*While most Americans were focused on flowers and candy on Valentine’s Day, the Internal Revenue Service was focused on another sweetspot. The agency launched its latest amnesty program for off-shore account holders just as the current tax season heads into the seven-week home stretch.
It’s the IRS’ second amnesty program in as many years. In 2009 the agency caught 15,000 U.S. tax payers with hidden accounts by levying a $780 million fine against the Swiss bank it claimed helped them to commit tax evasion.
That prompted bank officials to give up the names of their American customers. When the IRS threatened to embarrass those account holders with negative publicity, some of them handed over $400 million from those offshore accounts. Now the IRS tastes blood in the water.
This time around it is sending more supeonas to more banks forcing them to provide more names of their offshore account holders or face sanctions. Under the new program, account holders found to be hiding money will face a 25 percent penalty on the highest annual amount, compared with the usual penalty of 50 percent for each year.
Let me see if I understand this correctly: If you’re a law-abiding citizen who follows the rules you owe 100% of your tax liability; if you’re smart enough to hide your money in an offshore account and your bank snitches on you, then you only have to pay half of your tax liability thanks to the amnesty program; but if you’re a presidential appointee with a net worth in the millions of dollars you don’t owe any capital gains tax on profits made after selling conflict-of-interest stocks on the companies you worked for and now most likely will create laws to protect. Did I get that right? If you detect a bit of cynicism and eye rolling it’s because I despise a bully whether they appear in a school yard or hiding behind the US tax code. But I digress.
As part of President Barack Obama’s new budget proposal for the Treasury Department, the IRS will get money to help catch tax cheats, including those with offshore accounts. But while the feds are leaving no stone unturned when it comes to everyday people who might owe only thousands of dollars, they give presidential passes to people like former treasury secretaries Henry Paulson, Robert Rubin and Paul O’neil. Ever since the Ethics and Reform Act of 1989, anybody who is a presidential appointee is exempt from paying capital gains tax on any assets they sell in an effort to appear beyond reproach. Without the benefit of this legislation, Paulson would have owed taxes on the sale of $500 million worth of Goldman Sachs stock he held as CEO of that company when he was appointed treasury secretary in 2006.
Simple math leads me to conclude that if all people – including presidential appointees – were held to the same tax laws, the IRS would have collected more from the last three former treasury secretaries alone than they did through the 2009 Amnesty program that snagged 15,000 people.
These and other facts make it hard for me to be excited about most politicians and their façade of integrity. Instead of creating laws and programs to police the masses, they should spend more time policing themselves. If you follow the money it leads right to their doorstep.
Steffanie is a freelance journalist living in the Dallas, Texas metroplex. Send questions, comments or requests for speaking engagements to Steffanie at [email protected]. And see the video version of her journal at youtube.com/steffanierivers.