In the L.A. Times on Wednesday, June 7, 2000 on the front page there was an article about the country of Sealand and how two people, Roy and Joan Bates, have been living there for many years with their "own" country. Quoted in that L.A. Times article, written by Marjorie Miller and Richard Boudreaux, is the following statement: "Sealand is just a speck in a postmodern archipelago of real and virtual ministates born of puckish claims by free-spirited pioneers and con artists.
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Second citizenship | 
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There are a number of perfectly legitimate reasons for securing a second
citizenship. These may include a) a U.S. expatriation tax plan (where
$45,000 for an economic citizenship is worth it if you save more than this in tax); b) the desire to live and work in another country; c) insurance against draconian law in your existing country ranging from genocide to money controls. If anyone wants to receive a package of information which maps out the various ways of getting second citizenships (including naturalization, lineage, and economic programs) then send an email to dsl@globalrelocate.com. This material also provides a consumers guide to evaluating programs and service providers.
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Second passport |
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1) Securing a second passport depends upon your needs. If it is for a name change or to open an offshore account, we have seen citizenship passports from Africa selling for as little as US$4,000. These
are not good for travel since they require visas. Currently certain
countries in the West Indies and Central America offer passports from
$40,000.
2) Many countries offer second passports for numerous reasons. Some are
offered to children or grand children of nationals who emigrated to
other countries, while others are offered to foreign workers and/or
investors who bring in specific skills and capital for national
economic development. More and more Americans are taking on second
passports these days as they offer many benefits and this trend has
been growing for quite some time. The second passport can permit you
to live and work in another country with a minimum of problems. It
can facilitate international travel as well as offer greater opportunities for privacy and freedom abroad. Most importantly, a
second passport can offer a greater degree of personal protection
because a US passport can make you a target for international
terrorists. Remember, the only way to know who is an American or not
is by the passport. During the Iranian Hostage Crisis, the Canadian
Embassy helped several Americans get out of Iran safely by issuing
them Canadian passports. A passport can make all the difference in
the world!
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An offshore trust privately administered without any public recordation.
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Section 1035 exchange |
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A domestic insurance policy can be exchanged for an offshore insurance policy for asset protection. This must be done after the period where the U.S. insurance company's surrender charges no longer apply. There are still no regulations taxing such exchanges. The laws of the foreign jurisdiction would apply to creditors' attempts to access the cash value of the policy. First, there would be the transferring the U.S. policy to an offshore trust, since a foreign insurer will not always issue a policy
with a U.S. person as owner. The offshore trust will add another layer of protection and, if desired, can be drafted as a life insurance trust to keep proceeds out of the taxable estate. [attribution: Asset Protection Forum, rpi@sky.net.]
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Self-liquidating loan |
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There is no such thing as a "self liquidating loan". This is a scam run by numerous people, who will tell you that they need a "finders" or "administrative" fee up front in order to set the deal up, usually between two or three different parties. After a period of time, you
will be told that all is progressing well, and they just need some more
expense money to finally secure the deal. Once they have parted you
with this money, they will try again for more.
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Self-settled trusts |
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Available in the states of Rhode Island, Alaska, Delaware and Nevada. Still untested in the courts.
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See transferor and annuitant.
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Series LLC's or Series LP's |
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A Delaware statute was the first to authorize these types of formations. For further reading, see an article in CCH's Taxes Magazine (March 2000 issue).
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Service provider |
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Financial planner, CPA, attorney, estate planner, or consultant.
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A pseudo-check where there is a credit debit card charge against the customers checking account.
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Shield companies |
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An offshore IBC or exempt company with bearer shares that may be used for money laundering in a tax havens.
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Schultz, Harry D. |
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Author of a number of investing books in the 1970s, advocate of second passports and safe harbours to stay at offshore. Claimed to be the highest paid financial consultant.
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See Letter of Wishes/Memorandum of Wishes.
