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(Especially noteworthy articles’ headings highlighted in gold.)
FBI Enlists Bankers to Track Terror Funds.More on this story here.
Assaults on liberties a growing concern.More on this story here.
More surveillance on the way in pending bill.More on this story here.
$200 BILLION IN MUSLIM FUNDS FLEE U.S, WESTERN BANKS
KUALA LUMPUR: New Islamic bank rules claim to end West’s “debt slavery” as anti-terrorism pushes cash to Muslim nations.More on this story here, here, and here.
CANADA DEMANDS EXTRAORDINARY POLICE POWERS
OTTAWA: Liberals push controversial “security” law.More on this story here.
IRS COMMISSIONER ROSSOTTI ENDS HIS FIVE YEAR TERM
Departing chief says IRS is losing war on tax cheats, especially the wealthiest and most sophisticated among them. Claims up to 80% of cheats in some categories will not be punished because the IRS lacks the resources to investigate documents, primarily from partnerships and similar entities that are used mostly by wealthy investors, which do not match up with reports on individual tax returns. IRS consultant has estimated that offshore evasion alone costs the government $70 billion annually.
Nixon administration commissioner Donald Alexander comments on Rossotti’s term: “Rossotti has this survey showing everyone loves the I.R.S. now and everyone hated it five years ago. The reason the I.R.S. was hated in 1997 and 1998 was that the Senate held those hearings to blast the I.R.S. and most of the media went right along with it. Rossotti placated Congress very well when they were in that idiot mood in 1997 and 1998, but he should have shifted much more quickly into addressing cheating, which he started on 18 months later than he should have.”More on this story here.
Cato Institute comments on the latest IRS fishing expedition, targeting Americans who use credit cards issued by foreign banks. It is demanding that credit card companies violate the privacy rights of their customers because the IRS thinks that some taxpayers might be using their cards to access money in foreign bank accounts - money that some taxpayers might not be reporting to the IRS. It is not illegal to hold an offshore account in a tax-free Caribbean country, nor is it against the law to use a credit card issued on that account in the United States. The IRS handbook for special agents says that most taxpayers use havens to avoid taxes and for tax-planning purposes - not to evade taxes. High taxes - and a tax code that punishes saving, investment, and work - give taxpayers an incentive to shift their activities to low-tax countries. That is the real problem. But the IRS has no interest in tax reform because tens of thousands of bureaucrats would lose their jobs if we had a simple and fair flat tax.Full comment here.
E.U. TAX INFORMATION SHARING PLANS COLLAPSE
With the US and SWITZERLAND refusing to go along with European Union demands to end financial privacy, it finally dawns on EU politicians and tax collectors they are not going to get what they want.More on this story here.
JERSEY SIGNS TAX INFO SHARING AGREEMENT WITH U.S.
WASHINGTON: Largest Channel Island signs agreement with the US to share information on taxes, in the latest in a series of agreements being negotiated by the US Treasury with major offshore money centers.More on this story here and here.
For full TIEA text, see link at bottom of this page.
OFFSHORE FUND MANAGERS WARNED ON SARs
US may try to extend suspicious activity reporting to US persons who invest offshore, fund managers told. “Red flags” which could signal money laundering activity include clients who are reluctant to answer questions, investors that regularly pull out of funds, regardless of the penalties, and inconsistencies between the originator of money invested, and the named fund investor.More on this story here.
“BEHAVIOR DETECTION” SOFTWARE TO SPY FOR MERRILL LYNCH
Program works by analyzing every transaction within the firm and looking for behavior - including single occurrences and patterns - within an account or among various accounts that may indicate illegal or unethical behavior. Money Laundering Monitor application alerts users to staged deposits or withdrawals of mixed monetary instruments, foreign electronic transactions, changes in inactive account behavior, transactions in accounts without investment activity, rapid movement of funds, transfers between unrelated accounts, hidden account relationships, and other behaviors that could indicate illegal activity.More on this story here.
NEITHER EQUALITY NOR PROSPERITY
US tax policies drive wealthy individuals and corporations offshore.More on this story here.
