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Guest Post: Are You Ready To Be An Unpaid Government Spy?

Tyler Durden's picture


Submitted by Simon Black of Sovereign Man blog,

Apparently the IRS has fallen on hard times in light of all this government shutdown and sequestration nonsense. Too bad.

According to a recent report from the Treasury Department, ‘enforcement revenue’ at the IRS has fallen for the second straight year.

Enforcement revenue is what the IRS collects beyond normal tax returns; when an auditor goes out to your office, turns your books upside down, and hands you a tax bill for $25,000, they consider this enforcement revenue.

Tax enforcement is one of the only ‘money makers’ for the US government; according to the IRS, every dollar spent on tax enforcement generates six dollars in additional tax revenue.

This is an astounding return to say the least. And no doubt, one of the secrets to the IRS’s success in generating such a prodigious yield is the culture of fear they have developed.

Over the last four years, 9,504 individuals have been convicted for tax-related crimes. Over 70% of those are sentenced to an average of 44 months in federal prison.

This is an unparalleled intimidation tactic to scare everyone else into compliance. In fact, the Land of the Free is one of the few ‘civilized’ places on earth where tax issues become criminal matters.

Unfortunately for the IRS, though, the agency’s head count has been thinning. They no longer have enough people, and enforcement revenue has been declining.

Ordinarily the IRS supplements its ranks with legions of unpaid spies in the financial sector.

Banks and other financial institutions are required by law to rat out their customers by filing ‘suspicious activity reports (SARs)’.

Anything that a banker deems in his/her sole discretion to be ‘suspicious’ can be reported on a SAR. And these reports go straight to the federal government.

Over the years, the agency has aggressively expanded the requirements on who must file a SAR.

Initially it was just banks. Now everyone from brokers to casinos to Western Union agents are required to fill out SARs.

Starting July 1, 2014, though, the Foreign Account Tax Compliance Act (FATCA) will give the IRS a new addition in its ever-growing list of unpaid spies. You.

FATCA is one of the worst laws ever written. In addition to requiring yet more disclosures for US taxpayers who have foreign accounts, FATCA also mandates every foreign financial institution on the planet to share customer information with the IRS.

Obviously this is totally realistic.

But what most people don’t know is that FATCA contains an obscure, broadly-written provision that potentially turns every single US taxpayer into a government spy.

You see, the law decrees that if a foreign bank or business does NOT comply with FATCA requirements, then everyone else in the financial system must withhold a 30% penalty on any payment to that bank or business.

Of course, everyone is just supposed to know which foreigners are subject to withholding, and which aren’t. Again, totally realistic.

But the bigger problem is that the law very loosely defines who is responsible for making these withholdings.

According to the American Institute of Certified Public Accountants (which is THE authority for tax professionals in the US):

"U.S. taxpayers that have nothing to do with financial services will be required to collect, analyze, document, and report information regarding payments to both foreign financial institutions and nonfinancial foreign entities.”


“The FATCA definition of a withholding agent is drafted broadly, and it requires any person, acting in any capacity, having the control, receipt, custody, disposal, or payment of an item of income that is subject to FATCA withholding to have appropriate documentation.”


“As a result, all U.S. persons (individuals, businesses, trusts, retirement plans, tax-exempt organizations, etc.) are potentially affected.”

The AICPA’s analysis on FATCA demonstrates that every American taxpayer, whether they know it or not, whether they have anything to do with finance or not, whether they have any involvement with a foreign bank or not, could potentially be required to monitor, document, and report financial transactions to the government.

So… are you ready to be an unpaid government spy?


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Wed, 10/16/2013 - 15:19 | Link to Comment Headbanger
Headbanger's picture

Oh goodie!  1984 is here at last!  Praise Ford!

Wed, 10/16/2013 - 15:22 | Link to Comment CH1
CH1's picture

The IRS is plainly evil.

Wed, 10/16/2013 - 15:26 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Buy small hard assets.

Have another country to go to. *

or Go Galt.


* Lima, Peru, I note, is warming up now...

Wed, 10/16/2013 - 15:33 | Link to Comment negative rates
negative rates's picture

Abolish the IRS, flat tax or bust!

