Malcolm Berko
Dear Mr. Berko:
What do you think of the new issue of Irish bonds that recently went public and will yield a 6.1 percent interest rate in 2020? Will Ireland be able to pay this rate over the coming years? I can afford some risk and have $15,000 to invest. Please advise us on these bonds. My wife and I are American citizens and moved here from Dublin in 1981. We own two rental properties there with her parents (we earn no income from them) and have 2,100 euros in an Irish bank that doesn’t pay anything; it’s there for convenience. We understand that the U.S. Treasury is going to investigate foreign bank deposits, and because we have never reported this deposit, we need to know whether we need to file an amended tax return.
DL in Akron, Ohio
Dear DL:
Do you know that “Molly Malone” is the official anthem of Dublin? In the very early 1950s, our “summer neighbor” next door, also an Irisher, also from Dublin, would sit on his porch most evenings, drinking Jameson and singing “Sweet Molly Malone.” I still remember the lyrics. My dad used to say of the Irish: “Thank heavens the Lord gave whiskey to the Irish, because if they were sober, the Irish would rule the world.” And I say of those Irish bonds: Go for them. In this market, they’re a bargain. And I think most things in Ireland are a bargain, especially St. Killian’s Camembert, one of my favorite cheeses, made by Carrigbyrne Farmhouse in County Wexford.
After two difficult years, the Irish government returned to the bond market, which is certainly a good indication of recovering health after its ignominious 2010 bailout. I wish I had the smarts two years ago to buy some of the older discounted bonds yielding 15 percent. But hindsight is perfect vision.
This bond sale reflects a smart turnaround and a renewed confidence in the Irish economy — which no one should have doubted. Ireland was the second eurozone country to seek a bailout and took $82 billion in loans from the IMF and the EU. Since then, Ireland has successfully managed to distance itself from Europe’s weaker and more fiscally frail countries that lack the social and political resolve to enforce austerity measures. Therefore, the National Treasury Management Agency was able to sell $5 billion in bonds, some maturing in 2017 at 5.9 percent and some maturing in 2020 yielding 6.1 percent.
I doubt the IRS is interested in your 2,100 euros, but considering the partial ownership of your rental properties, you might talk to an accountant to be certain you’re in compliance with U.S. regulations. Certainly, the intransigent mindset of some IRS “stupids” could turn a small, unintentional error of omission into a serious charge of intentional commission. But some accountants might tell you to let snoring dogs sleep. Most IRS folks are good people who don’t give a flying fig about those few euro coppers. But you could get stuck with an IRS misfit who, like a bad cop, sees just three colors: black, white, and black-and-blue.
The IRS is after very wealthy Americans (like members of Congress or Wall Street pimps) who have billions socked away overseas. Rules mandated by the Foreign Account Tax Compliance Act require foreign banks and financial institutions to report American accounts directly to the IRS. It’s estimated that there’s more than $30 trillion cash (yes, “t,” trillion) secreted in “pirate banks” located in virtual countries, shrouded by various trusts with strange-sounding names and spread out among numerous legal jurisdictions that is nearly impossible to trace. And you can assume that Goldman Sachs, Bank of America, J.P. Morgan, Rothschild Group, Barclays, Deutsche Bank, Bank of Rome, BlackRock and other institutions that manage more than 12 trillion of those dollars are complicit in their formation and secrecy.
While I can’t fathom people who revel in that kind of money, I can understand how our onerous and consumptive tax system makes cheats of nearly every American who files a tax return.
—————
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775 or e-mail him at mjberko@yahoo.com. Visit Creators Syndicate website at www.creators.com.
© 2012 Creators Syndicate Inc.
