web analytics
September 16, 2014 / 21 Elul, 5774
At a Glance

Posts Tagged ‘taxes’

US Customers Withdraw $4 Billion from Israeli Banks

Tuesday, July 2nd, 2013

Tighter American tax laws have encouraged U.S. citizens to withdraw approximately $2 billion from Israeli banks in less than two years.

“The blow is not just in the drop in assets, but also in the drop in investments. Some of these customers, especially the wealthy ones, use the money to make investments and acquisitions in Israel. There is now little chance that they will make these investments, after they moved the money back to the US,” a banking source told Globes business newspaper.

In some cases, Americans used the money to buy property in Israel, but most of the money was sent overseas.

The Foreign Account Tax Compliance Act (FATCA) at the end of this year will require financial institutions in foreign countries to report bank accounts and assets held for American citizens, who must pay taxes regardless of where they are living. Approximately 100,000  first-generation American citizens live in Israel.

With the absence of a tax advantage by leaving assets in Israel, many Americans began withdrawing their money from local banks

Managed accounts of Americans in Israel are estimated to be valued at billions of shekels.

How to Explain Taxes to Your Kids

Thursday, June 13th, 2013

Benjamin Franklin said, “Nothing is certain except death and taxes,” and just as your children will gradually learn about mortality, they will also find out about taxes and other financial issues.

Like many financial concepts, paying tax may at first be rather difficult to grasp. Indeed, many adults find it hard to accept that the government receives a certain percentage of their hard-earned money before they even see their paycheck. In fact, many question why it’s better to work “on the books” rather than “under the table.”

Paying taxes is a piece of cake.

Try teaching your kids about taxes by relating it to something that they understand and like: cake.

So take them into the kitchen and bake a cake together. Then, explain that this chocolate cake can be compared to the economy. This is the money that belongs to the whole country and everybody needs a slice – the schools, the street cleaners, the hospitals, and the army. Without any “cake,” the government can’t provide any of the things we need.

When you cut a slice for your child, take a small piece off and say that this is like taking a small piece from your wages and giving it back to the country. If no one would part with a small piece of his slice, there would be no cake/money for everybody else. We all use the sanitation services, schools, hospitals, and sidewalks that have to be maintained. As most people wouldn’t simply volunteer to give this money to the government even though they use its services, this tax is levied before you receive your paycheck.

Then ask your children how much of the cake should go back into the government. What if there is a family with a father, mother, and two children? Wouldn’t they need more cake than a single person living alone? And what about a person who gets a huge slice of cake because he has a well-paid job, as opposed to the worker who earns the minimum wage? Would they pay the same amount or would the slice that’s removed be different for each of them?

Once you have used the chocolate cake to illustrate the various ways in which taxes are levied and determined, you and your kids can sit down and enjoy the revenues you have produced. Apart from enjoying a fun time, your kids will learn a very valuable financial lesson…sometimes you can’t have your cake and eat it too.

Political Financial Interference: The IRS Scrutiny of Charities in Judea and Samaria

Wednesday, May 29th, 2013

If you are an American, there is nothing illegal about contributing money, as a donation to a charitable cause, to a project abroad.

But in the eyes of an American administration, funding educational, social welfare, recreational sports or other such projects in Jewish communities in Judea and Samaria is a pain, a political pain and not an illegal pain.

So what do they do?

From the Wall Street Journal:

Why the special scrutiny for pro-Israel groups? A New York Times article in July 2010 provided a clue: Tax-exempt groups were donating to West Bank settlers, and State Department officials wanted the settlers out. “As the American government seeks to end the four-decade Jewish settlement enterprise and foster a Palestinian state in the West Bank,” the Times wrote, “the American Treasury helps sustain the settlements through tax breaks on donations to support them.”

Did the T-men take their political cues from such stories, or did Administration officials give them orders? Either explanation would be a violation of public trust.

This would also suggest a pattern: Washington officials sent a message for tougher scrutiny of certain 501(c) groups, and the IRS coincidentally adjusted its enforcement regime…There’s still much we don’t know about the scandal of politicized tax enforcement.

Will someone sue the government?

Death & Taxes: Welcome to Obamaland

Friday, May 24th, 2013

In this world, nothing can be said to be certain except death and taxes.

We’ve heard this clever aphorism countless times, and nodded our heads in bleak recognition. And yet, have we ever really pondered the ghoulishness that equates taxes with mortality?

Anyone who has ever been audited by the IRS—Seraphic Secret has been twice audited, each time emerging battered but owing the government zero dollars—knows the helpless feeling of being forced to submit to an absolute power, where the normal rules of law and civil society are suspended by an all-powerful government with unlimited resources.

The IRS is a temporal tyranny. Death is the ultimate tyranny. One was created by man, the other by God.

Barack Hussein Obama and the Democrat party are now playing God, by joining death and taxes into one sinister package.

Obamacare is administered by the IRS.

The same lawless agency that has been targeting and oppressing citizens who disagree with the current administration’s policies, is the very agency now tasked with the health—which is to say every breath—of every American.