U.S. ELECTIONS IMPACT OFFSHORE FINANCIAL WORLD
Dan Mitchell of the Heritage Foundation predicts Republican control of US Congress will ease pressure on the offshore financial world. Anti-offshore Democrats out; pro-tax competition in.More on this story here.
Dan Mitchell on the developing “European cult of multilateralism”.More on this story here.
THE SWISS INSURANCE BUSINESS, ALWAYS ROCK SOLID, IS NOT ANY MOREMore on this story here.
HEDGE FUND INVESTORS MAY FACE BACK TAXES
WASHINGTON: IRS private ruling calls into question life insurance wrappers said to be “tax free”. SEC also investigating hedge funds.More on this story here and here.
TWO INDICTED FOR OFFSHORE TAX EVASION
DENVER, Colorado: Two Denver-area residents plus a Florida-based associate allegedly set up shell corporations used to hide roughly $9 million in taxable income. The defendants also allegedly made it look like offshore transfers were payments for their consulting services, the indictment said. They provided the services to “members”, who paid an initiation fee of $50,000. “Members” allegedly used debit cards and loans to spend the money they hid offshore. Formal charges include 26 counts of aiding in the filing of false income tax returns, and filing false bank reports.More on this story here.
BLACK MARKET ECONOMIES GROW WORLDWIDE
Within most economies, there are large portions that work outside the law called shadow economies. Participants in the shadow economy neither pay taxes nor obey regulations. A recent study finds that taxes and burdensome regulations push people into the shadow economy. Average shadow economy 16.7% of GDP in the 21 OECD nations, vs. 38% in 22 nations making the transition to capitalism. A one percent increase in the marginal federal personal income tax results in the shadow economy increasing by 1.4 percent. Greece, Belgium, Italy, and Sweden all have tax burdens larger than 70 percent of GDP and have shadow economies larger than 20 percent of their official GDP. The United States and Switzerland have extremely low tax burdens [sic] and extremely low shadow economies (8.8% and 7.5% respectively).More on this story here and here.
PHONY EXPORT-IMPORT PRICES EVADE TAXES
Among the 2001 government trade data are thousands of wildly mispriced transactions, and those trades may hint at corporate tax evasion and criminal money laundering on a grand scale, according to two academic researchers who have been mining the data for more than a decade. In 1998 the US imported nearly 602,000 single-lens-reflex cameras from Japan for an average price of $239. That same year, the US exported to Japan 240,000 single-lens-reflex cameras, over one-third of which were priced at an average of $11.39. They estimate that corporations manipulated international trades last year to shave $53.1 billion from their tax bills. Overpricing imports or underpricing exports is a relatively easy way to shift large amounts of taxable income out of the United States, or ill-gotten gains into the country.More on this story here.
FAMILY LOANS HAVE U.S TAX IMPLICATIONS
Simple rules to avoid having loans to relatives create more taxes.More on this story here.
AMERICANS QUESTION GROWING GOVERNMENT POWERS
Sharp questions about government intrusions in private lives.More on this story here.
US may create domestic spy agency.More on this story here.
CHRISTIAN RIGHT WORSHIPPING CAESAR
True conservatives fight government civil liberties violations.More on this story here.
LATEST ON IRS OFFENSIVE
Federal prosecutors, acting on the IRS’s behalf, have begun trying to force CompuServe to hand over the names of customers who purchased their Internet service with MasterCards issued by banks in the Caribbean. The IRS suspects some may be Americans who use the accounts to hide income, but does not know which ones. So it wants to examine all 237,000 accounts.More on this story here.
A Busy Week for the U.S. in its pursuit of tax rebels, and more work-a-day evaders. An 8-year prison sentence was imposed on a former IRS lawyer who evaded $2 million in taxes on profits from a stock swindle. Five civil injunctions were also sought against promoters of tax reduction schemes, including one against a man whose clients paid him up to $20,000 for advice based on the “861” position - named after a section in the Internal Revenue Code - which alleges that most Americans do not owe tax unless they work for foreign-owned companies. According to the complaint, Carel “Chad” Prater filed invalid “judgments” against the IRS, sold bogus trusts, hid clients’ income in anonymous limited liability corporations, filed frivolous tax returns, and tried to persuade employers to stop withholding taxes from his clients’ wages. “They’re not saying what we’re doing is illegal,” said Prater.
