Piercing the "corporate" veil: where is FATCA

“Here’s the thing about black and white. It’s why I was so sad to say goodbye to it. It’s not literal—it is a metaphor, automatically. And my orientation is that that’s the point: a movie is a metaphor. ‘What is the metaphor?’ you ask when you’re trying to solve the problem. If you’re in black and white, it’s partly solved, it is already saying, ‘No, this is not life, this is somethingabout life.’”
~ Mike Nichols, interviewed by Jack O’Brien in Becoming Mike Nichols(HBO, February 22, 2016)

I took it to my local mechanic for a once over to get my "pink slip" which is a roadworthy certificate. This is where I used to have real headaches. Coming from South Australia where one doesn't have to worry about inspections, I found when cominig to New South Wales a "pink slip" usually meant six or seven hundred dollars of work depending on how quiet business was for the mechanic. Bureaucracy and mechanics (sic) combined and my one time mechanical apathy was never a good thing.... Pink Slip Robberies in NSW in a name of Safety or Financial Gains?

Robert Woods, Panama Papers Expose Celebs, Politicians, Billionaires With Offshore Tax Havens Despite FATCA. “Offshore tax evasion could be the sport of kings, and a new data leak from Panama casts doubt on how well it is under control

Parramatta Eels former chief executive officer Scott Seward and ex-team manager Jason Irvine made secret cash payments into a player's overseas account in breach of salary cap requirements, documents obtained by Fairfax Media reveal. Parramatta eels salary cap scandal emails reveal secret offshore payments


Malcolm Turnbull intends on developing high-speed rail links on Australia’s east coast as part of a new funding approach for nation-building projects, The Australian reports.

How hard does Stephen Curry work?

Daniel Davies on the public choice of how tax shelters evolved.

Three Chinese restaurants fired their robot workers Business Insider

FEDERAL MP Clive Palmer had the final say on major spending decisions at his troubled Queensland Nickel refinery even after stepping down as a director, the ABC’s Four Corners program claims. Clive Palmer had final say on millions spent at Queensland Nickel refinery, documents reveal 

Clive Palmer could face up to five years’ jail, bankruptcy and the unravelling of his financial empire after he was found to have siphoned more than $200 million from Queensland Nickel to his other businesses. The rest of his empire could be forced to pay $300 million in debts owed to nearly 800 sacked workers and other creditors, The Australian reports.

ATO investigates Clive Palmer over ‘unusual’ move with a $50m tax twist 

The Financial Times’ Gillian Tett needs to talk to experts on corporate taxation rather than take dictation from the likes of Apple’s Tim Cook. Her current column, A real-world solution to the tax repatriation ruckus, is unabashedly inaccurate and misleading Gillian Tett shows she does not understand offshore profits parrots corporate  propaganda instead  

Watchdog says it wanted to send message of deterrence now rather than face potentially lengthy process over naming names. Why is the federal anti-money-laundering agency tight-lipped about the name of the first Canadian bank found to violate its regulations, but publicly shaming smaller players?  Why did Canada’s money-laundering watchdog keep bank’s name secret?

The Hidden Wealth of Nations – Gabriel Zucman, Assistant professor, UC Berkeley. September 2015, University of Chicago Press.

·        Presentation slides (short, long)

·        Introduction

·        Table of contents

·        Tables and figures included in the book

Supplementary material:

·        Technical appendix 

·        Global offshore wealth: computation of the world’s offshore wealth since 2001

·        Switzerland: offshore wealth in Switzerland since 1914

·        Luxembourg: key data on the Luxembourg economy

·        USA: the importance of tax havens in US cross-border liabilities since 1978

 

Joshua Fershee comments on Wyoming's new LLC provisions on piercing the "corporate" veil:

The additions are a response of a court decision from last year, Green Hunter Energy, Inc. v. Western Ecosystems Technology, Inc., No. S-14-0036, 2014 WL 5794332 (Wyoming Nov. 7, 2014), which is summarized nicely here. The first added section provides:

(c) for purposes of imposing liability on any member or manager of a limited liability company for the debts, obligations or other liabilities of the company, a court shall consider only the following factors no one (1) of which, except fraud, is sufficient to impose liability:

(i)         Fraud;

(ii)        Inadequate capitalization;

(iii)       Failure to observe company formalities as required by law; and

(iv)       Intermingling of assets, business operations and finances of the company and the members to such an extent that there is no distinction between them.  ...

