Tag Archives: wsjexchange

These technologies could hold back business travel indefinitely | Instant News

It’s a sunny, windy morning in Eugene, Ore., A place best known for its access to the great outdoors, its history of environmental activism, and Nike’s birthplace. I stand outside an indescribable one-story industrial space, speaking with Mark Frohnmayer, Managing Director of Arcimoto, maker of a three-wheeled electric vehicle he calls a “fun utility vehicle.” Only, I’m not in Oregon. I’m still stuck at home on the opposite coast, relying – like many of us – on an ever-expanding array of tools that allow me to do my work remotely. In this case, I’m doing a tour of the Arcimoto factory via FaceTime. Mr. Frohnmayer carries me to an iPhone, shows me things, brings me closer to half-finished machines, parts and vehicles, and answers my questions. To me, this turns out to be a reasonable facsimile of my presence. Minus the eight hour flight and stay at a discounted Dow Jones approved hotel with continental breakfast, ie. This is how Mr. Frohnmayer and his team have been organizing factory visits to investors, customers and suppliers since the start of the pandemic. It works well enough that Mr Frohnmayer wanted to continue doing it after the pandemic is over, as it does not result in any loss of productivity due to days of travel. Through cloud-based collaborative tools of all descriptions – not just Zoom – the pandemic has led to a reset of office culture, from person to person to remote or hybrid. Surprisingly, there was also a reset for workers hardly anyone thought they could do their jobs from remotely, including field service engineers and emergency medical personnel. While these changes explain trends within the post-pandemic workplace, they also point to a new path forward for business-to-business relationships. Many examples come from the most practical industry of all: manufacturing. Workers still have to go to a factory and assemble products, and quality control may require trips abroad from time to time, but many other activities – including investment due diligence, relationship building with suppliers and customers, and even research and development – have unexpectedly and perhaps permanently disappeared. .

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IRS Reels in a Whale of a Offshore Tax Cheat – and Goes for the Another | Instant News

US tax officials have thrown a historic one-two punch at wealthy Americans hiding money overseas.

On October 15, they announced that Robert Smith, 57 years of age private equity billionaire who founded Vista Equity Partners, admits he criminally evaded taxes on income of more than $ 200 million from 2000 to 2015 by using secret foreign accounts in the Caribbean and Switzerland.

Mr. Smith, best known for announcing at Morehouse College graduation that he would do it pay off student loans for 2019 class, will pay $ 139 million to the Internal Revenue Service in taxes and fines. He would also ignore claims for a $ 182 million deduction for charitable donations, which could add more than $ 65 million to his debt to the IRS. But he will not be prosecuted.

Software executive Robert Brockman pleaded not guilty to charges of hiding about $ 2 billion in capital-gains income from the IRS in secret offshore accounts.


Dave Rossman / Associated Press

At the same time, files US officials were chargedRobert Brockman, a Houston-based billionaire and CEO of software who was the sole investor in Mr.’s first private equity fund. Smith, by hiding an estimated $ 2 billion in capital gains from the IRS in a secret account abroad from 2000 to 2018. Mr. Brockman, 79, pleaded not guilty and was released on $ 1 million bail.

Both cases are key events in the US crackdown on undeclared offshore accounts that has been ongoing since 2009. Brockman’s $ 2 billion tax evasion charge is the largest criminal tax lawsuit ever filed, according to the Department of Justice, and Mr. Smith’s $ 139 million payment was among the largest made in connection with a secret offshore account.

“This extraordinary case demonstrates the reach of the IRS and the Department of Justice in tracing hidden assets around the world. Rich people have to clean up their houses before the IRS arrives, ”said Caroline Ciraolo, a prominent former criminal tax attorney at the Justice Department who now works at Kostelanetz & Fink.

The public documents in the Smith and Brockman case offer a new window into the dark world of wealthy American tax evaders. They reveal both the amount of money involved and how long people will try to hide it – even when tax rates are relatively low.

Here’s how it works, with a focus on Mr. Smith because the facts are not disputed. A spokesman for Mr Smith and Vista Equity Partners declined to comment on the case. Mr. Brockman’s attorney did not respond to requests for comment.

Is there a difference between tax avoidance and planning to minimize taxes?

Yes, the big one. Tax avoidance can be legal, but tax avoidance is a crime of deliberately not paying taxes, and it must be clearly intentional. For example, Mr. six page confession. Smith uses the word “on purpose” 25 times to describe his mistake.

How do offshore accounts allow tax evasion?

