Tax haven Feed

Puerto Rico has been in the news a lot this year, and not for its attributes as a Caribbean vacation spot. Coast Guard Barque Eagle sailing past the 16th-century Fort San Felipe del Morro in San Juan, Puerto Rico, on May 21, 2014, as it head for a four-day port call. Image courtesy the Defense Video & Imagery Distribution System and Wikimedia Commons. The U.S. island territory has been criticized for being a tax haven for wealthy Americans. Its overall finances have come under scrutiny after Puerto Rican leaders wanted to declare bankruptcy to write off its $72 billion debt.... Read more →

You can't blame tax cheats if one of Martha and the Vandellas' biggest hits has been playing on a loop in their heads of late. Thanks to a new global effort, tax evaders will have nowhere to run to, nowhere to hide. Crossing borders to chase down tax cheats: Tax Inspectors Without Borders, or TIWB, is a new initiative from the United Nations (UN) and the Organization for Economic Cooperation and Development (OECD). Its goal, is as its name indicates, is to send trained tax professionals from richer OECD nations into other, less-developed member countries to help beef up tax... Read more →

The economy has picked up, but times are still tough for many, including Uncle Sam. He loses millions every year in tax money because people don't pay what they owe. Some of these so-called tax gap losses come from accounts U.S. taxpayers have in other countries. The Internal Revenue Service has been trying for years to locate these accounts and get the taxes due. Remember, we have a worldwide tax system instead of, like most other nations, a territorial tax system. Territorial vs. worldwide taxes: Under a territorial system, taxes are paid to the country in which the money is... Read more →

The Vatican takes scripture seriously, especially Mark 12:17. "Jesus said to them, 'Render to Caesar the things that are Caesar's, and to God the things that are God's.' And they marveled at him." It's not quite amazement, but it is definitely interesting to see the Holy See signing on to the Foreign Account Tax Compliance Act. Panoramic photo of St. Peter's Square, the basilica and obelisk, from Piazza Pio XII in Vatican City courtesy I, Dfmalan via Wikimedia CC. FATCA, FBAR facts: Known in tax-speak at FATCA, this federal law generally requires U.S. citizens and resident aliens to report any... Read more →

Everything is bigger in Texas. While millions of Americans were filing their annual tax returns on April 15, Internal Revenue Service lawyers were in Dallas Bankruptcy Court filing what is believed to be a record $3.23 billion in tax liens against a Dallas man and his late brother's estate. Sam Wyly and his older brother Charles, who died in a car crash in 2011, were well-known Dallas businessmen, philanthropists and at one point very rich. They amassed fortunes buying, expanding and then selling companies, including Bonanza and Ponderosa steakhouses, Michaels arts-and-crafts stores, Green Mountain Energy and Sterling Software. In 2006,... Read more →

In case you missed it as the 113th Congress wrapped up its frantic lame duck days, it did manage to keep Internet access for most folks safe from taxation for another fiscal year. One of the provisions packed into the $1.1 trillion federal spending package passed in mid-December was an extension of the moratorium on local and state taxes for Internet access through October. A quick note for all y'all logging on in Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Wisconsin and alongside me here in Texas. We'll still see taxes on our Internet providers' bills because the taxes... Read more →

Domenico Dolce and Stefano Gabbana, founders of the high-end Italian fashion label Dolce & Gabbana, are no longer convicted tax evaders. Italy's highest court on Oct. 24 overturned two lower court convictions that the duo had participated in what Italian prosecutors called a "sophisticated tax fraud" scheme. Dolce and Gabbana had been found guilty in April 2013 of using a Luxembourg holding company to avoid paying taxes of €200 million ($253.39 million U.S. as of this morning's exchange rate) on royalties for sales in 2004 and 2005. That sizable chunk -- I'm going with the more than $253 million U.S.... Read more →

Fashionistas are wrapping up a month of shows that have taken them from New York to London to Milan and now Paris. One big name designer, however, might not be paying as close attention as usual to the City of Light's catwalks this week. A couple of Prada executives have taxes instead of tailleur on their minds. A month of global fashion weeks, during which designers preview their coming spring and fall clothing lines, concludes this week in Paris. Click the image for a glimpse of what the rich and famous might be wearing in early 2015. Prada chairwoman Miuccia... Read more →

The biggest complaint about the U.S. tax system is that it gives Uncle Sam too much of our money. There are lots of contenders for the next biggest tax complaint. One, however, is getting special attention right now. It's the dissatisfaction with the Internal Revenue Code's worldwide reach. The ability of Uncle Sam to tax money earned all over the world has come under scrutiny thanks to the recent rash, Walgreens notwithstanding, of corporate tax inversions. An inversion is an administrative process by which a U.S. company buys a foreign subsidiary and then on paper makes that overseas business the... Read more →

Walgreens, the Deerfield, Illinois-based drugstore chain that's been around for more than a century, is buying the remaining 55 percent of the British pharmacy Alliance Boots. Walgreens had purchased 45 percent of the European pharmacy/retailer in 2012. But unlike many other U.S. companies who've been scooping up overseas operations, Walgreens will not make Great Britain it's official headquarters. The company announced today that Walgreens Boots Alliance, the company that will exist when cash-and-stock deal is finalized sometime next year, will be based in the Chicago area. No corporate inversion planned: Many business, finance and tax watchers had expected Walgreens to... Read more →