I do have a concern that some courts might miss that the need for "company formalities" as a potential factor for veil piercing is limited only to the formalities that are "required by law," which also means very few such formalities. "Company formalities" are not "corporate formalities," and I hope courts remember this.

I concur. First, much confusion has been occasioned by courts' repeated reference to the "corporate" veil when, of course, the LLC is not a corporation. In addition, LLCs were intended from the outset to be far less formal organizations than corporations, so it is critical that they be required to observe only such formalities as may be specifically required by statute. ("Law" is sadly ambiguous on that score.)
Of course, what we ought to do is to abolish LLC veil piercing altogether, as I have argued:

Courts are now routinely applying the corporate law doctrine of veil piercing to limited liability companies. This extension of a seriously flawed doctrine into a new arena is not required by statute and is unsupportable as a matter of policy. The standards by which veil piercing is effected are vague, leaving judges great discretion. The result has been uncertainty and lack of predictability, increasing transaction costs for small businesses. At the same time, however, there is no evidence that veil piercing has been rigorously applied to affect socially beneficial policy outcomes. Judges typically seem to be concerned more with the facts and equities of the specific case at bar than with the implications of personal shareholder liability for society at large.

A standard academic move treats veil piercing as a safety valve allowing courts to address cases in which the externalities associated with limited liability seem excessive. In doing so, veil piercing is called upon to achieve such lofty goals as leading LLC members to optimally internalize risk, while not deterring capital formation and economic growth, while promoting populist notions of economic democracy. The task is untenable. Veil piercing is rare, unprincipled, and arbitrary. Abolishing veil piercing would refocus judicial analysis on the appropriate question - did the defendant - LLC member do anything for which he or she should be held directly liable?

Abolishing LLC Veil Piercing (May 2004). UCLA School of Law, Law-Econ Research Paper No. 04-11. Available at SSRN: http://ssrn.com/abstract=551724

NSW police are investigating racist and sexist comments on NSW Greens MP Jenny Leong's Facebook page, allegedly posted by high-ranking police officers. The Newtown MP has referred the 'disgusting and disturbing' remarks, which were allegedly posted and 'liked' by officers, to the Police Integrity Commission. Acting Deputy Commissioner Geoffrey McKechnie said the comments were disappointing and in breach of the police's code of conduct and ethics Police allegedly behind cyber attack on MP

Often dandyish on the page, Wallace Stevens could be vicious in person. He traded punches with Hemingway. He lost 

These New Co-op Apps Show How to Build Worker Power In the Age of Uber In These Times

Blue collar voters: Trade is killing us McClatchy

An Inconvenient Truth About Free Trade Bloomberg

How the $15 Minimum Wage Went From Laughable to Viable NYT

Almost two-thirds of people in the labor force do not have a college degree Economic Policy Institute

Thames Water for sale: Australian investor Macquarie to sell stake 

As states’ work mandates kick in, tens of thousands of people lose food stamps Chicago Tribune

Poor residents were promised Wi-Fi service. The Times found they didn’t get it LA Times

When Zika Hits the US, Poorest Areas Will be Hardest Hit Vice

 Capitalist Deserter Pfizer Just Got a Spanking Bill Greider, Nation

The wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed The Times of Israel

Investors, first catch your unicorn then hang on to it Financial Times (David L). Sequoia taking its book. And this is the same Michael Moritz who warned of “subprime unicorns” a mere six months ago.

Big Board Aims to Keep an Upstart at Bay, but Copy Its Technology Gretchen Morgenson, New York Times

It’s the end of globalization as we know itQuartz