There’s a good reason why Google, General Electric, Abbott, Honeywell, Johnson & Johnson, Microsoft, Oracle, Apple, and more or less all the other big corporations use offshore strategies: They provide tremendous tax advantages and thus, financial advantages.

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Astute private investors know this as well.

Getting your money offshore, however, is not a complete fix. Taxing agencies are notorious for chasing and punishing the innocent, and unlike the mega-corps, individual investors don’t have people in Washington wining and dining congressmen.

The private investor needs to stay away from the tax man altogether. That, especially considering the IRS’s new dirty trick, requires some attention. The trick can be countered, but not if we sit in the open and do nothing… we have no senator to make phone calls for us.

To rent or buy this 54 minute video with Costa Rica Attorney Roger Petersen please visit our Video On Demand page here.

The Tax Man Takes the Easy Path

Imagine, if you will, that you’re a tax agent. Every company you visit will hate you, even though they try not to show it. When you inspect their office, you can feel the anger… which makes it hard for you to maintain your “I’m a force for good” self-image.

So wouldn’t it be easier if you didn’t have to chase targets that way? Wouldn’t it be better to do it from your comfortable office… especially in the winter?

Of course it would, and that’s exactly what mass surveillance allows the tax men and tax women to do. They can remain in their offices, bop around the Internet at their leisure (check this out), and tap into government surveillance databases to find targets.

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Now, if that sounds like a civil rights violation to you, you’re correct. Nonetheless, that’s exactly what’s happening these days. And to prevent cases like this from getting thrown out of court, the tax agencies have developed special tricks.

The NSA/IRS Manual
There is a trick for bypassing inconvenient things like bills of rights. It’s called “parallel construction,” and, believe it or not,  the IRS has a manual for it.

Parallel construction is a three-step process:

  • Dig through illegal databases to find ripe targets.
  • Create an alternate way of finding the necessary evidence. In other words, patch together an alternate path to information that can be used against the target.
  • Lie to the court and tell them that you found your information without using illegal data.

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And as mentioned above, we know they’re doing this because part of their manual has been posted to the Internet!

Sadly, the Story Doesn’t End There
As if this weren’t bad enough, word broke last year  that the IRS believes “the Fourth Amendment does not protect communications held in electronic storage, such as email messages stored on a server.”

So it’s open season on old emails at Gmail, Yahoo, and the other free email services. No warrant is required, by the way.

The Answer

However much we may complain about the unconstitutionality of the tax man’s new trick, the manual was made public more than a year ago, and no one has been prosecuted. (Yes, you would think that teaching people to lie in court would be illegal, but right and wrong don’t matter anymore.)

So, for better or worse, the situation rests in your hands.

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The way to keep yourself out of this new trap is simply to stay out of the NSA’s databases and to keep your emails out of the hands of third parties.

First, that means that you can’t give your information to Facebook, Google, and the rest of the freebee services. These companies will always sell your information to outside parties, including governments. How else do you expect them to pay thousands of programmers? You don’t pay them, do you?

Second, you must stop using free email. Again, “free” is never really free — all the freebee services have employees to pay, and a few lame ads won’t cut it. That means you need a secure email service… and you’ll have to pay for that. Again, “free” never really means free — it only means that the price you pay is hidden.

Finally, you have to cloak yourself on the Internet. That means that the NSA (or whomever) should not know who you are. There are three ways you can do that:

  • Spend the time to learn security on your own. Admittedly, this is not all that easy to do, and there are many mistakes to be made. But if you are technically minded, here’s a free guide to show you how.
  • You can pay for a proper security service (one that protects surfing, email, chat, and iPhone/iPad/Android if you use such things).
  • The service must run their own Public Key Infrastructure. You don’t have to understand what that means, but you must ask.
  • They must provide two or more hops. Again, you have to ask and get a yes or no.
  • They must have human customer service people.
  • Quite honestly, such services are few and far between, and self-serving as it sounds, the only complete solution I know of is the one my colleagues and I had to build ourselves called Cryptohippie.

    But by all means look. Just use the checklist given above to ensure you get a good one.

  • You can buy a discount VPN and “pretend” that you’re safe. I say “pretend” because it’s already been proven that the NSA (followed by all the other big data thieves) has blown through dozens or hundreds of these so called “privacy services.”

Ultimately — as with most things in life — the choice is yours. But at least now you have the right information to make the right choice.

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The IRS’s New Dirty Trick… and What to Do About It

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