2010-03-30

U.S. is very broke

In HK seeking tax treaties to silence haven claims (subscription required), there's a passage about U.S. efforts at tax collecting in Hong Kong and China:
In addition to paying local taxes, the 60,000-plus Americans in Hong Kong must regularly declare their earnings to the US Internal Revenue Service, the tax enforcement arm of the US Treasury Department. They must also disclose the combined value of their personal overseas bank accounts if they exceed US$10,000 at any time in a given year.

Since the UBS settlement, the IRS has added 800 new enforcement agents to its overseas dragnet.

In Beijing, Killfoil said she had been authorised to hire five employees to assist her in liaison work and administration of the exchange of information programmes. All the enforcement work is handled by the consulate in Hong Kong, she said.

Permanent and temporary IRS enforcement agents have been posted in Hong Kong. Last autumn, squads of tax officials made trips to the city to audit US tax returns and discuss a voluntary disclosure programme, which offered amnesty in exchange for details of how people hid their money.

By mid-October, 7,500 US taxpayers around the world had voluntarily disclosed offshore accounts.

"We're going to be scouring the 7,500 disclosures to identify financial institutions, advisers and others" who helped taxpayers dodge their tax obligations, IRS commissioner Douglas Shulman said on October 14.
The main relationship between U.S. citizens and their government is increasingly occurring through the tax department.

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