Indeed, the Obama administration is now setting in motion a system whereby a central government data base will connect Health and Human Services with the Internal Revenue Service, the Social Security Administration, Homeland Security, and who knows how many other government agencies.

This makes Big Brother look like a benevolent midget.

The dream of the left, articulated by Marx and Lenin, is to create a rigidly ordered society where messy individualism—AKA liberty—is suppressed in favor of  a utopian common good. Of course, the common good, as defined by the ruling leftists, is forever being downgraded to new normals.

For Obama, this is the new normal of massive unemployment and unsustainable national debt. In a few years, the new normal will be further redefined and downgraded. Before you know it, you live in a society where the common good has been so degraded that the very act of remembering what life used to be like under the banner of liberty and free enterprise is but a distant memory, if not a subversive thought as defined by those supermen who regulate our intake of salt, the size of our soda cups, what light bulbs we can use, and how we flush our toilets.

Welcome to Obamaland, where death and taxes is no longer an ironic statement, but a grim reality.

Visit Sephardic Secret.

Haredi Paper Equates Lapid and Hitler Speeches

Monday, May 6th, 2013

Haredi author Chaim Walder compared policies and newspaper columns by Finance Minister Yair Lapid with speeches by Hitler, stating that although “those who hate religion do not want to physically destroy hareidi Jews, they have wicked plans…to strip us of basic rights.”

Lapid’s office called Walder’s column “dangerous incitement.”

Lapid, head of the Yesh Atid party, successfully campaign in the last elections on a platform calling for “equal burden,” meaning that Haredim in Israel should serve in the IDF or do national service, work and pay taxes instead of receiving money to be enrolled at yeshivas.

Since taking the post as Finance Minister, Lapid also has called for eliminating child support benefits, which Prime Minister Binyamin Netanyahu drastically reduced when he was Finance Minister in the Sharon government. His move was one of several actions that pulled the Israeli economy out of the doldrums and helped spawned unprecedented growth and stability.

Other Haredi sites defended Walder’s potshots in his column, pointing out that he did not compared Lapid with Hitler, while non-religious media reported the column in a negative light.

Walder indeed took pains to point out that Lapid does not want to physically kill Jews, but he used a line in a column that Lapid, a journalist, wrote two years ago, and compared his expressions with Hitler’s death wish for Jews.

Lapid, whose late father Tomy Lapid was a survivor of the Warsaw ghetto uprising, had written, “Forget ideology; forget that I do not understand how it doesn’t bother you that you live at my expense. I can’t continue paying for it for there is nothing left. I have nothing to give your children and nothing for my own….

“We have to find a way my friend or this will not end well. What does it say in Taanis [in the Talmud], ‘Friendship or death.’” That  statement is similar to those of Hitler, according to Walder.

The Haredi writer referred in his column to “someone famous” who insisted Jews must participate in “productive work” to avoid a calamity. After identifying the “famous person” as Hitler, Welder continued, “Those who hate religion don’t want to physically annihilate Haredim” but have “wicked plans regarding quality of life, the ability to live a normal life. To strip us of basic rights like payments, tax discounts, welfare, food for our children… there are even those who speak of taking the freedom to vote, or of leaving Israel, which is true dictatorship.”

Quality of Life?

Haredim argue that life is better if one learns Torah and does not work for a living.

There no statistics to support either side in the argument over how many Haredi men really learn while receiving stipends for learning. Many learn a bit, or not all, and indeed work, receiving money “under the table” without paying taxes.

That does not make them any different from tens of thousands of secular “independents” who also do not pay taxes. They accept payment for work without reporting the revenue when filing tax returns.

But to say it is a basic right to receive benefits for learning Torah and not serve in the army or do national service essentially demands that the government adopt those values and ignore the value taught by Torah sages – learning Torah and also working.

There actually are many Haredim who do both.

For example, Chaim Walder.

Bill Clinton Tried to Block Israel’s Taxing Newly-Found Gas

Thursday, April 18th, 2013

Former Bill Clinton, the man who unwittingly carried out his promise for a “New Middle East,” worked as a paid lobbyist to pressure Israel against increasing taxes on natural gas from huge off-shore energy fields, former Finance Minister Yuval Steinitz revealed.

Clinton’s wealth is estimated at well over $55 million, making him the richest living president, but no one knows better than him that “enough is never enough,” especially when it comes to “helping” Israel.

One of his most famous “accomplishments” as president was to engineer the signing of the Oslo Accords, with a grinning Yasser Arafat and Yitzchak Rabin at his side on the White House lawn. Clinton promised a “new Middle East,” and we got one when the Oslo Accords literally exploded in Israel’s face in 2002.

Clinton has not given up his version of helping Israel while making pocket money to boot.

Israel has the wonderful problem of figuring out how much to tax the gigantic natural gas pumped from discoveries off the Mediterranean Coast. The energy fields will bring billions of dollars in profits for energy companies, and the government wants a share of the natural wealth.

As Finance Minister, Steinitz proposed raising taxes on companies that developed the natural resources. The energy firms still would be left with envious profits but wanted to stop the tax hike, a reasonable objective for any company.