Wed, 10/16/2013 - 15:43 | Link to Comment Trucker Glock
Trucker Glock's picture

Consumption tax, please  And, terminate the IRS with extreme prejudice.

Wed, 10/16/2013 - 15:49 | Link to Comment TruthInSunshine
TruthInSunshine's picture

"If you see ANYTHING, say something. We have more data storage capacity than you'd probably be able to comprehend, and we need to try & justify our very existence."

---Big 'Sis (letting a Stellar Wind rip)

Wed, 10/16/2013 - 21:08 | Link to Comment TheReplacement
TheReplacement's picture

The IRS doesn't write the laws.  The people who the people vote for write the laws.  In the end, this belongs to the people.

Wed, 10/16/2013 - 22:21 | Link to Comment Chicken_Little
Chicken_Little's picture

The IRS doesn't write the laws.  The people who the people vote for write the laws

The people in office are too dumb to write those complex 10,000 page laws.....they even admitted they don't read them. The special interest groups write the laws and then pay off/bully congress into passing them.

Wed, 10/16/2013 - 15:22 | Link to Comment WarriorClass
WarriorClass's picture

San Antonio Police Chief General William McManus Antonio de Padua Maria Severino Lopez de Santa Anna threatens to arrest Texans at the Alamo for execising their constitutional rights:

Wed, 10/16/2013 - 16:35 | Link to Comment chemystical
chemystical's picture



I support these folks whole-heartedly.  The police chief is exceding his authority.  Considering that this event was well-covered in the local media last year, there should be ZERO ambiguity as to the intent of those choosing to bear unloaded weapons, and the cops can claim no basis for saying that they arrest or issue citations because these folks are threatening the public or acting in a way that could reasonable be perceived as threating the public.  Even if John Q felt threatened, then that's too bad, and John Q needs to be better-educated, because state law trumps his addlepated/indoctrinated sheopleness.

The movement might garner more legitimacy in the eyes of the sheople if it was coordinated in dozens of other cities.  Sadly, this year's display will be no different than last year's:  2 dozen mostly male white folks aged mostly in their 50's and 60's, and the media will have a field day (again) portraying them as exactly that.

Wed, 10/16/2013 - 16:29 | Link to Comment Ruffcut
Ruffcut's picture

I'll spy for them. My spy cam is located inside my toilet. They can have all the brown eye action they want.

Fucking cunts.

Wed, 10/16/2013 - 15:21 | Link to Comment Spastica Rex
Spastica Rex's picture

Can I at least put the experience on my vitae?

Wed, 10/16/2013 - 15:24 | Link to Comment Belrev
Belrev's picture

Complex systems are prone to collapse. This globalized New World Order is too complex. It will collapse. Either its laws will be ignored as unrealistic and unimplementable or they will cause a resistance that will seek to destroy the Order. Communism was unnatural it collapsed. National Socialism was unnatural it collapsed. Roman Empire was unnatural it collapsed. The enthropy always wins over.

Wed, 10/16/2013 - 16:23 | Link to Comment chemystical
chemystical's picture


1) What is "enthropy"?  Did you instead mean "enthalpy"?  Did you intend to use the word "entropy"?  Or was that an attempt at a spoonerism or portmanteau word?  Either way you're abusing the word and the concept.  Yeah, it's a big boy scientist word, and it might impress the halfwits in your circles, but before tossing it around you might want to familiarize yourself with its meaning.

2) National Socialism was unnatural?  How so?   "It" collapsed?  Which example(s) are you citing?  If you're referring to Germany, Japan, and Italy, then it's FAR MORE ACCURATE to say that "it" was bombed and starved into submission.  Prior to that it  invigorated those economies and brought them out of the worldwide depression well ahead of the rest of the world.  Unfortunately for them, history is written by the victors (and recited by the halfwits).  If you and 49 friends can collectively beat the shit out of me, then that doesn't ispo facto confer upon you the mantle of badass whose "kung foo" is better than mine.


Disclaimer: while my primary degrees are in physics and in chemistry I do also have a degree in business and freely poke at the foibles of brethren in all 3 disciplines.



