Wednesday, August 31, 2016

Grassroots and Taxes: Still Going Over The Top

Dance to a new tax tune entitled OVDP (--- Offshore Voluntary Disclosure Program), by Robert S. Steinberg of Palmetto Bay, FL, sung to the tune of “Tonight,” by Leonard Bernstein & Stephen Sondheim, from West Side Story... 

The entire point of life is to be noticed. You want people to notice you. Otherwise, what’s the point? Why even bother. When I’m walking down Fifth Avenue and someone doesn’t peek at me at least a little bit, I give them a little shove. “Hey buddy! Here I am. Deal with it.” 

And it isn’t enough just to be noticed. I could walk down the street in a clown suit and people would notice. I don’t want that. I want respect. I want to be respected. Respect. Noticed and respected. The best way — the only way — to get both immediately is to look important. Gary would probably say something completely impractical like “do good work and respect will come.” Who’s got time for that? That’s probably why I’m in Nevis and he’s in his office writing product reviews. (He probably doesn’t even know where Nevis is.) The arrogant tax lawyer guide to looking important 

Corruption Currents: U.S. Pays Millions to BHP Billiton Whistleblower WSJ

HMRC too fragmented and failing to address customer service 

Billions in Losses Trigger Danish Overhaul of Taxation Model 

Confronting tax fraud, Denmark will hire tax inspectors instead of firing them  

Jack Townsend, Congressional Staffer Charged with Failure to File. “I post this item because it is unexceptional and exceptional for failure to file cases.”

Leslie Book, Tax Crime Snapshot: Ministers, Congressional Staffers and Restaurant Owners. “Politico reported this week that ‘Isaac Lanier Avant, chief of staff to Rep. Bennie Thompson (D-Miss.) and Democratic staff director for the Homeland Security Committee, allegedly did not file returns for the 2009 to 2013 tax years.'”

Great political figures tend to be inspired not by wealth or comfort but by honor and recognition. Few tempted by ambition are about to resist it... Importance of Being 

Europe plans news levy on search engines Financial Times

The US Treasury just declared tax war on Europe   Efforts around the world to crack down on tax dodges by businesses and wealthy individuals via overseas tax havens are making progress. A draft criteria compiled by the OECD to beef up international rules on taxation is likely to be formally approved at the Group of 20 summit in Hangzhou, China, early next month, with the number of countries taking part in the framework for such efforts expected to top 100 by the end of the year.

Stop International Tax Havens

These 2 tax havens rank above Switzerland on per capita  

Panama Papers Prompt Race for Tax Haven Dollars Before Crackdown 

 HMRC secured 13 offshore specific prosecutions since 2009

In United States v. Morrison, ___ F.3d ___, 2016 U.S. App. LEXIS 14888 (5th Cir. 2016), here, an appeal from a trial by Judge John H. McBryde (ND TX), the Fifth Circuit affirmed the taxpayers' convictions.  The Fifth Circuit's opening gives the background relevant for the present discussion (bold-face supplied by JAT):
Running a profitable small business is notoriously difficult. But the clients of a tax preparation service run by a husband and wife, Gladstone and Jacqueline Morrison, brought business failure to a new level. Year in and year out, the vast majority of the clients submitted tax returns showing sizable business losses. A federal jury provided the following explanation for this seeming anomaly of unlucky clients: the Morrisons helped their clients prepare returns with fake business losses so the clients could obtain refunds rather than pay the taxes they owed Via Jack Townsend Federaltaxcrimes

U.K. Threatens Tax Evaders With Fines Three Times Unpaid Taxes

August Tax Justice Network podcast: are the big four accountancy firms really the ‘big one’?

David Herzig, House Staffer is a Tax Protester? (Surly Subgroup). “I mean, who at payroll in Congress is green-lighting the stopping of withholding?”

