Saturday, June 7, 2014
The long arm of the United States Internal Revenue Service (IRS)
Although it is a fact that any U.S. citizen or U.S. permanent resident who earns income from anywhere in the world have to report it to the U.S. IRS so that they can be taxed but the implementation of the law was very relaxed and sometimes ignored outright. Many Americans and permanent resident have account in the millions of dollars in secret and not so secret accounts in tax haven countries of the world out of the prying eyes of the tax authorities of the U.S. All this operation was running smoothly when we encountered this great recession some years ago and then the Congress and the IRS woke up to the problem and starting tackling it on aggressive basis. Although they went for the ones who are truly and fabulously wealthy, they went after banks who were holding American citizen's accounts on which they were not paying taxes. And all of a sudden or I should say a slow moving storm gathering steam suddenly the IRS is going after each American who have held overseas account. Now the news came that around 77,000 international banks have agreed to cooperate with the IRS in identifying and informing that about the accounts of all the American citizens and permanent residents to them so as to avoid being shut out from the world's biggest economy. I know that they did not do it voluntary and more may be in discussion to hand over the details but that shows how far the reach of the world's biggest economy and militarily powerful country can achieve if it puts its influence and pressure onto other countries.