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Most international banks will not clear third party checks because
of frequent fraud and laundering. One form of laundering involves what
is commonly known as smurfing by using third party cheques.
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Socially responsible investing (SRI) |
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Investing in stocks that are screened based on companies' social and political policies. It is gaining new acceptance among money managers, according to the experts.
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Sociedades Anónimas (S.A.) |
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A limited liability company, for example in Mexico or other Spanish speaking country. For instance, in Mexico there are two types of corporate entities that allow a limitation that the shareholders/partners can establish an economic limit to their personal liability in respect to corporate debts or liabilities. These entities are the "sociedades anónimas" and the "sociedades de responsabilidad limitada." Only the second of these type of entities uses the Spanish cognate for the English word "Limited". [attribution: INT-LAW list]
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Solvency, declaration or affidavit of |
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Executed in writing by a candidate grantor (settlor) in a foreign APT before his or her transferring assets to the APT. The grantor declares that no fraudulent transfer is taking place, and that under the laws of the state of residence of the grantor, a solvency
calculation has been made, and the client will be solvent after the transfer is made to the offshore trust (APT).
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South Sea Bubble |
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Led to a speculative frenzy and the first stock market crash in London in 1720. The scheme involved buying up England's national debt and trade it in return for a trading company monopoly in the South Seas (hence, the name) and South America.
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Sparbuch (also Ueberbringersparbuch) |
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1) A former Austrian type of bank passbook savings account, opened for you, without even the bank knowing your identity. No longer being provided.
2) In Feb. 2000, the newly elected government of Austria announced the
following limitations: (a) no further deposits on AUSTRIAN SPARBUECHER will be accepted after 1st November, 2000, WITHOUT PRESENTATION OF AN IDENTIFICATION DOCUMENT (b) withdrawals OF EXISTING AUSTRIAN SPARBUECHER are possible under the actual "regime" until 30th June, 2002
Since the demise of the Austrian sparbuch, similar services may be obtained from banks in Latvia and Belize. With their anonymous bank account, the physical holder of the passbook is the owner of the funds. If you lose the book or have it stolen, your money is gone. A useful tool, but one to be used cautiously. This decision by the Austrian government is one of the results of negotiations between the EU Commission and Austrian officials in Vienna.
3) The Austrian Sparbuch is clearly a relic of the past. Austria has bowed to the pressure of the tax protectorates of the European Union. It is no longer possible to open an anonymous account there and existing accounts above a certain balance will be subject to a 7-day hold upon withdrawals and also will be subject to scrutiny by the Austrian police.
4) You need be awakened to the realization that the Austrian “Sparbuch” is a concept of the past.
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Special needs trust |
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"It would seem to be a risky proposition to establish a trust without specific special needs provisions. That would seem to give the state great room to argue that the trust assets should not be ignored for determining eligibility for governmental support purposes. If the necessary restrictive provisions are not clearly stated it may be very hard to argue that they exist at all. At the very least, such an arrangement would invite litigation. A recent U of Miami Institute had an extensive review of provisions that could be added to an irrevocable trust to give an appropriate trustee a myriad of amendment rights. That would surely be the much safer approach."
Attribution: ABA-TAX@ABANET.ORG
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Stock market manipulation. Placing phantom bids for large
purchase orders and immediately cancelling them. This has the effect of
causing others to be lured into buying the stock. The stock is then dumped
by the pretender at a higher price. This causes very high volatility in the
stock market.
