And so it begins…again.

I have posted a few times on the plans of people in government to confiscate citizens’ retirement accounts (i.e., their IRA and 401k accounts).  Here is a list of those posts:

Kiss your pension fund goodbye.

Can you smell what Barack is cooking?

It’s your money, and they want it NOW!!!

And so it begins…

Confiscation of retirement accounts is not just some conspiracy theory.  It’s already been decided, the only thing that FedGov has left to do is to make such a confiscation more palatable to the American people.  And here’s where I predict it will begin (hint – “the rich” are involved):

Startup founders, for instance, may get the chance to put nonpublicly traded shares of their burgeoning business into a retirement account before the company goes public. If the company takes off, the price of the shares could balloon from fractions of a penny to millions of dollars.

If that IRA account happens to be a Roth IRA, it’s like winning the tax-free lottery since only contributions to a Roth, not earnings, are subject to tax. If it’s a traditional IRA, Uncle Sam will get his due, eventually.

***The GAO’s report broke down the landscape of IRA ownership and told how a few people came by their vast IRA fortunes.

IRAs for the super rich

IRA balance Estimated number of taxpayers
$1 million or less 42,382,192
> $1 million to $2 million 502,392
> $2 million to $3 million 83,529
> $3 million to $5 million 36,171
> $5 million to $10 million 7,952
> $10 million to $25 million 791
> $25 million 314

Source: GAO analysis of IRS data. From “IRAs: IRS Could Bolster Enforcement on Multimillion Dollar Accounts, but More Direction From Congress Is Needed.”

A handful of people have amassed more money than would be possible from prudent saving and wise investing (what does that say about prudent saving and wise investing as opposed to starting your own business?).  Instead, startup founders and private equity executives were able to build their balances by putting non-publicly traded securities with very low valuations into their retirement accounts.

***

The GAO is concerned that a few people are using IRAs in a way that was not intended by Congress and that the IRS could be losing out on millions in tax revenue.

There it is.  The IRS could be losing out on millions in tax revenue.  So the Feds have to clamp down on these shysters for the children to protect you from…what exactly?

“There are a lot of assets being held in the accounts, and the government wants to track it better so that when people are taking distributions of not cash – assets – they can be more sure that the assets are being valued correctly,” says Jaime Raskulinecz, CEO and founder of Next Generation Trust Services, a provider of self-directed retirement account services in Roseland, New Jersey.

For instance, if you own a racehorse through your IRA and decide you would like to take a distribution from the account in the form of 1 equine, the IRS wants to know how much that horse is worth to better calculate taxes owed.

“A number of industry stakeholders we interviewed expressed concerns that individuals who invest in nonpublicly traded shares … using IRAs and (defined contribution) plans may undervalue these assets, thus substantially increasing their tax benefits,” the GAO report stated.

Investigating valuation issues requires hiring outside experts and attorneys, and that gets expensive. Taxpayers foot the bill, and the IRS has only 3 years to detect and go after improper valuations.

Uh oh.  That’s unfair.  Just like life.

A section of the report directed at Congress proposed some changes to IRAs that could include:

  • Limiting the types of assets permitted in IRAs. It’s not just shares of startups that populate self-directed IRAs. Self-directed IRAs can invest in real estate, timberlands, racehorses, Broadway shows, cattle, precious metals and even interests in oil wells.
  • Requiring a minimum valuation for an asset purchased by an IRA. Founders of startups and their employees may get nonpublicly traded shares valued at less than $0.01.
  • Putting a cap on the amount of money that can be accumulated in IRAs. Congress could require an immediate distribution of balances above the ceiling, the report suggested.

Just remember that once they get done taxing the rich, they’re coming after you.  Just like they did with the income tax over 100 years ago.

 

 

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Categories: Bastards, Government Shenanigans, Lawless, National Debt, Retirement accounts

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