Monday, February 25, 2008

Save on Taxes – Tax Haven Style

In Lichtenstein!!! Apparently, people from all over Europe (and the US) hid money in the principality of Lichtenstein hoping to take advantage of bank secrecy laws. According to published reports, German (and possibly other) tax authorities bribed a former employee of the LGT Group to turn over stolen bank records.

My thoughts:
1. Saving money on legitimate tax strategies is moral and a fundamental right. When you cross the line into tax evasion, you are likely to face IRS prosecution. Even if you avoid jail, any tax savings are going to be dwarfed by your legal bills.
2. Do not hide money in foreign tax havens. The world is shrinking and you are not likely to get away with it. If you have already done it, I recommend hiring the best lawyers you can afford to get you out of this mess with as little pain as possible. He/she will tell you what to do/say if the feds coming knocking on your door.
3. While the German and UK tax authorities might get away with bribing an employee to “steal” records, US authorities are likely to have trouble getting any evidence gathered by bribing a witness to break the laws of another country. Without researching the issue closely, I suspect a Motion to Suppress would have a 75-80% chance of success.

Other links:
Liechtenstein defies German pressure over banks
Tax experts say German push on Lichtenstein omits own failings

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