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Spurious passports |
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Spurious passports have the appearance of a passport, but are issued by organizations with no authority and to which no official recognition has been given. Such passports are therefore not an acceptable statement of either nationality or identity. Spurious passports and other documentation known to the authorities are:
- A.D.E.H. Association D’Entrade Humanitaire International (International
Humanitarian Society)
- Anishinabek Ojibway American Indian nation
- Antigua (State of)
- Carolingian Bernician States and Dynasty
- Castellania Grand Master of the Order of Free Templars and Prince of
Castellania
- Centre d’Information Corps Diplomatique et Consulaire
- Colonia (Kingdom of)
- Conch Republic
- Confederate States of America
- Confederation Mondiale des Correspondants Diplomatiques
- Cornish passports
- Corps Diplomatiques of the United States
- Corterra (Republic of)
- Department of Foreign Affairs Silver Card
- Ecumenical World Patriarchate
- Empire Washitaw de Dugdahmoundyah
- Haudenosaunee Mohawk American Indian nation
- Hutt River, Hutt River Province and Principality originally claimed to be an independent American Indian nation in Canada, but now claims to be an
independent state in South West Australia.
- Imperial Constantinian Military Order of St. George
- International Biographical Association
- International Humanitarian Society
- International Parliament for Safety and Peace
- International Society for Krishna Consciousness
- International Solidarity Centre
- Iroquois Nation held by some American Indians who are also American or
Canadian citizens
- Khalistan used by some Sikhs seeking the separation of the Punjab from
India. Issued by persons claiming to be the "Khalistan Government in Exile"
based in Gravesend, Kent.
- Knights of Malta also known as The Sovereign Principality of St John
- Koneuwe (Republic of) KOmmunist NEUtral WEst is someone’s back garden in
Zurich, Switzerland
- Kosmopolitan passport
- Maori Kingdoms of Tetiti and Polyaesiea the Titi or Mutton Bird Islands off
the South Island of New Zealand, declared "independent" in 1985 by their
"King and Absolute Ruler"
- Melchizedek (Dominion of) claims to be a transnational state with no
definable national borders
- Mohawk Nation held by some American Indians who are also American or
Canadian citizens
- Nation of Israel
- Neue Slovenische Kunst (NSK) Slovenian Art Collective
- Nishnawbe-Aski held by some American Indians who are also American or
Canadian citizens
- North American Indian Nation Government
- Oceanus
- Organisation of African Unity
- Paisos Catalans Catalunya/Cataluña is a region of Spain
- Palmerya (Principality of) believed to be an uninhabited Hawaiian island
- Parliamentary passports
- Patriarchate of Antioch
- Planetary passports
- Romano or Roma passports
- Romano Jumako Khetanipe
- San Cristobal (Republic of)
- Sealand (Principality of) in the North Sea off the coast of Harwich, it is a concrete gun tower built in 1942
- Service d’Information
- Symbolic European
- Texas passports
- Trust Territory of the Pacific Islands
- UNO (United Nations Office, Inc.)
- Vera Cruz (Free and Independent State of)
- Wikingland/Vikingland Furstentum Wikingland (the Viking Principality)
- World Parliamentary Confederation of Chivalry
- World Service Authority available in both standard and diplomatic versions,
these documents are so popular even counterfeit copies of them have been
identified
Further information on the "World Passport" from the World Service Authority
can be found here.
This organization is the brainchild of Gary Davis, who as far back as 1945,
articulated the concept that "world citizens" should refuse to travel on
passports issued by individual countries. In defiance of such countries, he
issued his World Passport. It's a 40 page document printed in 7 languages: English, French, Spanish, Russian, Arabic, Chinese and Esperanto. Each passport is numbered, each page contains the World Citizen logo as background. Four pages are reserved for affiliate identifications: diplomatic corps, organizations, firms, etc. There are twenty five visa pages. Inserted in the inside back cover is a complete medical history with blood type, vaccination
record, allergies, etc., also space for home address, next of kin, doctor, insurances, driving license no. and national passport/identity number. The cover is blue with gold lettering. In other words, it looks just like a "real" passport. According to the World Service Authority, five countries have officially recognized it: Burkina Faso, Ecuador, Mauritania, Togo and Zambia.
[attribution: OPC International, Inc..]
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Stanford International Bank |
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Located in Antigua, it is owned by Allen Stanford. He used to own a Montserrat bank until he relinquished the license in 1989/90.