In Newark, the Justice Department sought a federal court injunction on Thursday against Richard Haraka, owner of the Taxgate.com Web site. The department contends Mr. Harakas has been interfering with enforcement of the federal tax laws and promoting the 861 position. The government filed suit earlier against Thurston P. Bell, who uses his web site Nite.org to promote his version of the 861 position. The Justice Department has not made any move against four leading advocates of the 861 position who boast about not paying taxes.More on these actions, and other actions taken, here, here, and here.
EUROPEAN UNION MEGA-MERGER PENDING
25 nations, 450 million citizens; EU expansion challenges US.More on this story here.
REPUBLICAN ELECTION WIN HELPS OFFSHORE POLICIES
Coverage of Dan Mitchell’s US election analysis memo. While not all Republicans are firm supporters of tax competition, financial privacy, and fiscal sovereignty, they almost always are better on these issues than the Democrats they replace. Many of the new Senators are effective and articulate defenders of market-based policy. Conversely, Democrat Senators will have far less power to promote bad tax policy.More on this story here.
PRIVACY MEANS AVOID WINDOWS XP
Privacy/security FAQs on Windows XP here.
Agreeing to Windows XP EULA may violate US privacy laws.More on this story here and here.
Anyone using any MS OS later than Win2000 SP2, or with any “fixes” later than Win2000 SP2, does so at their own risk - and under extreme jeopardy.More on this story here.
HATCH WANTS TO INVADE YOUR PRIVACY
Utah Senator wants government snoops to be able secretly wiretap communications and e-mail without a warrant.More on this story here.
THE ROCK OF GIBRALTAR
A pointed (and funny) perspective on the UK-Spanish deal over Gibraltar.More on this story here.
MORE GROUPS JOIN DEMAND TO KILL I.R.S. RULE
Protest aimed at Clinton/IRS proposal to report interest payments to non-resident aliens investing in US.More on this story here and here.
U.S. TREASURY CONSIDERS OFFSHORE TAX REFORM
International corporate taxes may get major overhaul. Some tax breaks to disappear Deputy Treasury Secretary says.More on this story here and here.
WILLIAM SAFIRE: YOU ARE A SUSPECT
Every purchase you make with a credit card, every magazine subscription you buy and medical prescription you fill, every Web site you visit and e-mail you send or receive, every academic grade you receive, every bank deposit you make, every trip you book and every event you attend — all these transactions and communications will go into what the Defense Department describes as “a virtual, centralized grand database”. To this computerized dossier on your private life from commercial sources, add every piece of information that government has about you — passport application, driver’s license and bridge toll records, judicial and divorce records, complaints from nosy neighbors to the F.B.I., your lifetime paper trail plus the latest hidden camera surveillance — and you have the supersnoop’s dream: a “Total Information Awareness” about every U.S. citizen. These are the privacy destroying plans of disgraced Reagan administration retread John Poindexter. The motto over Poindexter’s Pentagon office reads “Scientia Est Potentia” — “knowledge is power”.Rest of story here.
US Defense Department Information Awareness Office web site here.
The Guardian: Poindexter is, once again, one of the most powerful men in America. News of appointment to head the “Information Awareness Office” back-paged by terror alert. Story here.
US Hopes to Check Computers Globally. Story here.
ACLU Urges Bush to kill Pentagon data-mine plan. News story here.
Reason magazine’s reasonline: “Poindexter’s laboratory”. You are probably not a terrorist, but the government can’t be sure until it puts your information in a huge, centralized database, where Poindexter’s computers can sniff it over. You haven’t visited any terrorist havens, purchased books about weapons, read subversive online propaganda, or undergone plastic surgery lately, have you? No need to answer — the government will know soon enough if Poindexter's vision is realized. Rest of article here.
Homeland Security Department bill a supersnoop’s dream. Analysis here.
US Rep. Ron Paul: Oppose the Homeland Security Bureaucracy! Speech here.
