Taxable Talk

The New York Times has for years editorialized against corporations "abusing the Tax Code." But does the Times practice what they preach? Of course not— that would be fiscally irresponsible.

As Allan Sloan reports in today's Washington Post (hat tip: Captain's Quarters), the New York Times is taking full advantage of Section 338 of the Code in its' $410 million purchase of About.com. As Mr. Sloan reports, Lehman Brothers' tax expert Robert Willens puts the savings at about $160 million over 15 years.

The Times has liberally noted the "abuse" of the system by corporate America. For example, on January 30th the Times editorialized against Johnson & Johnson using a section of the Code to bring foreign profits back into the US at a lower tax rate. Indeed, a search I ran of the Times's editorials and op-ed pieces from 1986 to the present found 84,425 hits for "corporate tax abuse." Admittedly, many of these will deal with scandals such as Enron; however, can anyone really dispute where the Times stands on this issue?

I have no problem with the Times taking advantage of any part of the tax code (I want my own clients to take every possible legal deduction and credit). However, the Times should change their hypocritical editorial stance on corporate tax abuse. Or their next editorial should be, "Times Abuses the Tax Code."

Our thanks to Roth & Company's Tax Updates for this article to a Tax Court decision on a frivolous appeal, or, as the Tax Court put it:

Petitioner filed a timely petition in which he sets out a farrago of nonsense as to why the notice of deficiency is invalid and he does not owe the tax determined.

From Special Trial Judge Powell of the Tax Court, in Currier vs. Commissioner, T.C Memo 2005-21.

Farrago, according to www.dictionary.com, means "an assortment or medley; a conglomeration."

Oh, Currier lost the case.

If you're ever in court, hopefully you won't insult the judge. It might come back to bite you.

According to the Arlington (TX) Star-Telegram, Charles Ford and his wife Bivian Brumley were found guilty of tax evasion. Presiding at the trial was US District Court Judge John McBryde. During the trial, Ford and Brumley told the judge and the bailiff, "You're Fired."

Any bets on them receiving the maximum sentence (sentencing is May 20th)?

The "tax honesty" movement claimed that you didn't have to pay US income taxes because the IRS was misapplying the law.

Al Thompson was the leader of one group of protesters. Note the use of "was." His new home will be a Federal institution.

I remember when I hired someone who believed that he didn't have to pay Federal income tax. He gave me a bunch of forms before he started on his first day, and told me that the income tax was illegal. I showed him to the exit door.

Article: Taipei Times.