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A Cayman Islands form of a purpose trust.
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State Education Savings Programs and creditors |
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Alaska's soon to be implemented program contains special asset
protection features. The statute states the account is not an asset of
either the participant or beneficiary and may not be involuntarily
transferred. Because only the earnings are subject to the 10% penalty
if the funds are restored to the participant, this could conceivably be
used by the participant in the future.
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1) A German word for foundation which is used in some civil law jurisdictions, such as Liechtenstein, in a similar fashion to a trust. Assets are endowed on the entity for a specified purpose generally (similar then in concept to the "purpose trust") and managed pursuant to the governing instrument. Some are formed for the benefit of individuals and some for charitable purposes. The difficulty under U.S. tax law is whether the entity will be taxed as an association if it has corporate characteristics. [attribution: ABA-PTL Digest]
2) Liechtenstein offers a number of structures, which are unique and
versatile. Foundations [the Stiftung] and Establishments [the Anstalt] are perhaps the most valuable for a U.S. or Commonwealth citizen regarding privacy and control. These are both separate legal entities, but without traditional share or equity holders. This lack of direct ownership provides for their special stand-alone structure. And once properly funded, there is no trace back to its creator.
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A contractual right to purchase a specified number of shares of corporate stock, at a set price, for a specified period of time.
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Sub-part F income |
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1) This is offshore income to U.S. persons. It is extremely difficult to define, but it includes most kinds of investment income and most kinds of business income that is derived from dealing with related persons or entities in the US. Buying from a related or affiliated US person or entity or selling to a related or affiliated US person or entity is generally going to generate sub-part F income that will be currently taxable to the US shareholders of a CFC.
2) A "U.S. Shareholder" (a U.S. person owning 10% or more of stock of the offshore corporation) pays income tax currently on their pro-rata share of a CFC's "Subpart F Income" even if that income is not distributed to the U.S. Shareholder.
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Suspicious activity report (SAR) |
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U.S. banks are required to report on any bank transaction if the bank believes it to be "out of the ordinary". When a bank identifies any "unusual transaction patterns" they might file a SAR with the U.S. Treasury Financial Crimes Enforcement Network (FinCEN).
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1) An acronym for The Society for Worldwide Interbank Financial Telecommunication. Founded in 1973, and based in Brussels, Belgium, it is a bank cooperative. With more than 2,850 members it operates through the world in more than 137 countries and maintains a state of the art security system for financial soundness. Further details by telephone to their New York office at 1-212-558-6920.
2) A conditional SWIFT is a funds transfer method which uses SWIFT protocols to transfer funds conditionally between banks, subject to the performance of a specified party.
3) All accounts in US funds, going offshore, will clear through a New
York correspondent bank.
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Available in Switzerland, providing regional banking, an institution without international operations. They have correspondents that do connect them to a wide range of services, including Swift wire transfers. |
International tax attorney, J. Richard Duke, calls to our attention an
IRS notice issued Dec. 27, 1999 attacking the use of "contrived steps"
involving paper losses, offshore corporations and partnerships said to
produce allowable deductions for federal income tax purposes. The IRS
bulletin advises that only bona fide losses supported by economic
consequences are permitted; that all persons involved in such schemes,
including clients, promoters and others will be liable for full taxes, penalties and interest. [attribution: IRS Notice 99-59, 52 Internal Revenue Bulletin 761 and article entitled "Tax Avoidance Using Distributions of Encumbered Property" by J. Richard Duke, JD, at http://www.assetlaw.com ] |
When tax benefits are part of a jurisdiction's economic development program. These measures fall into one or more of the following categories: a tax exemption (tax holiday for a specified time interval); a deduction from the taxable base income; a reduction in the rate of tax; or deferment of taxation until a later date. Some tax holidays are permanent ones if the company is incorporated in a no-tax offshore jurisdiction and the company does no business within that jurisdiction.
