The IRS is at it again going after famous people to make big publicity splashes about their criminal prosecutions. This time, it involves 69-year-old H. Ty Warner, the inventor of Beanie Babies the craze of the 90s, for having Swiss bank accounts. The Department of Justice and IRS love to attack popular and well-known people in order to demonstrate that the government uses force against people who are “tax evaders”.
I am not arguing that Mr. Warner did not violate US tax law, but the Government once again is using the prosecution of a famous person such as Mr. Warner (previously Lauryn Hill, Wesley Snipes, Leona Helsley, etc) to show that it will use the full force of the government to collect taxes.
The really sad part of this is that if Mr. Warner were a citizen of almost any other country, earning income in a foreign country would not be considered taxable. The US is one of only 2 countries that taxes of foreign earnings of its citizens. None of the news articles and commentary mentioned this very important fact. I am sure there are celebrations at the Department of Justice and the IRS about the great publicity and “deterrent effect” that they are getting with this prosecution. But no one is thinking about the real ultimate deterrent, that of encouraging businesses and successful business owners to stay away from the US, give up their citizenship, or form entities in any other country for tax and business reasons.
This is very said!
See article here.