Are you ready to be an unpaid government spy?

This is a rather disturbing article by Simon Black. In it, he discusses the lengths to which the IRS will go in order to insure that we serfs do not escape the chains of our debt enslavement. Among the new tools at their disposal is "FATCA", the Foreign Account Tax Compliance Act. With the recent relevations that Chase (with more to come I'm sure) will place strict limits on the amount of money we may withdraw from our accounts and the total ban on wire transfers, it's becoming crystal clear that capital controls are here and here to stay.

I hope everyone finds some value in the information presented here. Apparently the IRS has fallen on hard times in light of all this government shutdown and sequestration nonsense. Too bad.

According to a recent report from the Treasury Department, 'enforcement revenue' at the IRS has fallen for the second straight year.

Enforcement revenue is what the IRS collects beyond normal tax returns; when an auditor goes out to your office, turns your books upside down, and hands you a tax bill for $25,000, they consider this enforcement revenue.

Tax enforcement is one of the only 'money makers' for the US government; according to the IRS, every dollar spent on tax enforcement generates six dollars in additional tax revenue.

This is an astounding return to say the least. And no doubt, one of the secrets to the IRS's success in generating such a prodigious yield is the culture of fear they have developed.

Over the last four years, 9,504 individuals have been convicted for tax-related crimes. Over 70% of those are sentenced to an average of 44 months in federal prison.

This is an unparalleled intimidation tactic to scare everyone else into compliance. In fact, the Land of the Free is one of the few 'civilized' places on earth where tax issues become criminal matters.

Unfortunately for the IRS, though, the agency's head count has been thinning. They no longer have enough people, and enforcement revenue has been declining.

Ordinarily the IRS supplements its ranks with legions of unpaid spies in the financial sector.

Banks and other financial institutions are required by law to rat out their customers by filing 'suspicious activity reports (SARs)'. Anything that a banker deems in his/her sole discretion to be 'suspicious' can be reported on a SAR. And these reports go straight to the federal government.

Over the years, the agency has aggressively expanded the requirements on who must file a SAR.

Initially it was just banks. Now everyone from brokers to casinos to Western Union agents are required to fill out SARs.

Starting July 1, 2014, though, the Foreign Account Tax Compliance Act (FATCA) will give the IRS a new addition in its ever-growing list of unpaid spies. You.

FATCA is one of the worst laws ever written. In addition to requiring yet more disclosures for US taxpayers who have foreign accounts, FATCA also mandates every foreign financial institution on the planet to share customer information with the IRS.

Obviously this is totally realistic.

But what most people don't know is that FATCA contains an obscure, broadly-written provision that potentially turns every single US taxpayer into a government spy.

You see, the law decrees that if a foreign bank or business does NOT comply with FATCA requirements, then everyone else in the financial system must withhold a 30% penalty on any payment to that bank or business.

Of course, everyone is just supposed to know which foreigners are subject to withholding, and which aren't. Again, totally realistic.

But the bigger problem is that the law very loosely defines who is responsible for making these withholdings.

According to the American Institute of Certified Public Accountants (which is THE authority for tax professionals in the US):

"U.S. taxpayers that have nothing to do with financial services will be required to collect, analyze, document, and report information regarding payments to both foreign financial institutions and nonfinancial foreign entities."

"The FATCA definition of a withholding agent is drafted broadly, and it requires any person, acting in any capacity, having the control, receipt, custody, disposal, or payment of an item of income that is subject to FATCA withholding to have appropriate documentation."

"As a result, all U.S. persons (individuals, businesses, trusts, retirement plans, tax-exempt organizations, etc.) are potentially affected."

The AICPA's analysis on FATCA demonstrates that every American taxpayer, whether they know it or not, whether they have anything to do with finance or not, whether they have any involvement with a foreign bank or not, could potentially be required to monitor, document, and report financial transactions to the government.

So... are you ready to be an unpaid government spy?

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

Published on Oct 2, 2013 - Sherry Peel Jackson, former IRS revenue agent and former CPA, was thrust into the national spotlight for taking a stand against government fraud and theft, and landed in federal prison for three years. The government shut her down at every turn and suppressed evidence of her innocence. Now that she is out she is even more determined to help conscious Americans renew their minds and control their own futures.

She is a true patriot aiming to help the American people emerge from under the thumb of all types of oppression and become empowered to rule their own lives!

On March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration's millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions - Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation's domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It's the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose - the law now says so. Capital Controls are now here and are now fully enforced by the law.

The window to protect yourself from these risks by diversifying internationally gets verifiably smaller with each passing week. There are many ways to internationalize that do not require you to leave your home country. It is not necessary (at least, at the moment) that you immediately leave and become an expat.

However, it is necessary that you develop the options to internationalize before the government closes the window of opportunity to do so. If history is any guide, it won't be open forever. (see above)

In that sense, it is much better to have developed and implemented many parts of your internationalization game plan a year early rather than a minute late.

There are four broad areas of internationalization:

1. Savings: This covers how to setup offshore bank, brokerage, and financial accounts, foreign real estate and "bolt-holes" in case of trouble, moving and owning gold overseas, and structures like foreign trusts that help to legally reduce taxes. Placing your savings outside the immediate reach of your local government ensures that they cannot be trapped in the case of capital controls or outright seized at the drop of a hat, such as what happened when the government became sufficiently desperate in Cyprus.

2. Yourself: Obtaining a second passport from another country and establishing legal residency in foreign countries.

3. Income: The structuring of your cash flows to reduce dependence on any one source in any one jurisdiction. Establishing additional sources of revenue, international investment opportunities and trends, and setting up an offshore company.

4. Digital Presence: This commonly includes your IP address (which can often pinpoint you to a precise physical address), email account, online file storage, and the components of personal/business websites.

Try to picture not being able to cash a check, transfer money electronically, or withdraw more than $385 a day from your bank. Or imagine being searched by airport TSA agents making sure you aren’t taking more than $3,800 of your own money out of the country.

These are the indignities Cypriots must endure after the country’s $13 billion bank rescue. For the first time in the history of the single currency, a euro country is imposing capital controls, even for transfers within the union. It’s as if California barred residents from moving their savings to banks in Oregon. The unfortunate rule of thumb on capital controls is that they are easy to impose, difficult to enforce, and almost impossible to lift.

The screws of capital controls are tightened and our money becomes as insular as a deserted island.

My country; land of the free....?