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Tax evasion is a crime in the U.S., and a "predicate offense" for money
laundering. If you assist a client in "covering up" the tax evasion in "cleaning" the money, then you are guilty of money laundering.
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Tax exempt companies |
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Allowed under IRC section 501(c)(3). But, there are other exempt entities under section 501 which are clearly non-charitable, purely business entities. Under Section 501 an organization is exempt if it is organized exclusively for charitable, fraternal, etc. purposes. A non-profit is allowed to invest its funds, but it is not supposed to do
business. If it is generally involved in business then it is not being operated exclusively for an exempt purpose. Investing in a partnership is akin to doing business. Further because a partnership or LLC is a flow-through entity, operational income is reported directly to the charity (as opposed to a Corporation) which has its own tax bracket. Because operational income is paid to the Charity, it is deemed to be unrelated business income. (Section 513). The more unrelated business income an organization receives, the more likely it will run afoul of the exempt purpose requirements. It is a UBIT issue, based a facts and circumstances test. This makes non-profits even more leery since they don't really know where the UBIT line is. [attribution: ABA-TAX@ABANET.ORG.]
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Depending how one classifies a countries attributes, one author claims that there are currently some 218 jurisdictions that offer special incentives to foreign investors. What is even better is when the tax haven is also among the best places on Earth to vacation.
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1) The Internal Revenue Manual, Audit, defines "tax protester" as any individual who advocates and/or uses a 'tax protest scheme,'" and defines "tax protest scheme" as "an scheme without basis in law or fact for the ostensible purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by either interfering with such administration or attempting to illegally avoid or reduce tax liabilities."
2) There are literally dozens of Federal court cases every week in which
disillusioned tax protestors who attended a seminar or read the wrong book challenge the U.S. constitutionality of the income tax system. Usually, the challenge is dismissed, the tax protester is forced to pay the tax with interest and penalties, plus additional court costs for raising such frivolous arguments. Income tax is constitutional if the courts say so, and the courts have universally very clearly said so.
3) Here are a number of resources where you can find more information:
4) U.S. courts have consistently turned a deaf ear to any claims that
the US income tax is not a legal tax under the US Constitution.
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Tax treaties between countries provide for the exchange of information and administrative assistance. But they do not speak to reciprocal tax collection activities.
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Taxable Presence (UK)/ Permanent Establishment (US) |
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This relates to the law regarding taxation of business profits. For a country to tax a company's profits it must usually be first established that the company is carrying on business in that jurisdiction. This is done by showing that the company has a 'taxable presence' in the UK or a 'permanent establishment' in the US.
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1) The U.S. is one of the few countries in the world which taxes on the basis of citizenship, residence and domicile.
2) The UK does not impose tax on the basis of citizenship. There are
important distinctions between the English law of domicile and the American approach. The persistence of domicile of origin is at the
root of the differences.
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Taxpayer's lament |
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(1)
Tax his cow, Tax his goat;
Tax his pants, Tax his coat;
Tax his crop, Tax his work;
Tax his ties, Tax his shirt;
Tax his chew, Tax his smoke;
Teach him taxing is no joke.
Tax his tractor, Tax his mule;
Tell him, Taxing is the rule.
Tax his oil, Tax his gas
Tax his notes, Tax his cash
Tax him good and let him know,
That after taxes, he has no dough.
If he hollers, Tax him more;
Tax him till he's good and sore.
Tax his coffin, Tax his grave,
Tax his sod in which he's laid.
Put these words upon his tomb,
"Taxes drove him to his doom."
After he's gone, we won't relax.
We'll still collect inheritance tax.
(2)
A businessman on his deathbed called his friend and said, "Bill, I
want you to promise me that when I die you will have my remains
cremated."
"And what," his friend asked, "do you want me to do with your ashes?"
The businessman said, "Just put them in an envelope and mail them to
the Internal Revenue Service and write on the envelope, "Now you have
everything."
