Bruce Krasting
December 24, 2011
Two headlines. Similar stories. The first from Switzerland:
US OFFERS SWISS BANKS A DEAL
The United States authorities have offered to lift the threat of legal action against 11 Swiss banks in exchange for information, a Swiss paper reported on Sunday.
This is part of a very long story. The US Justice Department has been doing everything it can to get the names of US citizens who have Swiss bank accounts. The DOJ damn near busted UBS over this a few years back. Now they are going after the other Swiss banks. The lawyers at the DOJ don’t kid around:
“Give us the names or we’ll sue the shit out of you”.
Given what happened to UBS ($780mm in fines), the other banks have no choice but to fold and hand over the info.
This second story ratchets things up a bit and brings it home:(Link)
FEDERAL JUDGE GREEN LIGHTS IRS SEARCH FOR CALIFORNIA GIFT TAX CHEATS
A federal district court judge has given the Internal Revenue Service permission to serve a “John Doe” summons on the California State Board of Equalization demanding the names of residents who transferred property to their children or grandchildren for little or no money, from 2005 to 2010.
The IRS has used John Doe summons to seek lists of American taxpayers unreported offshore accounts at Swiss Bank UBS and at HSBC’s bank in India.
These pushy techniques have worked well in Switzerland. The hard working folks at the DOJ/IRS are now bringing them to California. This means that the IRS can look at anyone’s real estate transactions. With John Doe warrants, they can go fishing/snooping wherever they like.
Think what you will of this. The country is starved for revenue. The outfit that is charged with collecting that revenue has an army of tough-minded lawyers behind it. It will have the power to turn over stones as it pleases. In the end this effort will raise some additional revenue. It will scare the crap out of a few folks as well. Some will cheer this. I see the John Doe warrants as a big and dangerous step on a very slippery slope. It sure won’t do much for Uncle Sam’s image.
Unrelated Note:
In my forecasts for 2011 I said:
-Kim Jong-Il will die. His son will take over. The heir is a nut, there will be more military exercises that results in shells landing on S. Korea soil. China will make public statements that it is trying to bring order; behind the scenes they will be applauding the chaos.
I got the first part right. I believe I will be right on the second part too. This could get very messy. Fast.
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