From: Black Unicorn <unicorn@schloss.li>
Date: Mon, 7 Oct 1996 20:45:57 +0800
To: "Timothy C. May" <tcmay@got.net>
Subject: Re: Put up or shut up!
In-Reply-To: <v03007806ae7e5a192957@[207.167.93.63]>
Message-ID: <Pine.SUN.3.94.961007052149.17782Q-100000@polaris>
MIME-Version: 1.0
Content-Type: text/plain


On Sun, 6 Oct 1996, Timothy C. May wrote:

> At 1:40 AM -0400 10/7/96, Black Unicorn wrote:
> 
> >Interesting that if the transition to crypto anarchy includes any phase
> >of conflict between the state and the individual, failing to properly
> >protect those assets may result in their seizure anyhow.  If they are
> >attachable now, as you seem to suggest, then they are attachable then.
> >
> >I know that Mr. May has, in past, been a asset protection "naysayer," but
> >this falls into a general, and disturbing, pattern.
> 
> Please call me "Tim," not the stuffy, formal, "Mr. May."
> 
> It is not that I am a naysayer, it is that the proposals I have read about
> or seen discussed here have not been convincing to me, in my particular
> situation. I've even done some on-site research in the Bahamas and Monaco,
> and neither seemed a good solution. (And a friend of mine travelled to
> several other Caribbean islands, plus the Channel Islands, Guernsey, etc.
> He had several schemes he was working on, but the laws in some of his best
> prospects changed and his plans fell through.)

I've never been fond of some of these for a myrid of reasons.

> My primary concern is *tax avoidance* (I emphasize "avoidance" over
> "evasion"), not the "judgement-proofing" or "insurance settlement-proofing"
> most of the published books emphasize. (This is where someone will say,
> "Ah, but that's because they're the _published_ books, the ones available
> to Joe Doe in Barnes and Noble. The _real_ stuff is contained in
> self-published books, the kind the media conglomerates won't touch. Send
> $295 for this informative pamphlet....")

Someone will indeed say that.  I am not that someone.  The lack of tax
avoidance materials directed towards U.S. interests is mostly because
there are very few offshore tax avoidance options open any longer to U.S.
citizens.  Most have been very effectively legislated away.

> It turns out that I would save nothing in taxes by moving some of my liquid
> assets to some particular coral atoll. (Unless I lie on my 1040, which is
> always an option.)

An unsurprising result.
 
> If Black Unicorn would do things differently with my money, fine. But I
> have seen nothing that is very convincing to me.

If tax avoidance is your major concern, there is not a whole lot more I
would do.  I may have some suggestions, but taxation is not really the
kind of thing I could do you any good with.  Whatever I did suggest would
be more fine tuning than anything else.

Unless you are engaged in major international business, there are few
taxation breaks for U.S. citizens.  I believe I've discussed this before.

But the concern I raised was not tax avoidance, for which offshore
solutions provide little help to the average U.S. citizen, but asset
protection.  Political Risk protection.

> And I've seen a lot of "creative" ideas that just don't fit my situation.
> The "perpetual tourist" notion, pushed by Duncan and others, doesn't fit my
> notion of living in one place. Nor do I want to bounce around Europe for
> years and years. (A great place to visit, but....) Nor am I much interested
> in protecting an asset as comparatively trivial as my vehicle by setting up
> a Nevada corporation which then leases me back the vehicle as part of my
> Amway distributorship, blah blah. Too much paperwork and "IRS alerts" for
> too little gain. And so on.

I wont presume to analyze your financial holdings, but it sounds like a
substantial amount is in stock.  That's vulnerable to all manner of
nasties.

I don't know your situation exactly, but it is my view that in general,
and in my personal experince, holding large amounts of U.S. stock solely
in your own name is a bad idea.  I'm not suggesting that these assets be
hidden from tax authorities, but involving the laws and stability of
another goverment in the ownership determination is a nice thing to do.
If an individual makes accurate disclosures on his or her tax returns is
not something I'm going to get into.  I'm simply talking about structuring
the assets in such a way that attacks on you personally won't necessarly
impoverish you as well as anything else.