(3)
4/15/00 - GLOBAL LIST OF INFAMY:
Tax expert Jack Anderson of Ernst & Young has become well know for his comparison of various rates of taxation in a select group of countries. He aptly calls his list "The Misery Index" and updates it periodically. To arrive at his rankings, he adds up the top marginal rates in several tax categories such as corporate income tax, personal income tax, supplementary income tax, wealth tax, employer social security, employee
social security and sales tax. Below are some of the counties and their
respective scores from his most recent findings:
- France -- 193.0
- Belgium -- 171.1
- Sweden -- 150.5
- Germany -- 143.0
- Spain -- 138.7
- Switzerland -- 125.0
- Japan -- 123.6
- Great Britain -- 109.7
- Ireland -- 109.5
- USA -- 90.0
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This new word is defined as a U.S. citizen/expatriate who renounces his or her citizenship in order to avoid payment of U.S. Tax. The first appearance of the word was in Forbes magazine. ("And Don't Come Back", Nov. 18, 1996). Forbes link here.
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Technical Advice Memorandum (TAM) |
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It is a request by a local IRS office or the taxpayer or both to the IRS national office for guidance to ensure the local IRS office is following the national office line. A TAM very likely results in appeals, and possibly tax court. [attribution: Tax law discussion (www.ABA-TAX@ABANET.ORG)].
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The U.S. Treasury Department maintains a data bank which is known by the abbreviation TECS, the full name of which is not know to the author of this lexicon. TECS stores the names and other information of federal tax delinquents. This data bank is routinely referenced to by U.S. Customs agents at international points of entry.
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See imminent risk of dying.
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A term for the participation in the buying and the selling of bank debentures. A scam program.
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A specified part of a larger transaction. Each purchase and resale of a separate block of bank instruments within the total transaction is known as a tranche. For example, a contract may be signed to buy 100 million US dollars worth of bank paper with an initial tranche (or purchase) of 25 million US dollars. In Feb. 2000, an AT&T Tracker stock offering was initiated, which was
expected to consist of a U. S. tranche and an international tranche, to be
held in the spring of 2000, following an approval vote by AT&T shareholders
on March 14, 2000.
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The person or organization that receives property in exchange for an annuity; also known as the buyer or obligor.
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The annuitant who transfers property for the annuity; also known as the seller of the property.
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Treasury bills or T-bills |
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For U.S. T-bills the face value on these instruments is only valid on the expiration date. T-bills are typically 30 year instruments, which means like a savings bond, they have a current value equal to what you are paying for them plus a brokerage commission for the firm selling them. Also, no "treasuries" are registered in clients' names since 1986, which means if you transfer them anywhere, you are giving them
away much like a bearer certificate where possession equals ownership.
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Triple witching |
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The quarterly expiration of stock options, stock index options, and stock index futures contracts. Triple-witching creates additional volatility in the marketplace.
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1) A contractual arrangement between the owner of property (the grantor), a beneficiary and a manager of the property (the trustee) whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
2) The writing creating the trust is called a trust deed. The trust deed must provide a detailed account of the trustee's responsibilities or it becomes a discretionary trust.
3) While a trust should is considered an entity for IRS tax purposes, in reality it is a relationship between trustee and settlor, depending on Civil or Roman Law.
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A normal trust deed contains clauses that cover the transfer of the trust fund to the trustee from the settlor, subject to the terms of the trust (or
settlement) deed, as well as a provision whereby the trustee can accept further
property as part of the trust fund (normally the fund is settled with a nominal
gift) and the major assets are transferred later by a gift or funded by loans.