National Law Review, Taxpayer Argues First Circuit Should Not Follow Tax Court Decision by Judge Indicted for Tax Fraud. “The taxpayer’s brief argues that the Tax Court opinion in Bank of New York Mellon should not be followed because ‘the judge in that case—Judge Diane Kroupa—faced a disabling conflict when she rendered” the opinion due to the fact that she was indicted for tax fraud in April 2016 and was under audit by the IRS and allegedly committing further tax fraud at the time she was considering the Bank of New York Mellon case.'”

Wall Street Journal, Republicans Take New Tack on Taxing Companies’ Overseas Profits:
President Ronald Reagan once chided government’s approach to the economy as following this mantra: “If it moves, tax it.”
Today’s Republicans are following Mr. Reagan’s ideas by trying the exact opposite approach. The tax plans from House Republicans and presidential candidate Donald Trump stop aiming at the moving target of U.S. companies’ foreign profits. Their plans would alter existing rules so thoroughly that companies would get little advantage from cross-border tax maneuvers they perfected over decades and move the U.S. toward taxing immobile parts of the economy. 
Department of Justice Press Release, Congressional Staffer Charged with Failure to File Tax Returns for Five Years:
A congressional staffer was charged yesterday with five counts of willfully failing to file a tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
HMRC: Tough new sanctions for offshore tax evaders

Russ Fox, Paying Employment Taxes Is Optional…Until You Get Caught. “If you want to visit ClubFed, having employees and not remitting payroll taxes is a quick and easy way to do so.”

Jack Townsend, Sentencing for Defendant Implicated in Early UBS Disclosures. “Lying to the IRS or being economical with the truth in submissions to the IRS where full cooperation is required is a no-no.”

Farewell to Jan Farrell

Bloomberg: What Is Amazon’s Core Tech Worth? Depends on Which Taxman Asks, by Gaspard Sebag & David Kocieniewski:
Jeff Bezos’s relentless focus on user experience has helped him make Amazon the most valuable e-commerce company in the world. But regulators in Europe and the U.S. say that the value Amazon places on the technology behind that experience varies radically depending on which side of the Atlantic it’s on—and which appraisal will lower its tax bill.

Frank Wolpe (Bentley), Getting Back to the "Grassroots" of Tax Administration: Because "We the People" Long For a Gathering of American Eagles to Restore Trust in the Internal Revenue Service with A Rebuild IRS Initiative49 Akron L. Rev. 863 (2016)

Assets of Scottish shell firm seized amid probe in to allegedly corrupt Ukrainian MP Herald Scotland 

Hundreds of Scottish PFI schools now owned by offshore funds 

Tax Vox: Federal Taxes Are Very Progressive, by Robertson Williams:

The US federal tax system is highly progressive, primarily because individual income tax rates rise sharply with income and refundable tax credits lead to negative income taxes for households with low income. Updated estimates from the Tax Policy Center project that effective federal tax rates this year will range from 3.5 percent for households in the lowest-income quintile (or fifth) to 33.0 percent for those in the top 1 percent.

The History of Money: Not What You Think The Minskys

CCH Daily, 19/8/16. HMRC plans to use the introduction of the Making Tax Digital (MTD) online strategy to move to a points-based penalty regime for failure to submit tax information on time, using a graduated model similar to the ‘speeding points’ system used for drivers who break the law, and is also potentially seeking wider investigative powers 

Keith Fogg, The First Reconsideration of a Case Due to Former Judge Kroupa’s Tax Problems (Procedurally Taxing):
Former Tax Court Judge Kroupa resigned from the Tax Court on June 16, 2014, apparently in response to an IRS criminal investigation concerning the tax liabilities of herself and her husband.  We previously reported on her resignationhere.  At the time the indictment came out, some speculation occurred in the tax press about the impact of her tax troubles on the decisions she rendered, see here.  In Eaton Corporation v. Commissioner the first case that we are aware of involving the fallout of Judge Kroupa’s indictment comes before the Tax Court for it to review whether her decision should be reconsidered. 

World losing $2.6trn annually to corruption
The Real Russian Mole Inside NSA.
The recent appearance on the Internet of top secret hacking tools from the National Security Agency has shined yet another unwanted spotlight on that hard-luck agency, which has been reeling for three years from Edward Snowden’s defection to Moscow after stealing more than a million classified documents from NSA. As I explained, this latest debacle was not a “hack”—rather, it’s a clear sign that the agency has a mole.

HMRC takes aim at tax dodgers hiding foreign income

ABA Perspectives: A Magazine For and About Women Lawyers, Vol. 24, No. 4, Summer 2016, at 8:
In September, [Lewis & Clark Dean Jennifer] Johnson will host the first Gathering of Women Law School Deans, a day-long event to facilitate conversations on topics of mutual interest. The challenges are especially acute now as the world of legal education undergoes a seismic shift. ...

Tuesday, August 30, 2016

Obit of Sir Anthony Jay, co-creator of Yes Minister

This is from the Telegraph Obit of Sir Anthony Jay, co-creator of Yes Minister:
“However, not many, perhaps, were aware that the serial was commissioned with a serious political purpose: to popularise public choice theory. It is because it succeeded spectacularly that Jay received a knighthood in 1988.”
There are numerous interesting points in the obituary, for instance:
In Zimbabwe, Robert Mugabe was said to be a No 1 fan.
Enclosed is Tyler Cowen's  earlier Conversation with Margalit Fox, senior obituary writer for The New York Times

Max Ritvo, Poet Who Chronicled His Cancer Fight, Dies at 25 

Spectre of Existentialism invaded 256 cafe at noon as former legal eagle and hard access guru took dorrigo boy and me to centrsl Europe Nerumberg trials, privilege matters during Gestapo interogations book like the Witness to Nerumberg and zchurch of Spies ...

Denmark will spend more than $1 billion to upgrade its tax inspection system, 10 years after it began sacking thousands of people who worked for the inspection office.
In the past three years alone, Denmark figures it has lost 12.3 billion Danish crowns ($1.87 billion) in tax fraud. Hence the decision announced on Friday to start hiring people instead of firing them
Denmark will spend more than $1 billion to upgrade its tax

Billions in Losses Trigger Danish Overhaul of Taxation Model Billions in Losses Trigger Danish Overhaul of Taxation Model 

The Church Of Big Data – A Quack Religion?
“Just as divine authority was legitimised by religious mythologies, and human authority was legitimised by humanist ideologies, so high-tech gurus and Silicon Valley prophets are creating a new universal narrative that legitimises the authority of algorithms and Big Data. This novel creed may be called “Dataism”. In its extreme form, proponents of the Dataist worldview perceive the entire universe as a flow of data, see organisms as little more than biochemical algorithms and believe that humanity’s cosmic vocation is to create an all-encompassing data-processing system — and then merge into it.”

A piece by Yuval Noah Harariin the Financial Times this weekend delves into our fascination with Big Data. The tech industry has made so many billions of dollars being able to track, quantify and more

Meet Sasha aka Alex- one of the hardest working public servants  

Sociology vs. economics

"Small change, big impact - lessons learnt from changing the hub"
This blog post describes a recent change we made to the order of questions in the hub, how we made an unexpected 10% improvement and, most important of all, what we learnt... Small is beautiful

The FOI act does not afford sufficient protection to public servants

"Using a false Social Security number is a crime -- but is it a crime 'of moral turpitude'?" Eugene Volokh has this post at "The Volokh Conspiracy."

Operation Ghoul: The Dangerous Myth of Authenticity

Criminally Yours: How do you judge who's an idiot ...

Toppest (sic) Secret: What to do if google guys and gals neglect to index your MEdia Dragon website

Least low secret?: chinese hackers behind defence Austrade security breaches 

Cyber security incidents increasing

The nation's top spy agencies warn that the number of cyber security threats facing Australia is growing by the day

At a Glance: The Australian Broadcasting Corporation’s Four Corners' Cyber War program, aired tonight, highlighted  (thousand of computer log-ins of Australians for sale on the dark net)  the personal, commercial and national threats posed by hackers and a general preparedness on all things cyber security. Are things really as bad as the ABC Four Corners cyber war documentary makes out - Conversations, Yammer are peppered with smart NASA scientist to shed light on the topic ...

Greed Report: Tax hack—how to protect yourself from a crime that won’t go away via  Law enforcement officials knew him only as "The Hacker" — a mysterious person (or was it more than one?) who was stealing millions of dollars in IRS tax refunds, then vanishing like the wind — along with the money — after threatening death to anyone who crossed him. Greed Report: Tax Hack

Hacking the hackers: everything you need to know about Shadow Brokers' attack on the NSA

Government Hackers Caught Using Unprecedented iPhone Spy Tool

C.B. George: “It is a mindset that can mock a rapper who fabricates a criminal background and idolize the authenticity of a convicted felon. Seriously? Me, if I must choose between someone who pretends to have shot people and someone who’s shot people, I go for the fantasist every time. It is a mindset that holds dear an essentialist view of “indigenous culture” even as it disdains the same essentialism in the nationalist intolerance currently blighting the US and much of Europe.” The Dangerous Myth of Authenticity 

ICAC Findings liberal party slush fund eight by five handed down

“Lochte’s story shows one good reason why we should not uncritically believe people who claim to be crime survivors.” [Andrew Fleishman, Fault Lines]
Accenture buying spree continues with Redcore MEdia Dragon cybersecurity acquisition

Thousands of Soros docs released by alleged Russian-backed hackers

The Two Tales of Russia Hacking NYT Marcy Wheeler

Hillary’s Secret Kremlin Connection Is Quickly Unraveling

Ramen is displacing tobacco as most popular US prison currency, study finds Guardian

“[Blockchain] raises questions, and possibilities, over a fundamental market structure principle: who can have access to central bank money and how.” 
Suits join the hoodies with blockchain push, the FT informed us on Tuesday, adding, on Wednesday, in case we missed it, pretty much the same article again: “Big banks push forward with blockchain technology“... Big Banks Blockchain - Boondoggle

DHS doubles down on rubbery myGov numbers only a minister could love. Once a spark of innovation, then a white elephant, the online service portal is at last showing signs of user-focused renewal
10 million myGov users? Nay, Australia exaggerates its digital take-up 
We can now trace where bitcoin transactions end up, so there is hope, because bitcoin transactions are not as much of a black hole for law enforcement as they used to be... ~Turning the tide - Troels Oerting, group chief security and information security officer, Barclays
Cyber criminals are always likely to be better resourced than law enforcement. Now, national and regional police forces in Europe are switching tactics to even the odds.
Fighting fire with fire: European law enforcement seeking smart ways to fight cyber crime 

Antipodean Data breach alerts legislation to hit Parliament

Researchers say they have uncovered an industrial hacking scheme that struck 130 organizations in 30 countries. Kaspersky Lab, which discovered the scheme, is calling the group “Operation Ghoul.” According to the security services provider, Operation Ghoul targets bank accounts and intellectual property from primarily small to medium-sized industrial businesses. The attackers, Kaspersky said, use largely an off-the-shelf, commercial malware program known as Hawkeye that is capable of recording keystrokes, monitoring browser and email data, and stealing FTP server credentials. Kaspersky noted that more than a quarter of the infected organizations were from Spain and Pakistan. Companies in those countries — along with India, Egypt, and the United Arab Emirates — accounted for more than half of those affected. Kaspersky

The federal government has started a three-month public consultation on updating its cyber security strategy, asking security pros and citizens for input on how it should not only strengthen the national IT systems and critical infrastructure in the private sector but also help businesses and residents. Public Services Minister Ralph Goodale said Tuesday the consultation, which ends Oct. 15, will help identify gaps and opportunities, bring forward new ideas to shape Canada’s renewed approach to cyber security and capitalize on the advantages of new technology and the digital economy. “We need to get really good at cyber security – across our personal, business, infrastructure and government sectors – so we can take full advantage of the digital economy, while protecting the safety and security of Canadians, and selling our valuable cyber skills and products into a booming market throughout the rest of the world.” 

