Wednesday, March 09, 2016

Tax Transparency: Money, Money, Money; It's a Rich Man's World

INK BOTTLE“In the millionaire Undershaft I have represented a man who has become intellectually and spiritually as well as practically conscious of the irresistible natural truth which we all abhor and repudiate: to wit, that the greatest of evils and the worst of crimes is poverty, and that our first duty—a duty to which every other consideration should be sacrificed—is not to be poor.”
~ George Bernard Shaw, preface to Major Barbara 

*Facebook gets more from HMRC for adverts than it pays in tax

Why Seniors—Not CEOs—Deserve a Raise Elizabeth Warren, The Nation

Fashion entrepreneur Alyce Tran claims she pays more taxes than Uber

Open Knowledge and the Tax Justice Network yesterday announced the launch of a new initiative in this area: Open Data for Tax Justice. We want to initiate a global network of people and organisations working to create, use and share data to improve advocacy and journalism around tax justice. The website is: and using the hashtag #od4tj.

Tax Commissioner Chris Jordan tells agents to make multinationals pay up Tax Matters ...

'All businesses with operations in Britain have an obligation to pay the full tax due on profits from their activities in this country.
‘It is in their inherent self-interest to recognise – and quickly – that they only prosper with the consent of the societies in which they operate.’

You can get anything on Craigslist! Even dependents, it seems. From a Department of Justice press release

PwC Global Economic Crime Survey 2016: “More than one in three organisations (36%) experienced economic crime in the last two years, with cybercrime affecting almost a third (32%), the highest ever level in PwC’s biennial survey of Global Economic Crime. The PwC Global Economic Crime Survey 2016 interviewed over 6000 participants in 115 countries. Despite the marginal decline in economic crime reported overall, the financial cost of each fraud is on the rise. 14% of respondents experienced losses of more than $1m in the last two years.
I had to laugh at what Richard Brooks, author of The Great Tax Robbery, had to say about HMRC: “The reports of their success are a sort of exercise in fiddling the figures themselves – just like the tax dodgers.” HMRC tax avoidance dispatches greg wise Channel 4

García Lara, Juan M. and Garcia Osma, Beatriz and Mora, Araceli and Scapin, Mariano P., Gender Discrimination and the Monitoring Role of Female Directors Over Accounting Quality (February 15, 2016). Available for download at SSRN:
“Recent research suggests female directors exert more stringent monitoring over the financial reporting process than their male counterparts.

Robert Goulder, Revenue Losses From Profit Shifting: The Numbers Tell a Story (Tax Analysts Blog)

“You probably think that politics are only for people with nothing better to do, but if you really knew what was going on in the world, you would think very differently about it.”
Butterfly, Insect, Macro, Animal, Nature, Spring

"Trust No One as  IRS Whistleblower Awards Jump 98%"
The IRS's Whistleblower Office has released its FY 2015 Annual Report to Congress

Illicit financial flows: the links to peace and security concerns  

VimpelCom Limited and Unitel LLC Enter into Global Foreign Bribery Resolution of More Than $795 Million; United States Seeks $850 Million Forfeiture in Corrupt Proceeds of Bribery Scheme 

A bankruptcy judge ordered rapper 50 Cent to come to her courtroom and explain several pictures posted on social media websites that show him playing with stacks of cash. Judge Ann Nevins told the 40-year-old entertainer’s lawyer that his Instagram photos are raising questions about whether he is being truthful about his financial situation…Earlier court papers put a spotlight on three pictures of 50 Cent, whose real name is Curtis James Jackson III, with bundles of cash. One picture showed cash piles in his fridge…Another showed him arranging bundles to spell out the word “BROKE.”
Peter Reilly, Oxymorons In The Tax Law Can Not Be Fixed With Clever Ideas. “The clever idea that Larry and Dora Williams had was to generate some passive income to abosorb their passive losses.”

Bloomberg:  Google Isn’t Paying the ‘Google Tax’, by Jesse Drucker

Jimmy Carter calls US campaign finance ruling ‘legalised bribery’ Guardian 

Career Corner. Reminder: Don’t Let Inside Information Turn Into a Career Limiting Move (Leona May, Going Concern). “Regardless of how you learn the inside information, don’t trade on it. Regardless of whether or not you’ll explicitly benefit, Don’t share the information -– especially not with your greedy brother-in-law.”