One clause will contain a statement as to the length of the trust period and
another clause will include a statement that lists the beneficiaries by name
and/or class. Additionally, the deed will include a clause that will define
the powers and duties of the trustee and a statement as to the law to which the
trust deed is subject. It will also include a statement appointing a protector
to direct the activities of the trustee and a statement of the person or company having the power to appoint new trustees and the procedure for appointing them. Furthermore, it will define the period during which income may accumulate. [attribution: The Harris Organisation]
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Trust protector |
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1) The trust protector of a trust is generally granted limited powers. They should be limited to not much more than hiring or firing trustees -- which singular power can accomplish a wide range of goals if utilized aggressively. Some enlarge the protectors powers raising questions as to who the protector really may be, whether the protector is a quasi-Trustee, or a super-Trustee, or otherwise tantamount to a Trustee. Perhaps the protector is really a quasi-Settlor or is the protector in a sense the assignee of retained powers of the Settlor? [attribution: ABA-PTL list]
2) You might appoint an individual "trust protector" or a committee consisting
of several people, including relatives and nonrelatives. This committee
would have the power to change trustees. If the removal power is given to a
beneficiary, it might not take affect until a certain time or it might be
exercised no more than once every five years.
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Turks & Caicos Islands |
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Turks & Caicos Islands offer a UK type of international corporation (the Westminster model) with favorable differences, such as permitting true bearer shares, having no taxes, being a politically stable country, using the English language, providing easy communications, and all at reasonable formation costs.
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Creator of the "colato" and author of the book "Tax
Free, How the Super Rich Do It". Turner has served 18 months in prison for
income tax related violations. The book advocates the use of "colatos",
which stands for common law trust organizations, and advises how to convert earned income in the United States to tax free foreign source income. The advocated structure is clearly an abusive trust.
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Ultrahigh net-worth individual |
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Those individuals who have assets of more than $30 million. Because of stock options and executive stock plans, their ranks are rapidly rising. The last report indicated that there are more than 514 billionaires in the world of which more than half of them live in North America.
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Uninsurable claims |
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Generally means a unit representing an ownership interest in an LLC.
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Unit linked life assurance |
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These products are single premium bonds which allow individuals to purchase an asset anywhere, provided it's on a quoted exchange. The life company is the owner and beneficiary of the bond, the individual owns the unit's. Normally the applicant is a trust for further security. It is also possible to convince the life company to set up an account in your "time zone" with a trader, so he deals on your behalf and advises the life company quarterly so they can take their administrative fees.
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United States of America |
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The world's largest "offshore" jurisdiction that offers more favorable (capital gains) tax rates to foreign persons than are available to its own citizens, and ultimately, because of a complex litigation system, shields the financial privacy of those who are able to afford the best attorneys, better than anybody else in the world.
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A natual person who is not related to the taxpayer by blood or by marriage, or a legal entity that is not subject to the control of the taxpayer.
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Unsecured contract |
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The general credit of the obligor/transferee is the only form of security available to the annuitant. No collateral or other methods of ensuring payment by the obligor may be utilized.
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U.S.-Canada tax treaty |
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Provides for mutual enforcement of tax obligations between the two countries under the U.S.-Canada protocol. The only such known tax protocol.
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Value Added Tax (VAT) |
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A tax that applies throughout the value-chain in the EU and some other jurisdictions, whereas sales tax jurisdictions (e.g. the US) apply tax only at the final stage when a consumer buys a product.
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Vanishing premium policy |
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An insurance policy in which the obligation to pay premiums "vanishes" based on a projection.
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Vehicle Forfeiture |
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In late July 2000, the California State First District Court of Appeal upheld an Oakland city ordinance allowing the city to seize any car allegedly used in either soliciting drug deals or prostitution without any conviction of the vehicle's owners. The court ruled that the
city ordinance, in effect since January 1998, does not conflict with
state law on vehicle forfeiture. State law only permits forfeiture if the owner is convicted of a crime in which the car was used. The Oakland measure was the first of its kind in the state and other cities are expected to follow suit now that the Oakland ordinance has been upheld.
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Voluntary Employee Beneficiary Association (VEBA) |
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1) A well-established and completely legal tax-exempt structure formed under IRC 501(c)(9) which in some circumstances allows for very significant deferral of income for a business owner, and many other tax benefits.
