of money in the USA but, being a good, patriotic American, you don't want to pay taxes.

5. The Hong Kong corporation now over-invoices your US corporation. Let's say you by 100.000 microchips for $ 100 each, which are in reality only worth $ 3 in Hong Kong. That leaves you with practically $ 9.7 Million cash in your Hong Kong bank account.

6. The 9.7 Million are a business expense, so you don't pay taxes in the US.

7. Taxes on foreign owned corporations are 0%, means, no matter how much the corporation makes, you always pay nothing.

8. Now the Hong Kong corporation buys shares in corporations in the US and Europe, and the gains are also transferred to Hong Kong and are hence tax free.

Nice system.

[MarcusT]

Nope

[Patriot til Death]

4. You make boat loads of money in the USA but, being a good, patriotic American, you don't want to pay taxes.

A good patriotic wouldn't support laws that penalize achievement. Who would create more jobs with profits from business, the private sector or government?

A good patriotic American would support The Fair Tax.

[Waltfl]

And I thought patriotism was shown best by having a "Support our Troops"-sticker on the bumper.

[Mikedsole]

Expats, who represent the U.S. as brand ambassadors, get screwed by these activities.

The U.S. is one of only two countries that imposes tax on a citizen's worldwide income, no matter where that citizen lives, and/or for how long. The other country is, of all places, Eritrea.

Essentially this means that every U.S. citizen, including green card holders, are “slaves” to the U.S. government, via the IRS. It is fairly easy to become a U.S. citizen but almost impossible to renounce ones citizenship, it is also very expensive too. This image reminds me of history class….feudalistic system.

Here are two articles worth reading:
http://www.sovereignsociety.com/2009ArchivesSecondHalf/100809IsExpatriationRightforYou/tabid/6029/Default.aspx

http://genevalunch.com/blog/2009/09/13/us-taxpayers-abroad-part-2-taxes-overboard-americans-reconsider-the-irs-at-the-geneva-t-party/ (This article has 3 parts.)

And, worst of all is that most people don’t know about this either. Many tax accountants are clueless too. On the end the regular man gets screwed by the government.

[Amalek]

Actually,China's law says its citizens pay tax on their worldwide income too. China, however, does not enforce their law on this issue. Yet, anyway. The new IRS office in Beijing may be the beginning of that. The US has a treaty with China that lets China look at any US tax return they choose to. Even yours.

[Mikedsole]

According to the U.S. Department of State, there was a substantial rise in the number of American-born expatriates since 1990, from about 1.5 million to 4.5 million in 2005, to eventually grow to about 6 to 8 million by 2009. (Source: Wikipedia.org) That only includes U.S. born! The numbers are far greater for non-U.S. born Americans. About 99% are probably clueless about that they have to pay U.S. taxes.

And all 99% are not doing anything illegal, so they think. However if they get audited by the IRS they are considered tax evaders, and the financial consequences can more than completely wipe out all their savings, especially right now as many have lost money in the market. Filing bankruptcy is not permitted, so one will have to “slave” away for the U.S. until all “sins” are paid off.

America, the land of the free. Hmm….as long as you keep paying the government, is what it translates to. If you are poor the government doesn’t care for you either. We read about this every day.

[Amalek]

I have been an expatriate most of my adult life, and I have never met another American expatriate who did not know he remained subject to US taxes. In fact, it is something people carp about constantly. The reality is that most don't pay much. First there is an 80,000 exclusion if you live abroad, and you get to claim the taxes you pay to a foreign country against your US tax.

Expatriates are not the major target in the crackdown. It is your basic rich guy who does not like to pay taxes on his considerable investment income.

[sinope]

That's stupid, we should crack down on Delaware.

[RedRedRed325]

I thought this was going to be an article on Tim Geitner and Charlie Rangel. What a disappointment.

[Amalek]

You will find that spin back at Redstate.

[RedRedRed325]

Since when is presenting the facts "spin"?

[gladys46]

Fine, just get the money back here ! This is one of those huge issues that take me to my ultimate sense of pi ssivity! The so-called patriots even during war times adore their $$$ more than those, ah, keeping them safe !!!!

[ZSV]

Call me when they crack down on wall st...

[ZSV]

[Amalek]

You sure said that succinctly.

[surlyatbest]

Hong Kong. Is that where Chris Dodd keeps his CountryWide money?

[Amalek]

You know, you need to become more clever and persuasive if you intend to come in here and change anyone's mind. Otherwise, you are just the drunk who pees in the living room corner.

[coveark]

I have had 2 home loans with CountryWide.

They always checked our annual income and outgo, property condition and appraisal etc during the loan application process.....Now we are paying Bof A on the same loan.

I preferred CountryWide for their courtesy, and just how they handeled business. They were a pleasure to deal with.

[SeanOcali]

When will they go after Deleware?

[Papa Swamp]

Bingo. Delaware has more protective rules than the Swiss for people in other countries depositing here. Clean up our own yard first before pointing fingers?

[Waltfl]

I know this has been circulated on the web for a long time, but it's not quite true. If a Federal judge asks you in this country about nominee officers or nominee shareholders in Delaware or Nevada corporation, and you can't remember, or refuse to answer, you better bring a toothbrush and a pillow to court.

[DC]

As the US Consulate in Bern, Switzerland admitted to the Swiss Press on the exact same question: It is always easier to point the finger and go after someone else.

[hopefull252]

Why not look to Hong Kong lets go after the places they maybe hiding money instead of the places we know "Delaware, Bermuda, Cayman and Swiss.

When laws and a secret banks exist the money will move or they hid it in plain view like JP Morgan and Goldman Sachs.

We have 5 banks that created 600+ Trillion dollars of counterfeit money and hold over 200 Trillion here in the US and no one want to address this scam of derivatives.

Check out page 23 of each of these reports and see the Funny Money of these Banks

Office of the Comptroller of the Currency
http://www.occ.gov/deriv/deriv.htm

Goldman just bought 40Trillion dollars of this junk and is betting the administration will make an exchange to trade it like it is real money.

How did the banks create 800 trillion world wide when it 1999 we only had 36trillion of this junk and 1995 it was half or that. It seems no one wants to address how this money was created.

The Dollar value is at an all time low, because our banks created counterfeit money.

The Federal Reserve may hold answers to these questions but no one will demand full disclosure or an audit of the Fed.

[lastpost]

“Crackdown On Global Tax Evasion”

The international equivalent of believing oneself to be broke, then discovering a stash of cash down the back of the sofa?

[Amalek]

A good one.

[Amalek]

Hong Kong is a favorite destination for tax evaders.

Americans have been using it for years. It is not as secret as Switzerland once was, but a lot cheaper and easier.

The basic premise was that the IRS was too incompetent to ever catch you if you used a Hong Kong company and never reported it That has been true for years. All the money spent to track terrorism money is now paying off in making it easier to track down tax evasion.

With some political will now to go after the crooks this may be coming to an end. The Chinese are not going to protect rich Americans against their own country.

[shanghaislim]

BINGO

[DC]

And the Chinese will not kowtow to the Americans and make nice nice in hopes of keeping good relations.

[hellboundtrain]

IRS could probably stop taxing the people if
they would turn their attention to the masters - the corporations.