The debate on the use offshore tax havens has been heating up. On the individual side, the Internal Revenue Service on July 1 got a new tool, the Foreign Account Tax Compliance Act (FATCA), to track down international accounts the tax man says are used to avoid paying Uncle Sam his due. On the corporate side, the conversation about offshore tax havens went off the charts when the iconic, 114-year-old pharmacy chain Walgreens -- the inventor of the malted milkshake, for heaven's sake! -- announced it was considering moving its headquarters from Deerfield, Illinois, to Switzerland to lower its tax... Read more →

U.S. residents' tax focus this past week was the Internal Revenue Service's latest crackdown on offshore accounts. The dreaded Foreign Account Tax Compliance Act, or FATCA, took effect July 1, giving the IRS another tool to track down international accounts that U.S. citizens use to avoid paying Uncle Sam his due. But one person's tax hell is another person's tax haven. Do you know what tax haven country is home to this ancient castle? That's right. The good old U. S. of A. is considered a fine tax haven for Oz residents looking to pay a little less to the... Read more →

Today is the one day that residents of drought-stricken Texas don't want rain. We want our July 4th fireworks! Of course, we ostentatious celebration loving Texans still realize that one errant spark can ignite a whole swath of dehydrated vegetation. That fiery possibility is probably why we don't object to paying the Lone Star State's tax on fireworks. Limited sales, added tax: Texas fireworks retailers have been collecting a 2 percent fireworks tax in addition to the state and local sales taxes since 2001. Specifically, the tax applies to "small fireworks in the U.S. Department of Transportation's 1.4G category that... Read more →

It's a busy weekend, what with Flag Day and Father's Day and some personal things to take care of, so I'm cutting to the chase with my regular look at noted last week at my other tax blog. First came the news that the Internal Revenue Service has officially adopted a Taxpayer Bill of Rights. This has been a long-time goal of National Taxpayer Advocate Nina Olson, who joined IRS Commissioner John Koskinen to announce the move. Both also used the opportunity to send a message to Congress. The IRS can do a better job of providing customer, i.e., taxpayer,... Read more →

The ability of some major U.S. corporations to avoid domestic taxes by setting up subsidiaries in offshore tax haven countries has gotten a lot of attention of late. But not every company can pull that off. A recent New York Times analysis found that for every Apple, with its 14 percent tax rate on $135 billion in earnings (that comes to a tax bill of just less than $19 billion), there's a KeyCorp, with its 150 percent effective tax rate on $1.33 billion in earnings, resulting in $1.99 billion taxes paid. The newspaper put the corporate tax data into a... Read more →

Taxes, tax havens and how Uncle Sam deals with folks who don't pay what they owe is always a good topic for a lively exchange. This last week was full of such discussions. While federal lawmen were wrapping up some individual tax haven evasion cases, another battle in the corporate tax haven war broke out. Growing offshore businesses: The first volley in the corporate tax scuffle was fired on May 19 by Citizens for Tax Justice (CTJ), a nonprofit research and advocacy organization whose goal is "to give ordinary people a greater voice in the development of tax laws." A... Read more →

The Swiss women's Olympic hockey team took home a bronze medal today, but in the eyes of the Internal Revenue Service, that country is the gold standard for offshore accounts. For years, the IRS has been encouraging U.S. taxpayers who have foreign accounts to 'fess up about where they keep their money. The Offshore Voluntary Disclosure Program, or OVDP, and related efforts offer incentives for taxpayers to disclose their offshore accounts. As long as they pay their delinquent taxes, interest and slightly reduced penalties, they won't face criminal prosecution. They IRS doesn't like the term tax amnesty, but that's essentially... Read more →

Italian fashion designers Domenico Dolce and Stefano Gabbana have officially filed an appeal of their tax evasion conviction. Both men were sentenced in June to one year and eight months each in prison after being found guilty of contributing to tax declaration omissions in the 2004 sale of some of their clothing lines to Gado, a Luxembourg-based holding company. The sale, argued prosecutors, allowed Dolce & Gabbana, as their brand is known, to avoid Italy's high rate by paying a lower tax in Luxembourg. D&G have consistently denied the charges. Their 90-page appeal document, filed this week at Milan's courthouse,... Read more →

"Stay (Faraway, So Close)" isn't just the title of a U2 song. It's a good description of the popular Irish rock band's tax situation. The band, fronted by Bono and The Edge, has sold more than 150 million records and is estimated to be worth around €805 million ($1.1 billion U.S.). And like lots of businesses and their wealthy owners, U2 found a way to reduce its taxes. U2 moved part of its operation from its native Ireland just across the North Sea to Holland in 2006 to take advantage of that country's lower tax rate. The reason? Ireland capped... Read more →

"You now have a Swiss bank account if anybody asks. Crédit Nationale Du Génève code name 'PADDY.' Lavish awkward gesture; all of 15 Swiss Francs in it. But if you ever want to impress anybody, they can find out you have a Swiss account. But Swiss law prohibits the bank from revealing the balance. Thus are all men made equal." Jimmy Dell, a character in the 1997 movie "The Spanish Prisoner," offered that description of the secrecy afforded an owner of a Swiss bank account. Jimmy's words are no longer true. Opening up accounts: Thanks to the Foreign Account Tax... Read more →