Asset Protection Strategies, STAFF NEWS & ANALYSIS
IRS Targets High Wealth Individuals
By Staff News & Analysis - April 08, 2010

The Internal Revenue Service has launched a new global program to target what it calls "high wealth individuals," IRS Commissioner Douglas Shulman (left) said Monday. "Through our new global high wealth operating unit we are taking a unified look at the entire web of business and economic entities controlled by high wealth individuals so we can better assess the risk such arrangements pose to tax compliance," Shulman said at the National Press Club on Monday. Shulman said the IRS is using "our robust and evolving enforcement program that ensures that everyone pays what they owe." – CNS New

Dominant Social Theme: Fairness needs to be enforced.

Free-Market Analysis: This is a very interesting development in that it would tend to confirm the perception of the Daily Bell that the US has been engaged for quite some time in the projection of its influence beyond its borders not to support regulatory democracy or for general purposes of aid, but to position itself to enforce governance worldwide. Perhaps Mr. Shulman is planning a name change for the IRS to a more suitable description such as the "International" Revenue Service. Heck, they could even keep the same acronym.

The intention to pursue enforcement around the globe is both noteworthy and ambitious. Yes, the idea of building a seamless web of enforcement around the globe is indeed a "game changing" innovation. It marks another definitive step toward a global order. Here's some more from the article:

The IRS initiated its Global High Wealth Industry group in the fall. Schulman told an October 26 meeting of the American Institute of Certified Public Accountants that it would be part of "the globalization of tax administration," which he called a "game changing trend" in tax enforcement. "While we are in the early stages of this work, this new unit will centralize and focus IRS compliance expertise involving high-wealth individuals and their related entities – which can often have an international component," Shulman said. "Tax agencies around the world, including those in Japan, Germany, the UK, Canada and Australia, have also formed high wealth groups." …

Shulman also mentioned the program at the George Washington University International Tax Conference in December. "So what's our game plan here?" Shulman said. "At least initially, we will be looking at individuals with tens of millions of dollars of assets or income. Going forward, we will take a unified look at the entire web of business entities controlled by a high wealth individual, which will enable us to better assess the risk such arrangements pose to tax compliance and the integrity of our tax system. We want to better understand the entire economic picture of the enterprise controlled by the wealthy individual and to assess the tax compliance of that overall enterprise," he said. "We cannot do this by continuing to approach each tax return in the enterprise as a single and separate entity. We must understand and analyze the entire picture.

"Over the past few months, we have begun hiring some agents and specialists, such as flow-through specialists and international examiners, to conduct examinations of high wealth individuals and their related enterprises," Shulman said. "In due course, we will grow the new unit by adding examination agents and individuals with specialized skills and expertise, such as economists to identify economic trends, appraisal experts to advise on valuation issues, and technical advisors to provide industry or specialized tax expertise," Shulman said. "We will also build new risk assessment techniques to identify high income and high wealth individuals and their related enterprises that should be reviewed holistically."

The Bell has pointed out on numerous occasions that the real reason for nation building may have little to do with avenging 9/11 or even with strategic issues. The power elite tends to offer a tripartite rationale for its more aggressive actions, in our opinion. In Afghanistan and Iraq the initial reason for the invasions had to do with a projection of force to punish those who may have been involved in an attack on American soil. But as Iraq had apparently not been in involved in the 9/11 attack and as the Taliban and bin Laden both denied an involvement as well, the initial rationales were if not suspect at least controversial.

The second rationale is always less obvious than the first and may be established via articles, clues, hints and other sorts of information. In the case of the invasions of Afghanistan and Iraq, a series of suggestions might lead one to believe that it was oil or global military-politics that were behind the invasions. But the real reason to go into Afghanistan and Iraq, and the reason to spend what is now upwards of several trillion dollars and many thousands of lives is simpler than that, in our opinion. It has little to do with "surrounding Russia" or ensuring that Israel or Western allies or corporations shall have access to the real-estate necessary to construct an oil and gas pipeline. These overlays are beside the point. The actual pursuit of this strategy is very simply to project Western power into regions that had previously rejected it.

The world today is increasingly organized around regulatory democracy, which gives the power elite the ability to control the agenda from behind the scenes. Countries that have tribal hierarchies are more immune to this sort of command and control. The actual convenience of a democracy is that it provides the power elite with a select handful of "leaders" that may be manipulated into global courses of action.

What is the reality (versus the rhetoric) as it involves this announcement? The stated reasons for IRS global enforcement is to ensure tax compliance. A secondary and unspoken reason, but one evident nonetheless, is to create a global enforcement institution that can be used for numerous purposes and will in all likelihood be endlessly expanded and elaborated on. The third and even more important reason is simply to ensure that the edicts of Western governments – no matter what they are – are enforceable around the world.

The Bell has often pointed out that the roots of civil society are binary. Great civilizations arise from small, congruent societies (1) living side-by-side adhering to similar customs and speaking the same language but (2) not initially being subject to a broader governance. This allows the societies to flourish individually and lay down an entrepreneurial base. If one state is oppressive, people merely migrate to another without inconvenience. This establishes a cultural pattern in which the contiguous states are not overly authoritarian but compete with another for productive citizens. We see this pattern over and over, whether in Greek nation states, Rome's seven hills (and seven separate initial societies) the Renaissance with its nation states and the "these united States" with 13 separate (and initially un-united) colonies.

Only later on does consolidation take place, but by then the culture of freedom has been established. In later stages, such free civilizations may become more oppressive; the final flourish is usually empire. Ironically, modern observers (state-schooled historians) often conflate the dying stages of a civilization – the empire and its "great" works" – with the actual vitality of its antecedents, the separate, entrepreneurial societies that came together centuries earlier to form the foundation that evolved into the dying empire.

Seen from this perspective, history shows us that civil society flourishes when the state itself and its leaders are fully aware that the most productive citizens have lifestyle options outside of a single grasp. If the ambitions of successful citizens are easily crushed and their contributions suppressed, then society itself is the loser. Innovation gradually declines. Opinions outside the norm are not tolerated because they do not need to be.

After Thoughts

e consolidation of state power worldwide may be seen as a reasonable evolution. But there are prudent reasons to forego overly aggressive attempts at forging such alliances. The more seamless the web of state enforcement, regulatory and otherwise, worldwide, the more opportunity there is for abuse. If there is no countervailing force, no sense among the leaders of tomorrow that their edicts may be vitiated by a lack of full enforcement ability, then the state itself will doubtless grow more unreasonable and its demands more draconian. Power corrupts and absolute power corrupts absolutely.

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