TIME TO TAME THE TAX POLICE
The US needs a law-abiding IRS commissioner who understands simple economics.Opinion here.
US COURT RULES AGAINST WARRANTLESS PC SEARCHES
A federal judge has ruled that law enforcement officials went too far when they tried to use evidence gathered by a known hacker to convict someone of possessing child pornography. The decision is believed to be the first to say that hacking into an Internet-connected home PC without a warrant violates the Fourth Amendment, which prohibits unreasonable searches and seizures. A hacker uploaded a file to a child porn newsgroup that contained the SubSeven virus, which the hacker used to remotely search the computers of anyone who downloaded the file. The hacker then sent anonymous tips to law enforcement officials alerting them to child porn files the hacker had found on people’s PCs.More on this story here.
NEW ZEALAND IMMIGRATION RULES NEED CHANGE?
Government officials are looking at ways the $1 million investment category migrants bring into the country could be used to invest in New Zealand infrastructure or venture capital. Points-based system used to assess potential migrants’ residency had “fundamental flaws”, said Prime Minister Helen Clark.More on this story here and here.
Though New Zealand ranked 21st out of 28 countries in the OECD on a gross domestic product per capita basis, it ranked 11th measured by the OECD’s index of family wealth.More on this story here.
NEW CANADIAN LAWS IMPACT EXPATRIATES
“The introduction of the Permanent Resident Card and the new Tax Treaties with the UAE and Kuwait should be considered very seriously by those [Canadian] permanent residents who have not taken all of the important steps to establish their physical presence in Canada and/or who have not been entirely forthright in their disclosure to tax and immigration authorities.”Discussion here.
LATIN AMERICAN HOPES FADING
Latin American economies were once again looking bleak. Inability to complete the reform process and some reforms simply going off the rails did not help. Only Chile stuck with its reforms until the benefits went beyond Latin America’s grasping political class.More on this story here.
NIGERIAN SCAM COMES TO VIRGINIA
“They are sending out millions of these e-mails from Nigeria, Sierra Leone, Spain and even Canada,” said a Secret Service agent. The basic scheme is always the same: The recipient is asked to pay some upfront costs and to provide a bank-account number. Inevitably, those who cooperate find their own bank accounts drained.More on this story here.
AL GORE IS ON THE RIGHT SIDE, FOR ONCE
Former VP and would be president says the Bush government had undertaken the “most systematic invasion of privacy of every American citizen that has ever been taken in this country” and that “They have now taken the most fateful step in the direction of that Big Brother nightmare that any president has ever allowed to occur”.More on this story here.
Control freaks are winning the financial privacy battle.More on this story here.
Welcome to the Police State. Now shut up and do as you’re told.Commentary here.
CAN ANTI-MONEY LAUNDERING BE A CRIME?
Employee wrongly arrested by the FBI due to a bank’s mistake won a $1.15 million award after a finding that Wells Fargo had made the mistake that led to her arrest. The issue was the mistaken non-filing of a cash transfer report. Story illuminates how the anti-money laundering frenzy has not only turned bankers into government spies, but subservient toadies who suck up in fright before the FBI.More on this story here.
For all the voluminous and very costly anti-money laundering laws, they actually accomplish very little.“Money Laundering is a Growth Industry” report here.
PENTAGON T.I.A. PLAN DRAWS FIRE
Civil liberties concerns about proposed Total Information Awareness system grow. Spokesman for the Libertarian Party states “Unless this Orwellian project is dismantled, innocent Americans will suffer under the kind of high-tech, 24-hour surveillance that the Stasi and the KGB would have envied.” Defense Undersecretary Pete Aldridge claims it is “absurd” to think the Defense Department is “trying to become another police agency.”
Among the records that would be collected and combed through, Aldridge said, are passports, visas, work permits, driver’s licenses, credit cards, airline tickets, rental cars, gun purchases, chemical purchases, and those detailing events such as arrests or suspicious activities. “You’re looking for trends in transactions that are associated with some potential terrorist act,” Aldridge said. “And you’re trying to put those pieces together.”More on this story here and here.
