Wednesday, August 17, 2016

Sheppard resists "tax haven dream": Global cost of tax avoidance

“Money’s only something you need in case you don’t die tomorrow.” 
– Carl Fox (Martin Sheen)

‘Scotland has become a money-laundering factory for Soviet criminal gun-runners’ The Sunday Herald

Whistleblowers linked to Australia amd Singapore: the naked capitalism issue - isolation of whistleblowers

Exclusive: Some shell companies sidestep new UK transparency rules Reuters. H/t Richard Smith, who adds: Well, not *that* exclusive

Apple has a funny way of naming its holding companies

The Apple bulls of the world like to throw around this stat: The company has upwards of $230 billion cash on hand. It’s an impressive number, but it carries an important caveat: Most of it is sitting abroad. Apple can’t bring it home without paying approximately 40% in taxes, and CEO Tim Cook has long refused to do that.
What Apple is doing is perfectly legal, as far as the U.S. tax code is concerned. Still, that the world’s largest company by market capitalization is parking overseas a sum roughly equivalent to the GDP of Finland has invited plenty of controversy. Some critics say that Apple has a duty to bring the money home and pay up, given that most of its critical research and development work happens in the U.S. (Apple is separately facing a European investigation into its tax practices.)

Panama Papers: Iceland calls elections six months early in wake of scandal 

Panama Papers Redefining corruption: Public attitudes to the relationship between government and business

Scots firms fronting for global financial betting websites condemned as ‘scam’ The Herald 

The SEC has questions about a company with no revenue, $1,000 in the bank, and a $35 billion market cap Business Insider
Cellist Told By Airline She Needed A US Visa For Her Instrument

Ruth Mason (Virginia), Citizenship Taxation, 89 S. Cal. L. Rev. 169 (2016):
The United States is the only country that taxes its citizens’ worldwide income, even when those citizens live indefinitely abroad. This Article critically evaluates the traditional equity, efficiency, and administrability arguments for taxing nonresident citizens. It also raises new arguments against citizenship taxation, including that it puts the United States at a disadvantage when competing with other countries for highly skilled migrant.

ABA Tax Section Press Release:
William H. Caudill, a partner in the Houston, TX, office of Norton Rose Fulbright, has been selected to chair the American Bar Association’s Section of Taxation, the nation’s largest organization of tax lawyers. Mr. Caudill will serve a one-year term, to be succeeded by Karen L. Hawkins, of Yachats, OR, who will serve as chair-elect.

Dublin unit of US hedge fund with $8bn assets pays $125 tax 

New York Times, Researchers or Corporate Allies? Think Tanks Blur the Line:
Think tanks, which position themselves as “universities without students,” have power in government policy debates because they are seen as researchers independent of moneyed interests. But in the chase for funds, think tanks are pushing agendas important to corporate donors, at times blurring the line between researchers and lobbyists. And they are doing so while reaping the benefits of their tax-exempt status, sometimes without disclosing their connections to corporate interests.
Thousands of pages of internal memos and confidential correspondence between Brookings and other donors — like JPMorgan Chase, the nation’s largest bank; K.K.R., the global investment firm; Microsoft, the software giant; and Hitachi, the Japanese conglomerate — show that financial support often came with assurances from Brookings that it would provide “donation benefits,” including setting up events featuring corporate executives with government officials, according to documents obtained by The New York Times and the New England Center for Investigative Reporting.
DSC_3530_medium-1Whether driven by righteous indignation or plain envy, the bandwagon for a crackdown on tax avoidance by the super-rich and multinationals has gathered pace since the Panama Papers revelations. Hartley Milner looks at some of the actions pledged and asks whether there can ever be fairness in our tax systems.
The global cost of tax avoidance

The UK Parliament's All-Party Parliamentary Group (APPG) on Responsible Tax recently published its first report [UK PARLIAMENTARY GROUP HIGHLY CRITICAL OF BEPS: SAYS IT IS JUST "STICKING PLASTER" UNTIL TAX SECRECY IS SWEPT AWAY] : A more responsible global tax system or a "sticking plaster"? An examination of the OECD's Base Erosion and Profit Shifting (BEPS) process and recommendations .
The 21-page report said the OECD had "done well" to build international consensus and has made major progress in gaining cross-country agreement on sharing tax information. However, the Group believed that the BEPS rules are not enough. The Group believes that the BEPS Action Plan will fall short of creating the fair and transparent global system that is needed to tackle global tax avoidance. New global tax rules are ‘just a sticking plaster'...