Confidentiality is the key. It often starts when an American puts assets into foreign trusts, companies, and other offshore accounts nominally owned by foreigners to make it appear like no taxes are owed to the IRS. In fact, these assets are controlled by America.

This offshore structure is difficult for the IRS to investigate if it is in a country without treaties or treaties that facilitate the exchange of tax information.

Mr. Smith admits that he controls entities in Belize and the Caribbean island of Nevis that are not in his name. The entity receives pre-tax benefits from its personal equity funds. He also controls undeclared bank accounts in the British Virgin Islands and Switzerland, and he withdraws millions of untaxed dollars from them to buy and upgrade luxury real estate in Sonoma, California and Switzerland.

Robert Smith, founder of Vista Equity Partners, admits that he criminally evaded income tax of more than $ 200 million between 2000 and 2015 by using secret foreign accounts in the Caribbean and Switzerland.


Simon Dawson / Bloomberg News

How do tax evaders keep offshore accounts secret from the IRS?

They often employ intermediaries, and they often use encrypted communications and codenames to cover their tracks.

For example, Mr. Smith said he paid an unnamed Houston lawyer who was Mr. Brockman over $ 800,000 from 2000 to 2014 to set up and maintain a fake paper trail to hide his account.

Is tax avoidance using offshore accounts a new trend?

Not. It has been around for decades, but a continuing US crackdown began in 2009 after the Swiss banking giant


admits it encourages Americans to evade taxes and even send bankers to the US for market evasion schemes.


What do you think would motivate a billionaire to try tax fraud? Join the conversation below.

The crackdown, which had many aspects, allowed the IRS to do so penetrate the veil of bank secrecy in Switzerland and several other countries. As a result, more than 56,000 US taxpayers are at risk of criminal prosecution for undeclared offshore accounts entering the IRS’s limited amnesty program and paying an estimated $ 11 billion to solve their problems. Foreign banks paid more than $ 6 billion.

How does the IRS detect Mr. tax evasion. Smith?

Not clear. However in late 2013 or early 2014, Mr. Swiss bank. Smith informed him that it was ready to pass information about his account to the IRS. Many Swiss banks are doing this to reduce their own penalties arising from the US crackdown.

Mr Smith then applied for the IRS’s limited amnesty program but was rejected in April 2014 – meaning that he was most likely already in the agency’s eyes.

Mr. Smith was a well-known philanthropist, even more so than paying off debts of Morehouse graduates. Are the offshore accounts benefiting a charity?

Mr. Smith’s trust has charitable recipients, but he is not required to make donations. In late 2014, he donated a large amount of offshore assets to Fund II Foundation, a US-approved charity.

While under an IRS investigation, Mr. Smith made waves as a donor. To 2016 and 2019 he was named one of the top 50 US donors by the Chronicle of Philanthropy.

Charitable endeavors, such as Mr. Smith manual creation to help colleges and other donors emulate its Morehouse program, can polish the defendant’s image in the eyes of prosecutors and judges. Neither he nor the government said why he gave up $ 182 million in charitable deductions as part of the settlement.

Robert F. Smith, keynote speaker for the commencement ceremony of Morehouse College, said he will pay off his 2019 college debt, approximately $ 40 million. Photo: Steve Schaefer / Atlanta Journal-Constitution via AP (Originally published May 19, 2019)

Why Mr. Smith wasn’t charged if he evaded $ 200 million in taxes?

David Anderson, US Attorney for the Northern District of California, who handled the case, said Mr. Smith to cooperate with the government – perhaps in Mr Smith’s case. Brockman— “keep him away from prosecution.”

The DOJ procedure does not allow defendants to buy their way out of prosecution, but cooperation can provide a basis for leniency. However, some tax experts consider Mr. Smith is not ordinary.

Jack Townsend, a lawyer who publishes the blog Federal Tax Crimes, said, “He’s got an incredible deal, considering what he did.”

Write to Laura Saunders at [email protected]

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In Furlough From the Kingdom, Disney Workers Try to Maintain Magic Alive | Instant News

Since he was thrown from his job at Walt Disney World, 24-year-old Devon Elizabeth Sofia has a top priority: staying fit when the park reopens.

Quarantined at his parents’ house in St. Louis, he headed to the gym in the backyard to choreograph a dance inspired by some of the 16 roles he played. Fancy Nancy, a ballerina, pirouette on her toe. Timon, meerkat cake making of “The Lion King,” inspires squatting movements – great for quads and glutes – while Vampirina, a six-year-old vampire on the Disney Channel show, …


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