Wed, 10/16/2013 - 16:32 | Link to Comment centerline
centerline's picture

All "isms" and the like that attempt to negate natural cycles and behaviors result in failure.  Complex systems are in fact more prone to failure as well.

If you are shooting for "arrogant prick" status - mission accomplished!

Wed, 10/16/2013 - 16:50 | Link to Comment chemystical
chemystical's picture



Please remove yourself from the arrrogant prick crowd and do tell EXACTLY what (in the context of the OP) natural cycles and behaviors are?  If you can't do that then it's you who are the uninformed arrogant prick.  I won't hold my breath.

If you can refute that Japan Germany and Italy did not emerge from the great depressions before other economies, then please do so.  Nationalism, as a matter of fact, is extremely natural.  You don't see many monkeys hanging out in the elephant herds now do you?  Are we different than the other million species?  Yep.  In the context of the OP, do we have more similarities to them than differences?  Yes again (and far more_.  Is the other half of that term natural?  Socialism?  I'll again argue that socialism is far more prevalent and natural in the world than "every man for himself" and lone wolves.  Do I want to be my brother's keeper in the way that the Libs want me to?  FUCK NO, and the National Socialists were FAR from the commune hippies where everyone wants free shit but no one wants to take the garbage out.

Easy to throw darts and call people pricks but your arguments are, wait, they're completely fucking non-existent.  You work for Ad Hominens R US?  I hear there's an opening across the street at LAZY FUCKING INTELLECT INC

Did I say "FUCK YOU" clearly enough asshole?

Wed, 10/16/2013 - 17:14 | Link to Comment CloseToTheEdge
CloseToTheEdge's picture



“What the mind doesn't understand, it worships or fears.” a.walker

Wed, 10/16/2013 - 20:13 | Link to Comment stirners_ghost
stirners_ghost's picture

He obviously meant "entropy". IMNSHO, the metaphor holds water.

It requires [literal] energy to impose social order. This frictional loss would eventually drain a closed system of useful energy - "entropy always wins."

The point is more profound, though, if energy is taken as a metaphor for *value* - the currency of rational agents in an economic system highly analagous to energy in a physical one.

Coercive social institutions are perpetual motion contraptions, necessarily sucking more value than they return.

"Government is the great fiction through which everybody endeavors to live at the expense of everybody else." -Bastiat

Wed, 10/16/2013 - 16:23 | Link to Comment Ghordius
Ghordius's picture

"This globalized New World Order is too complex"

1: N-W O or N W-O? Balances... shift

2: is it? It entails way less "central planning" as many would like to make believe. Sticking to a position ain't "planning"

Wed, 10/16/2013 - 16:59 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

Bingo, Belrev. Laws are so vast and indecipherable that non-compliance is an easy and effective method of monkey-wrenching the system.

In addition to do-chen's advice above, stay small, be inconspicuous, avoid confrontation and, above all, practice non-compliance. If questioned, claim ignorance (whether real or imagined). Government agents aren't really very bright.

Wed, 10/16/2013 - 15:22 | Link to Comment Winston Churchill
Winston Churchill's picture

Didn't FACTA get very quietly tabled back in August ?

Slipped into a Bill about something else.Sure I read it somewhere.

Wed, 10/16/2013 - 15:45 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

If you filed your Income Tax via a CPA, they will undoubtedly have asked 2 FATCA questions in their Survey:


1. Do you have signing authority over a Foreign account?

2. What is the value of this/these account(s)?

Wed, 10/16/2013 - 16:07 | Link to Comment MachoMan
MachoMan's picture

That and if you're cheating enough on your taxes, then your CPA will turn you in for the reward!

Wed, 10/16/2013 - 16:12 | Link to Comment Winston Churchill
Winston Churchill's picture

Post August ????

Wed, 10/16/2013 - 15:23 | Link to Comment SgtShaftoe
SgtShaftoe's picture

Anyone know something more about the existing report that Chase is halting wire transfers on business accounts more than 50K / month starting Nov 17th????  Look up "Chase bank limits cash withdrawls, bans international wire transfers"

Wed, 10/16/2013 - 15:29 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

That seems unrealtisic, but....

