Marketwatch.com ran a commentary on August 25, 2011 discussing the long arm of the IRS reaching into Canada. The IRS is using its power and influence to track down American citizens in foreign locations to collect taxes. This is a continuing trend.
Some European binary options sites will not accept American investors for fear of the IRS. The IRS can shut down a business in seconds. A company could be stuck in litigation for years. Foreign banks would rather reduce their customer base than deal with IRS laws.
Hiding From the IRS
According to USA Today on April 9, 2013, the IRS employed 90,820 employees. More than 2 million companies are registered in tax havens. The government cannot keep up with all of the wealthy finding ways to hide their wealth.
The estimates for money hidden offshore is amazing. Estimates range from $21 to $32 trillion. This figure is equal to one-third of world GDP. The IRS is losing a lot of revenue due to tax havens.
The same USA Today article noted that tax audits are declining. As the United States government makes cuts, the IRS also suffers. This reduces the amount of money raised in taxes. It is a vicious cycle.
Feed the Poor
American municipalities are suffering from lower budgets. They are being forced to cut services, including welfare and the police. If they had access to the money hidden in tax havens, they could easily feed all of the poor.
Every American tax payer could get a nice big $1,000 check by the proceeds from taxing tax havens. The fiscal cliff could be easily paid for by the revenue lost in tax havens. The American government will turn up its efforts to collect these taxes.
The IRS is a powerful institution. It is involving itself in more countries. But the momentum is on the side of the tax havens. Humans are clever. The wealthy have the means and intelligence to find interesting ways to hide their assets.