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Sovereign Citizens Helped Swindle $1B from the Government They Disavow

nytimes.com

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Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#21

Post by ikeboy »

tmp192489 wrote: post #18

This is kind of related, but someone told me yesterday that if you move to Puerto Rico you pay 0 federal personal income tax (note: if you live anywhere else in the world as a US citizen you still pay taxes on your income), and although they have their own taxation system it's basically 0 for newcomers because they want to attract investment. If I want to sell a large chunk of capital gains in a single year, is there…

It's not 0, it's 4% and you need to jump through some hoops to do it, but basically yes. You need to get it reclassified from capital gains to consulting/contractor income.

I know multiple people who've moved to PR for tax purposes.

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#22

Post by joe_the_user »

volak wrote: post #13
habnds wrote: post #5

> Sovereigns, who sometimes call themselves “freemen” or “state citizens,” have no foundational document, but broadly they subscribe to an alternate version of American history. The tale can vary from sovereign to sovereign, but it goes roughly like this: At some point, a corporation secretly usurped the United States government, then went bankrupt and sought aid from international bankers. As collateral, the corpora…

The summary is slightly inadequate. There wasn't a corporation that usurped the government - the government made corporations of everyone Basically it goes like this - * SSN Act (created after the market crash) was created not only to provide faux "retirement" accounts but also "incorporate" every citizen of the country as a company upon birth. * New baby John Smith instantiates company JOHN SMITH with account 123-45…

I've always been impressed by an odd contrast within theories of this sort. The theories posit that the government acted illegally in various ways. But at the same time, the theories posit that despite this, there is some deeper framework of law that the government still has to obey. Yet what force would cause this deeper law to prevail if the state was committed to its conspiracy?

Of course, this sort of thing could only appeal in the US, where a lot of the laws aren't product of a giant conspiracy but rather a complex patchwork of local, state and federal strictures, so a spew of incoherent legal nonsense takes a given court office a while to deal with.

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#23

Post by dodobirdlord »

tmp192489 wrote: post #18

This is kind of related, but someone told me yesterday that if you move to Puerto Rico you pay 0 federal personal income tax (note: if you live anywhere else in the world as a US citizen you still pay taxes on your income), and although they have their own taxation system it's basically 0 for newcomers because they want to attract investment. If I want to sell a large chunk of capital gains in a single year, is there…

You pay 0 federal income tax on income in Puerto Rico. That is, when the income is in Puerto Rico, not when you are in Puerto Rico. Capitol gains income happens where the capitol gains happen, not where you live. Even though you moved to Puerto Rico you would still have to pay capital gains tax on your capital gains in the non-territorial US. But if you had capital gains on Puerto Rican assets like Puerto Rico government bonds or you sold a stake in a Puerto Rican company in a transaction that took place in Puerto Rico, then you wouldn't have to pay tax on those gains.

If you can arrange for your capital gains elsewhere to look like income in Puerto Rico though, then you're all set.

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#24

Post by crooked-v »

volak wrote: post #17
ryanhuff wrote: post #15

Earlier quoted context omitted.

Feds didn't have power to enact laws on individual citizens, so they enacted a law on citizens to convert them to corporations? Puzzled.

Citizens apply to SSN and a corporation is created for them - they are not forced to apply for one. Even to this day you can have a baby and not apply to SSN (increasing a good idea given the state of the program)

Not applying for a SSN doesn't remove the requirement to pay FICA taxes. There's only a specific list of allowed exemptions.

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#25

Post by sokoloff »

tmp192489 wrote: post #18

This is kind of related, but someone told me yesterday that if you move to Puerto Rico you pay 0 federal personal income tax (note: if you live anywhere else in the world as a US citizen you still pay taxes on your income), and although they have their own taxation system it's basically 0 for newcomers because they want to attract investment. If I want to sell a large chunk of capital gains in a single year, is there…

Look up Act 20 and Act 22.

It’s not just “take a vacation in PR for 183 days”. You have hoops to jump through and need to actually move there. I think cap gains rate becomes 4% on the PR part, with some amount of apportioning between PR and prior gains.