U.S. government’s ultimate database run by a felon.More on this story here.
HOMELAND SECURITY IMPACTS YOUR LIFE
New security law to pervade daily lives; destroy privacy. Besides the data gathering and linking, implications of act include more latitude for government advisory committees to meet in secret, new powers to government officials to declare national health emergencies, including quarantines and forced vaccination. “We could see a situation in this country where you are going to have forced use of vaccines and no accountability for those who make them. It’s a prescription for tyranny,” says Barbara Loe Fisher, cofounder of the National Vaccine Information Center.More on this story here.
Internet providers could give the government more information about subscribers and police would gain new Internet wiretap powers under bill tucked into a section of legislation creating Department of Homeland Security.More on this story here and here.
SECRET HISTORY OF FBI SURVEILLANCE, LEGAL AND ILLEGAL
They have broken into homes, offices, hotel rooms and automobiles. Copied private computer files. Installed hidden cameras. Listened with microphones in one couple’s bedroom for more than a year. Rummaged through luggage. Eavesdropped on telephone conversations. It’s the FBI, operating with permission from a secretive U.S. court in a high-stakes effort pitting the FBI against the world’s spies and terrorists.
An FBI memo that recently surfaced said agents in early 2000 illegally videotaped suspects, intercepted e-mails without court permission and recorded the wrong phone conversations.More on this story here and here.
U.S. CORPORATIONS MOVE ASSETS INTANGIBLE OFFSHORE
NY Times discovers the strategy that business tax lawyers have advised for many years: Move intellectual property offshore to avoid high US taxes. Instead of moving their headquarters, companies are simply placing patents on drugs, ownership of corporate logos, techniques for manufacturing processes and other intangible assets in tax havens. “International tax planning 101”, says international tax lawyer.More on this story here.
THE IMPERIAL UNITED STATES OF AMERICA
No other label than “empire” quite seems to capture the scope of American power or the scale of its ambition. No longer just a leftist term of derision, the notion of an American empire has suddenly become a live debate inside the US across the political spectrum. Analogies to the Roman Empire may be stronger than is apparent at first blush. For example, with military bases, or base rights, in some 40 countries across the world, the U.S. has the same global muscle it would enjoy if it ruled those countries directly.More analysis here.
FORBES 2003 INVESTMENT GUIDE
Annual year-end guide to bettering your personal finances. Includes articles on self-employment, stocks and bonds, and real estate.Guide contents here.
DESTRUCTION OF PRIVACY TO FIGHT “TERROR”
Paging Mr. Orwell: US government proposals erode privacy needlessly in the name of fighting terror. Fighting terrorism is a daunting challenge. But it must not become a pretext for the excessive secrecy and high-tech spying on citizens that are the hallmarks of a police state. Full editorial here.
“What is under development here is a coordinated effort to pull together all the available data on every American who works, banks, buys on credit, purchases a firearm or sends an email on the Internet,” says computer security expert Allen Eagleton. “In most cases, the information is out there, available in widely-scattered databases. This is a massive effort to bring all this data together to build personal profiles on as many Americans as possible. The potential for such a system is enormous, it will allow someone to build a complete dossier on virtually any person in seconds.” Complete story here.
In the name of security, government curbs our privacy and rights. A paradox in the post-September 11 era is that people seem willing to accept government intrusions but not commercial ones, even though the government’s power is enormous and often wielded in secret, while consumers retain substantial control over their commercial information. Full article here.
BIG BROTHER WILL BE WATCHING AMERICANS
“[The Pentagon’s Total Information Awareness program] takes what had been in the realm of paranoid conspiracy theorists and puts it in the realm of a potential reality -- right here and now,” said Jody Patilla, a consultant for the highly-regarded digital security company @Stake. More on this story here.
Was 1984 a how-to book for the US government? Polls show Americans regaining their skepticism of government and demanding that respect for civil liberties figure in anti-terrorist policies. But government officials do not appear to be paying attention. Instead, they seem to be pawing through a copy of 1984 with the idea of using George Orwell’s cautionary tale as a blueprint for an America of the future. Complete article here.
