The Taxman Commeth
By Phillip Townsend, Thu Dec 8th
What are the boundaries between legitimate tax planning, taxavoidance and outright tax evasion? It seems the lines arebecoming more blurred with each passing day. The issue has beenfront-page news around the world over the past several monthsdue to world government authorities’ successful campaigns tocurb the illegal use of offshore banks, tax havens andemployment in hope of combating widespread tax evasion. In the US, UK and Australia, tax authorities are activelytargeting offshore schemes and expatriates at an alarming rate.Outside of unscrupulous promoters of offshore tax havens (andtheir clients), the tax-collecting arms of these governments arealso targeting the millions of people living and working aroundthe world who may be unknowingly committing tax evasion. Here are some recent examples:
• June 2005: In the midst of a broad crackdown on offshore taxshelters using the Patriot Act, the IRS warned US expatriatesworking and studying abroad that they risk up to a $10,000 fineor 50 per cent of the value of the offshore account if they failto report overseas bank and financial accounts. • June 2005: The New York-based Big Four Internationalaccounting and consulting giant
KPMG has been the subject of anIRS investigation seeking information on the firm’s clients thatused offshore tax shelters and bank accounts. • June 2005: Eric Bassingthwaite (an alias) operating out ofChannel Islands, and Philip Egglishaw, a Geneva-based Swissattorney, were targeted for their roles in assisting wealthyAustralian attorneys, executives and celebrities (all now undercriminal investigation) in illegally sheltering more than $300million is assets offshore. • July 2005: In the UK, the HM Revenue & Customs officecrackdown on tax evasion and offshore banking resulted incriminal charges for hundreds of client of “offshore” services. • July 2005: New EU tax rules open up offshore accounts held inseveral prominent tax havens to scrutiny by governmentauthorities for the purpose of collecting taxes. A word of caution: Beware…though the taxman certainly can’tcatch everyone, their powers and methods are becomingincreasingly sophisticated. About the author:Phillip Townsend, an international consultant, has contributedto national and international publications, including Moneymagazine, GQ, the International Employment Gazette, Expat World,Freebooter, The Monitor (formerly “Mouse Monitor,” published bythe now defunct Scope International, UK) and numerous others.His website is www.nsliving.info |