NY Times Dealbook (2013)

New York Times Deal Book: Corporate Inversions Aren’t the Half of It, by Steven Davidoff Solomon (UC-Berkeley)

"If you thought there was a problem with inversions — deals that allow American companies to relocate their headquarters to lower their tax bills — wait until you hear about the real secret to avoiding corporate taxes. It’s called earnings stripping, and it is a technique that the Obama administration has so far failed to stop. ..."

Meredith R. Conway (Suffolk), Money, Money, Money; It's a Rich Man's World: Making the Corporate Tax Fair

Indonesia to Facebook, Google, and Twitter: Pay local taxes or we'll block you

Audit (2016)

Global Tax Fairness (Thomas Pogge (Yale) & Krishen Mehta (Tax Justice Network, eds.) (Oxford University Press, 2016)

Tax evasion costs government over 400 billion dollars a year. We suggest enforcement efforts can be strengthened by redesigning the tax return to take advantage of social psychology research, and industry experience with data-driven systems
Using the 'Smart Return' to Reduce Tax Evasion

The GAO reports that the IRS's enforcement of the tax law is at high risk for fraud, waste, abuse, and mismanagement U.S. Government's Fiscal Years 2015 and 2014 Consolidated Financial Statements (GAO-16-357R) (Feb 25, 2016):
Every 2 years, GAO provides Congress with an update on its High-Risk Series, which highlights federal entities and program areas that are at high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of broad reform. ... Another area included in the High-Risk Series that could affect the federal government’s financial condition in the future is the Internal Revenue Service’s (IRS) enforcement of tax laws, including reducing the net tax gap—the difference between taxes owed and taxes paid—which was last estimated to be $385 billion.

Making it easy for the thieves. An appalling story in Tax Analysts today tells how the IRS leaves e-file identification numbers vulnerable: Flawed Authentication May Have Exposed E-File PINs (
$link Now ungated – thanks, Tax Analysts!). Luca Gattoni-Celli writes on how primitive verification procedures facilitated an automated attack that compromised up to 101,000 taxpayers

Wall Street Journal, Ticket to a Tax Audit: $1 Million:
The sum of $1 million doesn’t go as far as it used to. But increasingly, it is enough to get you special attention from Uncle Sam.
Voluntary disclosure schemes for offshore tax evasion: an analysis
TARC, Jan 2016. We show when a tax authority optimally gives incentives for truthful disclosure, and when it does not. The analysis yields practical design insights for policymakers.

Carrie Miller (J.D. 2016, William & Mary), Note, Parting the Dark Money Sea: Exposing Politically Active Tax-Exempt Groups Through FEC-IRS Hybrid Enforcement, 57 Wm. & Mary L. Rev. 341 (2015)

The most common perpetrators are ‘business insiders’, management and employees, with frauds attributable to management averaging $3.3m which is around double of those committed by non-management employees. They are closely followed by professional criminals which includes organised crime at $2.9m
Fraud Barometer: The face of Australian fraud in 2015

This Threat Landscape and Good Practice Guide for Big Data provides an overview of the current state of security in the Big Data area. In particular, it identifies Big Data assets, analyses exposure of these assets to threats, lists threat agents, takes into account published vulnerabilities and risks, and points to emerging good practices and new researches in the field. To this aim, ongoing community-driven efforts and publicly available information have been taken into account Big Data Threat Landscape

Math Is Hard, IRS Edition (Russ Fox). The actual number was more than 700,000. And the unsuccessful attempts didn’t total 10,000; they totaled 500,000!”

Back from the dead: charities regulator now to be ‘retained’ The federal government said Australia’s charities watchdog was dead, buried and cremated. After wandering around zombie-like for almost three years, the body will now be fully resurrected. *Media release  

American Fortune 500 corporations are avoiding up to $695 billion in U.S. federal income taxes by holding $2.4 trillion of “permanently reinvested” profits offshore

IRS: Efforts To Access Taxpayer Accounts Twice As Bad As Originally Thought (TaxGrrrl)

A while back, Congress voted to curb soaring compensation for corporate officers by limiting tax deductions. Here’s how it went wrong.
Wealth, jobs and pay inequality are big political issues this presidential primary season, and they’re bound to become bigger once the parties pick their nominees. In the plethora of plans candidates tout for tackling these problems, one favored tool stands out: the federal tax code.
But trying to legislate corporate behavior and economic fairness — however you define fairness —

Through lax IRS controls, the IRS lets a thief file a return in your name. You go through a long, exasperating process to straighten things out. Meanwhile, the IRS sits on your refund, even though it promptly wired cash to the thief. Then they give you an IP-PIN and assurance that it won’t happen again.
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