Clinton’s agreement to be its front-man raises serious questions about the ethics of a former president lobbying a foreign country.

“Pressure [against the tax hike] began from the White House,” Steinitz told the Hebrew language Maariv newspaper.

“The energy companies hired American lobbyists, including former President Bill Clinton, who sent letters and had discussions to dismantle the Shashinsky Commission,” which examined the natural gas issue, “and to stop the tax law.”

“Members of the U.S. Congress asked me for clarifications,” Steinitz said. “We began to feel a sense of pressure, as if we were doing something impeachable to commercial ties between the two countries. I tried to explain that we are among the countries earning the lowest rates from natural gas and petrol, that we get nothing and that the citizens of Israel have as much moral right to profit from public resources as do private companies.”

The Shashinsky recommendations for a tax increase in November 2010, and the pressure decreased, apparently under orders of President Barack Obama.

No one has accused Clinton of doing anything illegal, but the ethics of the former president’s polices and accumulation of wealth following his terms of office deserve examination.

“Between 1997 and 2003 …You went from a period, a regime, where people did have at least some concern about going to jail, to a point where everything is legal. …Looking back I would say that this period definitely started under Clinton,” said Charles Ferguson, whose documentary film Inside Job in 2010 won an Academy Award.

Clinton certainly did not have to lobby against Israel for lack of money.

“I never had any money until I got out of the White House, you know, but I’ve done reasonably well since then,” Clinton has said in an understatement that would be laughable if not true.

“Reasonably well?” Let’s check.

As a lame duck president in December 2000, Clinton signed into law the Commodities Futures Modernization Act, which ensured that derivatives could not be regulated. Two months later, shortly after leaving the White House, Clinton received $125,000 from Morgan Stanley for a speech Clinton he delivered to the company in New York City.  A few weeks later, Credit Suisse also hired Clinton for a speech, at a $125,000 speaking fee, according to the NakedCapitalism.com website.

“It’s not a coincidence that deregulation accelerated in the late 1990s, as Clinton and his whole team began thinking about their post-Presidential prospects,” the site added.

If Clinton was only somewhat rich man before becoming president, he has more than made up for lost change.

In the decade after the end of his second term, he pocketed nearly $10 million for speaking fees. That comes out to a lot more than his hourly wage as president.

And who paid for the privilege of hearing his wisdom?

Citigroup: $250,000; Deutsche Bank, $150,000; Goldman Sachs, $300,000 for two speeches, and that is only three coins in the fountain.

Three Mistakes that Can Get You in Big Trouble

Sunday, March 31st, 2013

Filing taxes is complicated. The forms aren’t particularly user friendly, and if you’re not quite sure what you’re doing you can end up making quite a few errors. The problem with errors on tax forms is that they can be very costly. For people who have multiple citizenships and residences (think olim or folks who spend a portion of the year living in Israel), the challenges of tax reporting are even more complicated.

I spoke with international tax lawyer Dave Wolf (and fellow contributor to a book on tax guidelines for American expatriates) and asked him, “What’s the worst mistake you’ve seen an expat make?”

He said: “The biggest mistake that I’ve seen expats make is believing that once they move out of America, they no longer have to report their worldwide income or report the existence of foreign bank accounts or companies.” Indeed, when it comes to the IRS, out of sight is not out of mind. It’s also important to note that if you have American citizenship through a parent or grandparent, even if you’ve never lived in America and English isn’t your mother tongue, you’re still obliged to report to the American tax authorities.

Mistake #2

Another common blunder that Dave mentioned was that people look for investment opportunities without taking into consideration the U.S. tax code. Specifically, complicated U.S. tax laws basically prevent American taxpayers from investing in overseas mutual funds. The IRS considers those investments “PFICs,” (passive foreign investment companies), and most Americans who understand how they work would not want to get involved with them or offshore mutual funds. When trying to invest smartly, lack of knowledge of international tax consequences can cost you a lot of money.

Final Mistake

The third blunder people make, Dave said, is “They either go to the wrong adviser, one who has no overseas experience, or they just don’t get any professional help at all.” I asked how you can avoid these mistakes. He said, “Make sure to consult with your tax lawyer, accountant, and/or investment manager before you leave the States to avoid any adverse tax consequences of investing or moving money overseas.” Sadly, many people overlook this seemingly small detail before making what could be one of the biggest financial decisions of their lives.

Find out more about what Dave has to say about avoiding making major tax mistakes by reading The Expatriate Guide to Managing Money and Taxes. For Jewish Press readers, get half off the regular price of the book by using the discount code JPRESS. Go to www.ExpatGuideToMoney.com and order now. The discount will expire on tax day, April 15th.

Knowledge is power, and reading this easy-to-follow guide for U.S. expats you can stay in full compliance with the law.

Printed from: http://www.jewishpress.com/blogs/goldstein-on-gelt/three-mistakes-that-can-get-you-in-big-trouble/2013/03/31/

Scan this QR code to visit this page online: