Last Chance for Tax Cheats Act (Law'd)

[Southern Senator North Carolina Yankee]

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Sponsor: Badger

[Purple State]

I'll get to an analysis of this sometime in the next few days.

[Badger]

This was modeled after several RL tax amnesties. It offers a carrot in allowing tax cheats to come in out of the cold and pay the taxes they've dodged, plus interest, and thereby avoid going to prison and/or getting hit with administrative penalties that could result in losing everything. It also provides a stick by dramatically increasing said administrative penalties plus funding for enforcement of tax laws.

Simply put, every dollar collected in unpaid taxes is one dollar less that has to be raised on honest taxpayers, or cut from government services, or incurred on the national debt. A similar plan was passed recently in the Mideast which is projected to have strong revenue gains.

While we're waiting on PS's analysis, anyone have objections or concerns over this plan?

[Southern Senator North Carolina Yankee]

Waiting on the Game Moderator.

[Purple State]

Waiting on the Game Moderator.

It's posted in the actual GM thread as of a day ago. Sorry I didn't announce that one. Figured I would see if any senators actually check that anymore.

Well that was disheartening.

[Southern Senator North Carolina Yankee]

Waiting on the Game Moderator.

It's posted in the actual GM thread as of a day ago. Sorry I didn't announce that one. Figured I would see if any senators actually check that anymore.

Well that was disheartening.

Sorry, I haven't been able to check all the threads I want to.

Anyway an active GM is so passe'.

[Southern Senator North Carolina Yankee]

National News

From the GM’s Desk: Legislation Analysis
Last Chance For Tax Cheats Bill: The Office of the GM predicts that this tax amnesty program can bring in between $4 billion and $15 billion by cracking down on offshore and delinquent tax cheats. A conservative estimate predicts that more than 2,500 Atlasian taxpayers with offshore accounts in foreign countries will come forward to settle their tax debts under this plan, though estimates range to five times that number. The outcome relies heavily on the mix of penalties and incentives in the final legislation.

While the current text of the bill provides that "no additional ARS administrative penalties nor other criminal liability shall attach for nonpayment or avoidance of said taxes," one option to increase revenue would be to levy a "foreign bank account reserve" penalty of between 10% and 20% of the highest account balance in the past five years. Special circumstances may require different FBAR rates than the norm, such as in the case of inherited accounts or other accounts that the taxpayer did not cause to be opened.

As part of the incentives for disclosing assets in tax havens, resources could be devoted to investigating holders of offshore accounts to place pressure on those who believe that their assets are safe from taxes. International law provides avenues to file such investigations into global banks and it may be necessary to pursue such avenues to "flush out" many tax cheats.

Finally, it is recommended that the legislation ensure that taxpayers fully cooperate with the ARS in any civil or criminal investigation in order to take advantage of these terms. Taxpayers should expect detailed questions from the ARS regarding how they came to open their offshore bank accounts, and must be required to name names. This program's success relies on the ability of the ARS to use this information to open tax audits of taxpayers who do not come forward.

[Southern Senator North Carolina Yankee]

I will graciously give Senators 48 hours to review this if they haven't already then its voting time.

[Badger]

This is really good analysis, PS. Your hard work is greatly appreciated as always.

I'm 101% in support of cracking down on international tax havens, and will likely introduce legislation addressing this issue in the future. As it stands, though, I'm not sure about the value of incorporating some of these suggestions into this particular bill.

The additional foreign bank account reserve penalty ("fbarp") is counterproductive to the very goal of a tax amnesty. That is tax cheats have an incentive to fess up to avoid the threat of jail or huge fines by paying dodged taxes; the government receives the income it would've otherwise received plus interest without the costs of investigation and prosecution.

Simply put, some people coming forward under a tax amnesty would have eventually been discovered by investigation or happenstance, but many would not because law enforcement isn't perfect. Adding this additional steep penalties will deter many tax cheats from coming forward, deciding the additional 10-20% penalty shifts the balance back towards continuing to try dodging the tax man. Again, some will eventually be caught, but many will not. The ultimate losers being the honest taxpayers when the revenue recovered from the amnesty is decreased--probably substantially.

Besides, there's no reason to penalize concealed income differently depending on whether it was stored in a Cayman Islands offshore account or under the mattress at home. Again, I'm ALL for cracking down on offshore tax dodges, but that should be the subject of another bill rather than undermining the revenue collected in an amnesty.

Regarding the last part about cooperating witnesses, while I agree 100% in theory, in practice this bill involves situations where the repentant tax cheat has no pending criminal, civil or administrative proceedings pending. It may even be redundant for prosecution of third parties like crooked accountants and lawyers who helped set up such tax havens. The tax records the cheat provided as part of amnesty alone would be invaluable to investigators and prosecutors, and the cheat could no longer plead the fifth when subpoenaed as a witness against those third parties as the amnesty would shield them from further criminal or civil liability.

I suppose the cheat could still refuse to talk to investigators trying to fill in the gaps of tax records to prosecute the lawyers and accountants. Even without 5th Amendment protections the cheat could still refuse to cooperate with revenue agents and the like unless subpoenaed as a grand jury witness (and bringing charges to a grand jury is incumbent upon investigators finding sufficient evidence in the first place).

So perhaps an amendment could be included to require the tax cheat to fully cooperate with investigations of third parties related to tax evasion for which the cheat was given amnesty. I could include provisions stating nothing in the bill shall be construed to deny the cheat's 5th Amendment rights, and leaving the period for such cooperation to last the longer of one year after entering the amnesty agreement or until all back taxes and interest are repaid in full.

How's that sound?

[Purple State]

The bill as it stands now is still doing a pretty good job. I just figured I would provide more information on ways to expand the program or ideas for future legislation.

Much of that analysis actually plays off a similar program the US had which drew in far more than was expected.

Either way, I think the legislation is good, as were its predecessors in the Mideast and Southeast regions.

[Badger]

The bill as it stands now is still doing a pretty good job. I just figured I would provide more information on ways to expand the program or ideas for future legislation.

Much of that analysis actually plays off a similar program the US had which drew in far more than was expected.

Either way, I think the legislation is good, as were its predecessors in the Mideast and Southeast regions.

Thanks. I actually copied modeled this off the bill I wrote in the Mideast Assembly.

Since you approve of the bill as is, Mr. GM, I'll likely leave it as is unless there is a great hue and cry for amendments, and leave additional crackdowns on offshore tax havens for another bill (though beefing up the ARS enforcement staff should be a strong start).

[Southern Senator North Carolina Yankee]

Are we approaching Final vote here?

[Badger]

Are we approaching Final vote here?

Unless there are any (long-overdue) objections or amendments, I say yes.

[Southern Senator North Carolina Yankee]

A final vote is now open on the above bill, Senators vote AYE, NAY, or ABSTAIN.

[tmthforu94]

Aye

[Badger]

AYE.

[Fritz]

Aye

[k-onmmunist]

Aye

[Southern Senator North Carolina Yankee]

Aye

[Hans-im-Glück]

AYE

[Southern Senator North Carolina Yankee]

Senators voting in affirmative (6): Badger, Fritz, Hans-im-Gluck, North Carolina Yankee, Tmthforu94, and Winston Disraeli

Senators not voting (3): Duke, MaxQue, and Mint


With no Senators voting in the negative, the bill is passed, the 24 hour waiting period is waived, and the bill is presented to the President for his signature.

[Southern Senator North Carolina Yankee]

Lameduck Leafy Green hack, please do us a big favor in your last hours and take care of these unresolved matters. (attention getter)

[Lief 🗽]

I have a week to sign bills, jeez. Calm down bro.

X Lief