> >I'll wager, though I have no data to back it up, that most of the people
> >in this forum who are uncertain about the safety of their assets don't
> >bother to engage in the most basic of asset preservation tactics, namely:
> >geographic diversification.
> >
> >Surprising considering the perfectly legal options which would protect
> >many of them.
> 
> Well, I get pretty tired of these vague claims that float out, with no
> particulars ever presented. (I know, I know, if I want particulars I should
> hire you...sorry, not in my plans.)

I'm not for hire.  I'd be happy to suggest, in person, some financial
institutions in which I have no interests which you may wish to
investigate, none of which are less than 100 years old.

I can tell you some of the things that might be suggested to you.  A
banker might suggest estlablishing a foreign trust, in one of many
different forms, and reinvesting the funds in the U.S. market as you wish.
It will be suggested to you that you make all the proper disclosure to the
tax authorities of the United States, but also explained to you that
outright seizures of the funds will be resisted with vigor.  Records
will be outside of the United States with the exception of your tax
filings which are of little use to someone trying to outright seize
assets abroad.  Much better than you can expect in the United States
without doubt.  You think Citibank is going to fight in court to withhold
your records?

It might be suggested, if you have more active interests, that a
corporation be formed, that the assets be placed under management in that
form and left more convertable.

The point is that you involve another jurisdiciton in confiscation
proceedings.  This is not a matter of getting rich quick, or filling out
this "declaration of personal sovereignty" form.  It's not about tax
evasion either.

This is only one aspect of asset protection.  If you don't trust the U.S.
government to give you a fair shake, or if you feel you might eventually
be the victim of a suspicious persecution, or if you are wary of the
political winds in the United States, I would think you would run, not
walk, to deposit some money abroad.  Thousands of Europeans saved
themselves, their families and their fortunes by being a bit skeptical
about keeping their money in one country in the 30's and 40's.  This was
the original and completely legitimate reason that Switzerland and
Liechtenstein became known for banking secrecy.  They were equally
friendly to Nazi's who hid wealth before during and after the war I
might add.  This is, in my view, as it should be.  Financial
institutions should not be interested in the politics of their
clients.  That nosiness is the path to more intrusive invasions and
any financial institution which exhibits these trends should be
avoided at all costs in my view.  Most of the Islands came to popularity
during the 70's and the 80's tax evasion and drug money crazes.  Their
reliability is to be considered in this context.

I'm not selling my services here.  I have enough to worry about without
the cypherpunks rushing to retain me to manage their money.  (As much of a
fan of pseudonymity as I am, I will tell you not to give money to a nym
for asset protection reasons unless you are that nym and I'm not about
to expose myself to someone on the list because they claim to have
$25,000 to invest).

There are no U.S. banks which will do this kind of thing because banking
secrecy and questioning the legitimacy of asset seizure proceedings is
something viewed with suspicion in the United States.  This is not so
everywhere in the world.  It is not illegal, last I checked, to give
a foreign bank the privilege of managing your money.

The day it becomes so is the day it becomes apparent that the United
States expects eventually to have to wrech that money from you by force.
It will also be the day it is too late.

Look, I don't know if there is a revolution around the corner which will
make numbers in the Citibank computer disappear or something, but I sleep
better knowing that my money is not at the mercy of the political tide in
any one country.

> (Not directed at Black Unicorn, but at others: Please, let's not start a
> thread about how stupid Tim is with his money, about how all true goldbugs
> know how to convert their assets into 17 Kruggerands which they they bury
> in the backyard, about how foolish Tim is to ignore all the helpful free
> advice from fabulously successful fellow list members who have figured out
> how to avoid taxes, protect assets, and live the carefree life of the
> Perpetual Tourist! If your plan works for you, that ought to be
> enough--yoiu don't have to sell me on it. And please, no more advice about
> selling short against the box.)

Thanks for ommiting me.  :)

Seriously, there are much better banking and management services to be had
than exist in the United States.

I was talking to another list member about the differences.  I don't
recall who it was, but he might wish to chime in on the subject.

I'll suggest some places to look to anyone who enquires seriously.
Currently I don't do direct referrals, and I don't sell the financial
services of institutions in which I have an interest.  In the rarest of
cases I would consider writing, free of charge, letters of introduction
to european institutions for extremely serious and credible investors but
I make no promises at all.

This is not legal advice.  You didn't pay for it.  Do your homework 
whatever it is anyone tells you.

> 
> --Tim May
> 

--
I hate lightning - finger for public key - Vote Monarchist
unicorn@schloss.li