2) VEBA plans. IRCode sections 419A and 501(c)(9) provide for the concept of
using a trust to deduct pretax income and let it grow in an insurance product. It will provide asset protection by virtue of the life insurance product. In
addition, it will also allow a better than average income return when cashing out of the policy in the future. The May, 1999 issue of the Journal of Accountancy had a generally favorable article on the subject. [attribution: apf-digest]
3) NEW VEBA RULES: Voluntary Employee Benefit Associations must now provide a
copy of their tax exemption application (form 1023) and the last three
annual Form 990 (annual information return) to any person requesting the
information, according to the August, 1999 Employee Benefits Newsletter
published by the law firm of Shook, Hardy & Bacon, LLP.
4) The IRS recently won a substantial victory against VEBA plans in
Neonatology Associates, P.A., et al. v. Commissioner; 115 T.C. No. 5; No. 1201-97; 1208-97; No. 2795-97; 2981-97; No. 2985-97; 2994-97; No. 2995-97; 4572-97, July 31, 2000.
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Brent Wagman has was sentenced in late 2000 to five years in prison in
Texas and fined $19.7 million for investment fraud. Wagman masterminded
an investment fraud using structures, including sham insurance companies, set up by The Harris Organization financial services group of Panama. Most of the victims were elderly Americans.
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It's called a walking trust since if the cops come for the assets, it disappears.
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A bank used to help evade taxes. A scheme to engage in financial transactions that is alleged to put money beyond the reach of the
IRS and hides identities of its customers.
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Stock-market gains make consumers feel richer than their
salaries and cash savings would suggest, and send them into stores buying.
That is called the wealth effect.
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Western Union Quick Pay |
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With Western Union Quick Pay, the customer of a legitimate U.S. company simply brings cash payment in local currency to any of thousands of Western Union Quick Pay agent locations in more than 90 countries, pays a low fixed fee and obtains a receipt. Minutes later, either a check prints out in the U.S. company's office or a confirmation is received with the funds direct-deposited into your designated bank account.
This service allows payment and receipt of payment to be made outside the U.S. Some companies in the U.S. and Canada use Quick Pay to receive payments from overseas customers and Quick Collect (another Western Union payment service), to receive payments from domestic customers. Companies in countries outside of the U.S. and Canada use Quick Pay to receive payment from both domestic and international customers. Although this is a legitimate service used for legitimate purposes, it also creates opportunities to divert monies offshore and is likely to be scrutinized by the IRS if your company is using the service.
If you want to avoid problems, take some extra precautions to be able to prove that all of your Quick Pay transactions are reflected in your accounting records. [attribution: Offshore Tax Strategies, rpi@sky.net].
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White Collar crime |
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Generally involves tax fraud (evasion, false tax returns, failure to file), money laundering (not only drugs but, any attempt to hide money from an illegal source), offshore banking, asset forfeiture, bankruptcy fraud, environmental fraud and, health care fraud.....
[attribution: TaxDefense]
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Withholding Tax |
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Most countries levy a tax on various types of payment leaving their jurisdiction, including interest, royalties, license payments, and dividends. These payments are 'withheld', hence, 'withholding taxes'.
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The WRAP trust (Wealth, Retirement, Asset Protection) is an ILIT structured so that the Grantor can receive collateralized loans from the Trust at a market rate of interest. Consider using this structure in conjunction with a no load variable life insurance policy for the asset accumulation. You get tax free accumulation, tax free loan proceeds and you utilize illiquid assets inside the estate to repay the loan at death thereby reducing the taxable estate.
[attribution: apf-digest, rpi@sky.net]
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Zumua v. C.I.R., 731 F.2d 1417 (9th Cir. 1984), which held that:
"although the taxpayer may structure a transaction so that it satisfies
the formal requirements of the Internal Revenue Code, the Commissioner may deny legal effect to a transaction if its sole purpose is to evade taxation." Zmuda, 731 F.2d
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