LatAm Criminals Suspected of Stashing Drug Money in U.S. Shell Companies Nearshore Americas

Panama Papers: Pieth says officials are in denial as he quits

More than 100 Americans Are Rich Enough to Buy the Presidential election outright  

Serious Fraud Office opens Airbus corruption investigation 

HMRC outlines basic tax standard for accountants 

HMRC: the standard for agents 

This NYT article offers a good introduction, with quotes from noted federal judges in SDNY (Kaplan Rakoff, et al., about the vanishing criminal jury trial.  The myth is that juries delivery better community justice and service on juries makes better citizens.  See Benjamin Weiser, Jury Trials Vanish, and Justice Is Served Behind Closed Doors (NYT 8/7/16), here.  But, the system from overcriminalization and the resulting smorgasbord of choices given to prosecutors virtually compels a plea agreement in the overwhelming number of cases that are charged.  The NYT article is by no means a complete analysis of the issue, but it does introduce the issue in a straight-forward and understandable way. The Vanishing Federal Criminal Jury Trial

Australian Taxation Office cracks down on Singapore sales hub profits The Australian Business Review

The Hill: Trump’s Pushback on Tax Return Release Reveal True Ambitions, by Edward Kleinbard (USC)

United States v. McBride, 2016 U.S. App. LEXIS 13479 (10th Cir. 2016), unpublished, here, involves a relatively common scenario -- a U.S. taxpayer who adopts a claimed sincerely held belief that he does not owe tax in mask his tax evasion.  

The prosecutor then turned to refuting the sincerity of McBride’s beliefs, arguing they constituted a disagreement with the law, which does not satisfy the good-faith defense. He concluded rebuttal with the following:

 Ladies and gentlemen, having earned millions of dollars, Mr. McBride decided to pick up the bogus philosophy to try to save what he had left. To him paying taxes, it seems, is for schmucks, working stiffs like you and me, who go to work everyday, earn our keep, and pay our taxes. He placed himself above that. It's the ultimate irony, ladies and gentlemen, that Mr. McBride, who speaks so passionately about his love for the Constitution, has taken a course that would present a great danger to the Constitution of the United States. The Constitution is based on a few bedrock principles that we hold dear. One of them is that we are a nation ruled by laws, not by men. There are very few countries that can say that. 
Taxpayer Loses Cheek Defense at Trial and, on Appeal, Fails in Argument of Prosecutor Misconduct

If you've ever wondered where your state's lottery money goes, read Ballotpedia's fact check for a lesson in research.  And here's Reboot Illinois' fact check on an official's disturbing statement about heroin-related deaths

Agent wins case after HMRC fails to answer the phone 

Donald Trump's campaign manager and the '$12m payments listed in secret Ukrainian ledger' 

Trusts keep wealth in the hands of the few. It's time to stop this tax abuse

Steven J. Oshins, a Nevada lawyer who specializes in estate planning, has never met the wealthy software entrepreneur Dan Kloiber, but he is nonetheless intensely interested in Mr. Kloiber’s contentious divorce. “I have had a Google news alert on that for a couple years,” Mr. Oshins said as he discussed the case from his office in a squat pink complex about a 20-minute drive from the Las Vegas Strip. What animates Mr. Oshins is not the juicy marital feud, but the legal arcana governing a trust in Delaware where the Kloiber family parked assets worth hundreds of million of dollars, sheltered from estate taxes

Eric D. Chason (William & Mary), Taxing Losers, 18 Fla. Tax Rev. 541 (2016):
The U.S. tax system (like most in the world) benefits capital gains in two ways. Investors can defer paying tax until they “realize” any gain (typically by sale) rather than when the gain simply occurs via rising prices. And, individual investors pay a lower, preferred rate on their long-term capital gains as compared to their other ordinary income (like compensation or business profits).

Canadians for Tax Fairness concerned about inaction on Panama Papers National Union of General and Public Employees

Mauritius: Tax-haven twilight The Africa Report

One single aristocrat just avoided more in inheritance tax than the entire NHS deficit 

Duke's £9bn inheritance prompts call for tax overhaul The Guardian
“For people who are really wealthy, inheritance tax has become an optional choice”: TJN director John Christensen

US Whistleblowers Are Poised to Collect $100 Million  

'I think it is a terrible mistake': Ex-Sears executive says Walmart just wasted $3 billion on 

Who owns Britain? How the rich kept hold of land  

Indonesia to Open Its Own Tax Havens to Rival Singapore 

Ukip aide indicted in US on charges of blackmail and money laundering