“We’ve found that Yammer facilitates spontaneous conversations among employees—sparking innovative ideas that help us operate more efficiently and improve customer service.”
—Adrian Steel, Global head of IT operations International Airlines Group
  Schmoozy Yammer Not Yet ...

Australian authorities hacked Tor users in the US as part of a child pornography investigation, Motherboard has learned. The contours of this previously-unreported hacking operation have come to light through recently-filed US court documents. The case highlights how law enforcement around the world are increasingly pursuing targets overseas using hacking tools, raising legal questions around agencies’ reach. In one case, Australian authorities remotely hacked a computer in Michigan to obtain the suspect’s IP address. “I think that's problematic, because they've got no jurisdiction,” Greg Barns, an Australian barrister who practices criminal and human rights law who's also a former national president of the Australian Lawyers Alliance, told Motherboard in a phone call.

The cybersecurity business runs on fear, so it is appropriate that investors have learned to be afraid. While hacking seems like a long-term growth industry, security hasn’t turned out to be the surefire bet many thought it was. It has underperformed many other tech segments since hitting a peak last summer. 

Identity theft wasn’t supposed to be part of writing checks to the Democratic National Committee. The massive data breach that drove the DNC’s chairwoman out the door has now swept up the party’s biggest donors too, their Social Security numbers and personal information compromised by hackers and forcing fundraisers to spend money to protect themselves. “All my shit was hacked,” said a major donor, who has given to the Democrats for years. “Now, I’ve got to have LifeLock on my 6-year-old daughter’s Social Security number.”  

Sage, which provides accounting, payroll and payments software for businesses, has released a statement saying that an internal login had been used to gain unauthorised access to the data of some of its British customers. The personal details of the employees of about 280 British companies were potentially exposed in the breach, a company source said. “We are investigating unauthorised access to customer information using an internal login,” the company said in a statement.  

The chain that owns Starwood, Marriott, Hyatt, and Intercontinental hotels—HEI Hotels & Resorts—said this weekend that the payment systems for 20 of its locations had been infected with malware that may have been able to steal tens of thousands of credit card numbers and corresponding customer names, expiration dates, and verification codes.

The Social Security Administration is relaxing a recent security directive requiring beneficiaries to use two-factor authentication to log into personal accounts after complaints that the new restrictions hindered user access. The agency had established a policy of requiring My Social Security account holders to confirm their identities via a text-enabled mobile device. The move was in keeping with an executive order on improving security in consumer financial transactions. The policy, announced July 30, met with complaints from users

The Commerce, Energy and Justice departments received generally positive cybersecurity assessments from their respective inspectors general offices. The Cybersecurity Act of 2015 requires department OIG to submit to Congress reviews of internal cyber practices, including the "logical access" policies under which some users are granted or denied permission to view certain information.  

When an anonymous group calling itself Shadow Brokers put up for auction a collection of data it said it stole from the NSA, the group wrote that it would make the information public if it received the truly absurd “Dr. Evil” sum of one million bitcoins—at current exchange rates, about $576 million. So far, however, it’s achieved a more modest payday: $937.15. Over twenty-four hours have passed since the Shadow Brokers publicized its auction of a collection of encrypted information it claimed to have obtained from hacking the Equation Group, an elite team of hackers linked last year to the NSA.  

Inside Facebook’s (Totally Insane, Unintentionally Gigantic, Hyperpartisan) Political-Media Machine How a strange new class of media outlet has arisen to take over our news feeds Inside Facebook’s (Totally Insane, Unintentionally Gigantic, Hyperpartisan) Political-Media Machine 

...Must all directors make a Cold War River  movie before being considered truly epic?

… Clive James on The way we weren’t: what “Mad Men” got wrong | Prospect Magazine

“I don’t blame the poor people at the ABS, I blame successive governments which have denied investment in the ABS, and also in this case the foolishness of outsourcing so much of the collection task to the private sector without equipping the ABS to be as strong and informed a client of those companies as it needed to be in a very complex area like IT.
Is the Australian Public Service competent? Lessons from #CensusFail Antipodean data breach alerts bill to hit parliament