If so, choose another bank.


Wiring $50,000 is NOTHING for many businesses.   Our business in Peru wires that much to Korea a few times per year.

Wed, 10/16/2013 - 15:48 | Link to Comment SgtShaftoe
SgtShaftoe's picture

Seems strange to me, but the copies of letters from Chase are posted all over.  I don't have anything to do with Chase myself.  This may be only affecting small companies and organizations, it affects Chase Business Select and Chase Business Classic accounts.  That's why I asked the question.  I would suppose it is just for small companies.  There seems to be a new change as well for Chase business savings accounts effective the same date that they will stop allowing wire transfers completely. 

I agree with you, payroll for many smallish companies can be $1M+ each pay cycle, but then again here we are. 


Edit: Looks like zerohedge picked it up after I posted this question.  Thanks Tyler

Whoever downvoted me is an idiot it seems.

Wed, 10/16/2013 - 16:55 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Good catch, Sgt!  You beat Zero Hedge, you win! 


Lots of idiots vote me down too!

Wed, 10/16/2013 - 15:25 | Link to Comment olto
olto's picture

i want to be a paid spy

like simon

Wed, 10/16/2013 - 21:26 | Link to Comment CoolBeans
CoolBeans's picture

I would never.  I would never help this gubbermint.

I just wanna get paid.  For legit work.  Thankfully I have a deskload - I am thankful everyday for an honest day's work.

Wed, 10/16/2013 - 21:49 | Link to Comment olto
olto's picture


You are already on the payroll, dude, when you can write:

"I just wanna get paid.  For legit work.  Thankfully I have a deskload - I am thankful everyday for an honest day's work."

Don't you understand any of this?


Wed, 10/16/2013 - 23:57 | Link to Comment CoolBeans
CoolBeans's picture

New person ("Olto") -

I have implied I do not want to be a free spy.  I do not want to be a paid spy.  I just wanna get paid for doing my own work in the business I own.  I'm not going off the grid entirely - I have children to feed.  So, I was responding to the "FREE SPY WORK" and nothing else.

Do YOU understand any of this?

Thu, 10/17/2013 - 08:43 | Link to Comment olto
olto's picture


Wed, 10/16/2013 - 15:41 | Link to Comment tmosley
tmosley's picture

Simple, just don't pay taxes.  Do this legally by quitting your job.

You, too, can be John Galt.

Wed, 10/16/2013 - 15:45 | Link to Comment Trucker Glock
Trucker Glock's picture

Is there anywhere in the USSA that doesn't have property tax?

Thu, 10/17/2013 - 03:59 | Link to Comment Cthonic
Cthonic's picture

Allodial title!? Surely you jest.

Wed, 10/16/2013 - 15:59 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

If you live in one of the following 7 states, you already do NOT pay Federal Income Tax.  Only State tax.

Just for grins, any bets that people from these states are the most "vocal" about Federal Gov spending?

The real Q, IMO, is where they would be, were it not for the Fed Gov spending money on them.  Money collected from the other 43 states.  It kinda reminds me of the many comments that the FSA and Welfare zombies would go berserk if their benefits were cut off.  Or are we supposed to beleive the these "chronically dependant" groups vote only Democrat?

I truly, passionately and deeply hate, loathe and despise Hypocrisy.  No matter whose!  Hence my soapbox stand.  But, hey, if the cognitive dissonance is too much, I'll understand it if some take it out on my post.  ;-)

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming
Wed, 10/16/2013 - 16:09 | Link to Comment chubbar
chubbar's picture

You have it backwards. You only pay Federal Income tax in those states, not state tax. Although even that is a misnomer. For instance NH you will pay dividend taxes on dividend income above $2500 (IIRC) and they levied a $100 LLC tax (IIRC). So taxes are slowly seeping into even these supposed tax havens. You'll find though that the property taxes in these states (at least NH) are relatively high compared to other states. Let's face it, the gov't is going to get it's money one way or the other. None of the asshats in gov't appear to be able to control spending.

Wed, 10/16/2013 - 16:59 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

As far as I know, chubbar is 100% right.  We pay income tax to the feds in FL, no state income tax.

