Have you not seen the reporting at Pro Publica? Manipulating a finacial instrument to avoid taxes strikes me as a prime example of a tax haven.
I found the article inspiring. How many people would have the foresight to do what he did and delay gratification by locking up that kind of wealth until the age of 59.
I just don’t see how another perspective can be reached with the same information
Put aside some money for the future.
Invest the money into company stocks, generally.
(Hopefully) having made good investments, have more money in retirement.
Retire and have some tax free money.
Most investments don't apprechiate quite so much, of course, but there were no rules on investment returns, only about contributions (and restrictions on self-dealing which may very well apply)
You are at no greater advantage in growing your money after tax unless the tax code changes. (tax code change risk is the only reason people go with a roth). It just provides certainty.
As to why it’s illegal, selling an arbitrary number of shares in your private company to yourself for 1$ then buying it back from yourself at say 1 billion dollars is normally legal. So, without such limits everyone could move unlimited money into a Roth IRA.
and the penalties are also clear, up to 100% penalty of the value of the transaction if it isnt unwound
Thiel could have paid that $2,000 and not unwound the transaction
It is not possible for the court to hear any other perspective
The timing of his “investment” is also off, he put the funds in after a seed round. Therefore those shares where worth far more than the annual Roth IRA contribution limit.
You can sell shares at arbitrary discounts especially when there are not liquid markets. If stock options are more necessary to circumvent accounting then in the money options can be used as well, with the Roth purchasing the stock options instead of earning it and getting more money in future years to purchase the in the money stock.
Now the government doesn’t go after the vast majority of criminals be that the IRS, FBI, or your local cops. However, that has no impact on what is or isn’t breaking the law as written. As such this was clearly tax evasion because it’s illegally reducing taxes he would owe and it’s fraudulent activity because it’s falsifying financial records for personal benefit. Hell was likely also wire fraud depending on how he submitted tax documents, not that such charges are normally tacked on to such cases but they still apply.
You know, 22 years later you can still do this as well and it wouldn’t be tax fraud or wire fraud.
You can do it even better now, than then, by doing backdoor Roths.
Play the game by a more efficient set of assumptions because yours are just self limiting.
Not if he used am old pre round validation after the investment occurred at a higher valuation as has been reported.
Also your penalties where off: However, if the individual for whom the IRA was established or the IRA’s beneficiary engages in a PT with respect to the IRA, the sanction is the loss of the tax-exempt status of the IRA as of the first day of the taxable year in which the PT occurs.
As such, all transactions after the original transaction lack their tax exempt status. As such based on listed rules and including interest and penalties and he’s potentially facing a multi billion dollar tax bill.