From: tcmay@netcom.com (Timothy C. May)
Date: Tue, 19 Jul 94 10:25:12 PDT
To: stanton@acm.org
Subject: Re: Leaving the Country
In-Reply-To: <9407191352.AA07329@sten.lehman.com>
Message-ID: <199407191724.KAA20132@netcom4.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain


(If you are not interested in the topic of money laundering, using
crypto to avoid taxes, etc., hit "DELETE" now. Better this than
sending me messages telling me that the "purpose" of Cypherpunks is
discussing the latest versions of PGP 2.6ui and the like.)

Linn Stanton hit the nail on the head:

> Sandy Sandfort <sandfort@crl.com> writes:
>   > >From what Tim alludes to, I still think he is just plain wrong about how 
>   > bad things would be on him.  He's probably getting bad advice from 
>   > practicing lawyers who have a vested interest in having financial privacy 
>   > "difficult" to obtain.  (More billible hours, more fees.)  For the rest 
>   > of us who aren't retired zillionaires, though, there is plenty that can 
>   > be done.
> 
> The real problem that I see is getting legal assets out of the control and
> monitoring of the US/IRS. Especially without taking a bath in the process.
> 
> It is much easier to launder illegal assets than legal ones, and any method
> would need to handle NYSE securities to be useful.

Precisely! For those of us whose assets are already "visible," in the
form of real estate or stock or the like, the prescripions of some on
this list to "ignore them and they'll be powerless" (a paraphrase of
this scofflaw approach) is not at all persuasive.

Having been invited in to "chat" with my regional IRS officials in San
Jose on a couple of occasions, and seeing my stock broker's wonderful
computerized statements being forwarded to these same folks, I don't
hold out much hope for escaping.

Now I suppose some might say this is my fault, for not having acquired
the assets in a foreign tax haven like the Cayman Islands, or not
having lived my life by leasing my cars, only renting houses, etc.
These were not options. 

While it is certainly true than I can easily hide modest amounts of
assets, hiding large amounts is usually a one-way street. That is, the
legal and jurisdictional repercussions have to be very carefully
considered, as they can't be reversed once taken.

Maybe they exist. I'm sure some people have hidden assets from the tax
collector and still lived in the U.S. or other high tax rate states.

But I'm not at all convinced by arguments that because some people
have piled up unpaid traffic tickets, or have no assets to seize, and
are hence "judgement proof," that this helps me or anyone else in my
position (a bunch of my Silicon Valley friends, concretely enough).

I'm sure the judgement-proofing Duncan Frissell talks about has worked
for him, in his situation, but I've seen no convincing way to get from
"here" to "there" in a way that I am remotely comfortable with. And
I'd suggest that if Duncan really knows a way to do this--one that
takes into account people's _current situations_, as opposed to
suggesting that they should have chosen a different path in the
past--then he should have no problem earning a million dollars a year
as a tax consultant.

Not having had the pleasure of meeting Duncan, I can't judge whether
he's now earning rates like this. (If so, congratulations--and give me a
call and I'll hire you. If not, why not?)


--Tim May


-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^859433 | Public Key: PGP and MailSafe available.
"National borders are just speed bumps on the information superhighway."