Secret Burial for Bill of Rights: 4th Amendment R.I.P. The amendment, adopted by the convention of states on 17 September 1787, was 215 years old when it died on November 18. The 4th tirelessly fought to guarantee that “the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” It is survived by 26 sibling amendments. The besieged 1st, 6th, and 14th amendments are also fighting for their lives. And the 2nd continues to be held hostage by special interests. Full obituary here.
Ruling for the first time in its history, the ultra-secret Foreign Intelligence Surveillance Court of Review today gave the green light to a Justice Department bid to broadly expand its powers to spy on U.S. citizens. “As of today the Attorney General can suspend the ordinary requirements of the Fourth Amendment in order to listen in on phone calls, read e-mails, and conduct secret searches of Americans’ homes and offices”, says ACLU spokesperson. More on this story here.
HOMELAND SECURITY LAW HURTS NET PRIVACY
Dramatic impact on computer and network security from Homeland Security Department creation. Bill gives the government a major role in securing operating systems, hardware and the Internet, including allowing for more police surveillance of the Net; punishing malicious computer hackers with up to life in prison; establishing a national clearinghouse for computer and network security work; and spending at least half a billion dollars a year for homeland security research. Technology companies praised the plan, which promises to be a cash cow for businesses that develop security products. Complete story here.
Pentagon considered but rejected another surveillance idea: tagging Internet data with unique personal markers to make anonymous use of some parts of the Internet impossible. Complete story here.
The Justice Department’s Operation TIPS program, which would have enlisted tens of thousands of truckers, bus drivers and other workers as citizen spies, is explicitly prohibited in Homeland Security bill. Rest of story here.
US Rep. Ron Paul’s (typically clear-eyed) view on the Homeland Security Department: The lesson learned from the rush to create a Homeland Security department is that the size and scope of government grows regardless of which party is in power. The federal government now devours 40% of the nation’s GDP, and a massive new department can only make things worse. The Homeland Security bill provides a vivid example of the uncontrolled spending culture in Washington, a culture that views the true source of political power - your tax dollars - as unlimited. Rest of column here.
U.S. FOREIGN POLICY - IT MIGHT BE A GOOD IDEA
Despite $trillions spent on defense, our government is unable to defend America from a rag-tag group of Islamic militants. George Washington’s advice was free trade with all nations and political alliances with none. Sounds prescient.
Ron Holland on the Washington Empire’s threat to your liberty, wealth and investment portfolio. In America today, both our politicians and the legal system have become the major plunderers of our wealth. Quoting Frederic Bastiat, “When plunder has become a way of life for a group of people living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it.” America is an empire, not evil but heavyhanded, and while we may be well intentioned like an earlier British Empire, the effects on your liberty and wealth will in the long run be identical to all earlier empires. Full speech here.
STILL THINK IT CAN'T HAPPEN TO YOU? CIVIL FORFEITURE HORROR IN US
A UK citizen living in Florida jailed, held incommunicado, and subsequently made homeless by civil forfeiture action.More on this story here.
Forfeiture Endangers American Rights, the leading group advocating civil forfeiture reform home page here.
LARGEST IDENTITY THEFT RING EVER BROKEN UP
30,000 credit reports stolen with losses now pegged at $2.7 million, expected to go much higher and effect consumers of every state. Prosecutors were still trying to learn how many people had their bank accounts drained, addresses changed, lines of credit opened and new credit cards opened without their approval. The scheme began about three years ago when a help-desk worker sold an unidentified person passwords and codes for downloading consumer credit reports. [Note: Which is consistent with the fact that the weakest security link is usually human in nature, not technical.]More on this story here and here.
FTC identity theft site here.
Identity Theft Resource Center here.
GERMANY AND AUSTRIA, ALONE AMONG EUROPEAN COUNTRIES, SCEPTICAL ABOUT EU SPY RULE
Proposal would compel Internet Access Providers to retain data for up to two years, in case the information became or might prove useful in police or security service investigations into serious crime or terrorism. “Far from bringing more security to citizens, this move is already diverting energy and resources from more effective intelligence activity,” said civil liberties advocate.More on this story here.
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