Wed, 10/16/2013 - 16:25 | Link to Comment YC2
YC2's picture

How much do you loathe ignorance on a soabbox?

Wed, 10/16/2013 - 16:33 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Mea Culpa.  :-(  I hate my dyslexia more than my 'ignorance'.   But I like your cheeky response.  :-)

Come to think of it... we used to live in one of those states, and I now remember not paying State income tax.

Wed, 10/16/2013 - 21:14 | Link to Comment CoolBeans
CoolBeans's picture FL you pay Fed Tax; no State income tax

Wed, 10/16/2013 - 16:45 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Don't use the banks, simple. Go long pawn shops, mattresses and bitcoins for savings, spending, loans and internet commerce. Wireless mesh networks for local digital services between the pawn shops and local businesses.

Wed, 10/16/2013 - 15:48 | Link to Comment youngman
youngman's picture

Its very hard to get an account down here in have to prove you are not a drug dealer every other month..that means 3 years worth of Tax info and any other item they may want to see...and copy.....I quit..I closed my account down was to much of  a hassle...

Wed, 10/16/2013 - 22:17 | Link to Comment Chicken_Little
Chicken_Little's picture

In Thailand most big banks have stopped allowing American tourists to open accounts. You now have to prove residency and my branch manager said soon no Americans will be allowed to open an account (thanks FATCA). Existing accounts are okay, but the doors are closing everywhere allowing sheeple to stay outside of the fence.

I suspect Chase's recent move is to force customers to show up in person and answer all the questions on the gov form.

Wed, 10/16/2013 - 15:51 | Link to Comment Trimmed Hedge
Trimmed Hedge's picture

I am proud to be a service to my country!

Wed, 10/16/2013 - 17:01 | Link to Comment 813kml
813kml's picture

And your country is grateful for your service!

*now please bend over*

Wed, 10/16/2013 - 18:40 | Link to Comment Element
Element's picture

"Give me some money"

Wed, 10/16/2013 - 16:23 | Link to Comment lolmao500
lolmao500's picture

Right out of the USSR! And let me guess... if you don't report it, they can arrest you as an accomplice in defrauding the IRS?

Wed, 10/16/2013 - 16:25 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Simon, my research (with several CPAs) says that you are NOT affected if the signing authority you have is for a non-US person.

E.g. If you are signing under a POA (Power of Attorney) for a family member outside the US, who is not a US Person, you do not have breach your fiduciary and "attorney-client" privileges by disclosing their assets. This makes perfect sense, as these are not the people the IRS is after.  They are after US Persons who are trying to hide their own assets outside the US.

Unless and until I see a legal case or a direct IRS reference to the contrary, I will go by what these CPAs have said.

Wed, 10/16/2013 - 16:43 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

They can keep that in place because the DOJ will just intercept your communications like they do now with attorneys and use the NSA to decrypt it if neccesary to violate attorney client priviledge when they target you. They will just do it under the guise of national security like they do now when it comes to cases relating to 'terrorist' suspects and organizations. Remember IRS has no legal enforcement mechanisms that is all jobbed out to the DOJ.

Wed, 10/16/2013 - 16:39 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Resist either refuse to fill out the paperwork or purposely fill it out wrong making it useless.

Wed, 10/16/2013 - 17:29 | Link to Comment Salt
Salt's picture

We get to be spies? Do we get US Government issued and approved NSA "Dick Tracy" special decoder rings?

I can't wait to use the cone of silence ;-)

Wed, 10/16/2013 - 18:24 | Link to Comment GeezerGeek
GeezerGeek's picture

Will I be allowed to come in from the cold? That's about 65 degrees Fahrenheit where I live. The temperature goes that low and everyone screams 'ice age'. Well, at least it interferes with the screams of 'Hurricane! We're all gonna die!" 

Wed, 10/16/2013 - 20:58 | Link to Comment CoolBeans
CoolBeans's picture

IRS is evil.  They hire mostly insane control-freak personalities, it seems.

I would imagine that one reason enforcement collections are down is because several million U.S. residents likely are now deemed to be in an "uncollectable" status.  They're poor now!


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