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#26

Post by tmp192489 »

dodobirdlord wrote: post #23
tmp192489 wrote: post #18

This is kind of related, but someone told me yesterday that if you move to Puerto Rico you pay 0 federal personal income tax (note: if you live anywhere else in the world as a US citizen you still pay taxes on your income), and although they have their own taxation system it's basically 0 for newcomers because they want to attract investment. If I want to sell a large chunk of capital gains in a single year, is there…

You pay 0 federal income tax on income in Puerto Rico. That is, when the income is in Puerto Rico, not when you are in Puerto Rico. Capitol gains income happens where the capitol gains happen, not where you live. Even though you moved to Puerto Rico you would still have to pay capital gains tax on your capital gains in the non-territorial US. But if you had capital gains on Puerto Rican assets like Puerto Rico govern…

What do you mean "when the capital gains" happens? Say I was an early employee of a company and received stock options. I exercised my options while living within the US and have private stock. The company IPOs, I move to Puerto Rico, and sell my shares while a resident there.

The "tax event" happens when I sell my shares, no?

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#28

Post by tmp192489 »

sokoloff wrote: post #25
tmp192489 wrote: post #18

This is kind of related, but someone told me yesterday that if you move to Puerto Rico you pay 0 federal personal income tax (note: if you live anywhere else in the world as a US citizen you still pay taxes on your income), and although they have their own taxation system it's basically 0 for newcomers because they want to attract investment. If I want to sell a large chunk of capital gains in a single year, is there…

Look up Act 20 and Act 22. It’s not just “take a vacation in PR for 183 days”. You have hoops to jump through and need to actually move there. I think cap gains rate becomes 4% on the PR part, with some amount of apportioning between PR and prior gains.

What kind of hoops? If you're going to do a single transaction for $500k+ that is a huge difference...

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#29

Post by mindslight »

throwaway66677 wrote: post #14

While I think the “sovereign movement” is pretty laughable in both theory and action - I think this article smacks of a total lack of even attempting to understand where these people are coming from. It’s the same people that write these articles that are surprised by the vitriol directed at the press or “how trump won” The real question is what is driving these people to behave in such an irrational way? Might it be…

One of the bases is that the government's charter (founding documents) is full of lofty ideals. But when you look at modern society in practice, most of them have been effectively nullified. And following the contour of the law, you continually see the little hacks whereby the government routed around the spirit of the higher constitutional/common law by using a procedural exception of allowing people a narrow loophole.

If you start with an assertion that the founding laws must still be in full effect (the fundamentalist mindset, effectively), then it stands to reason that if you can just find the correct loopholes you can cut through all the totalitarian cruft that was plastered on top. There's a lot of runway before individuals actually run aground from these theories (and social pressure to not admit when they've failed in a minor way), so you end up with the sovereign citizen social club.

(AFAIK what actually happened is that those loopholes were de facto closed via societal consensus. And to the degree that some of them are still effective, you're fighting an uphill social/economic battle to choose them)

Re: Sovereign Citizens Helped Swindle $1B from the Government They Disavow

#30

Post by sokoloff »

tmp192489 wrote: post #28
sokoloff wrote: post #25

Earlier quoted context omitted.

Look up Act 20 and Act 22. It’s not just “take a vacation in PR for 183 days”. You have hoops to jump through and need to actually move there. I think cap gains rate becomes 4% on the PR part, with some amount of apportioning between PR and prior gains.

What kind of hoops? If you're going to do a single transaction for $500k+ that is a huge difference...

Seriously, read up on Act 20 and 22 (whichever applies). Don’t take random 2-minute internet blurbs on it. You enter into a contract with Puerto Rico, you move there, you make required donations, comply with the other rules as required.

Set aside several evenings to do the basic reading, then if still interested, engage in a PR-based expert counsel to ensure you both understand and that you do everything correctly.

For me, it would only make sense if the amount in question was mid 7 figures if you’re just doing it for taxes and didn’t otherwise want to live in PR.

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