MORE FOR THE FISCAL SADISM FILES
The IRS Issues a New Set of FAQs on the Offshore Voluntary Disclosure Initiative Plus More Details on the Consequences of Opting Out
DEAR BUBBAS AND BUBBETTES,
Coming Forward With a Voluntary Disclosure: On June 2, 2011, the IRS issued an updated list of frequently asked questions on the 2011 Offshore Voluntary Disclosure Initiative.
Opting Out of Such a Disclosure: On June 1, 2011, the IRS issued more guidance on how a U.S. taxpayer should proceed both before and after choosing to opt out of the current voluntary offshore account disclosure initiative, or if the individual is removed from the civil settlement structure of the 2009 offshore voluntary disclosure program and the 2011 offshore voluntary disclosure initiative. This Guidance includes several attachments to assist those preparing a taxpayer's documents and discusses the applicable Statute of Limitations.
Both of these IRS publications are attached and should be carefully read. One is a pdf file and the other is a Word document.
Open a Bottle of Good Scotch: You might want start sipping a stiff glass of Scotch, however, while you dive into these shocking new revelations.
Penalties for Ignorant Americans: Each is stunning in the extent to which it elaborates on the very nasty penalties that will be applied to Americans living overseas who may not have ever known they had to be filing these reports. Such ignorance seems to be, by definition, their inexcusable fault and they will now be appropriately punished.
Penalties for Those Who Didn’t Even Know They Were Americans: An even bigger howler is that there are also penalties for individuals who never even knew they were American citizens until some administrative procedure brought this fact to their attention! They too obviously deserve all the punishment that awaits them now.
An Enduring Mystery: It nonetheless remains a great and enduring mystery why any government, especially that of the United States, which sees itself as the ideal model for everyone else to emulate, would want to treat its overseas citizens in such a nasty, brutal and unfair way. No other country has ever done this before, and, most interestingly, none seems to be in a hurry to copy our behaviour here either.
Future Nasty Nuggets: Also, one can only imagine how many other toxic nuggets have also been skilfully hidden in the more than 71,000 pages of the current U.S. tax code. Undoubtedly, inspired by this current example, some future zealots will trot these other similar gems and launch yet more fiscal catastrophes.
How is This Helping Our Trade Performance: And, just for fun, while we try to put some balm on these wounds, how is this supposed to be helping improve the trade situation of a country that now has an unbroken 36 year record of trade deficits that aggregate to more than $7 trillion? This too remains an enduring mystery.
A Manifestation of Insanity? Then again, by making life ever more miserable, expensive and legally dangerous for its own citizens, who have already been long denied the chance to compete on a level playing field in world markets, this does rather clearly seem to be just another shocking manifestation of national institutional insanity on a planetary scale.
But Why? What in the world could be driving such bizarre behaviour, other than profound self-hatred at the highest levels?
What Do You Think About This? Your thoughts and suggestions would be most appreciated.