T Nation

Tax Loopholes

[quote]H factor wrote:
Lol at thinking any of these companies have had tax losses. [/quote]

Your own argument in this thread destroys this attempt at ridicule.

Outside of the fact you have your head in the sand if you don’t think they do post tax losses from time to time.

I’m saying the following:

Poorly written laws are the result of either lack of thought, lack of understanding or done on purpose to benefit the parties involved. I would imagine you could find examples of all three.

Huge manner would depend on what you see as huge. As for “gaming the system” it largely depends on what you mean by “the system”. The IRC is the IRC, accounting principals are accounting principals. If the accounting works in a mannor that ends up with a company not paying large tax bills this year, then so be it. Financial and Taxable income will eventually catch up to each other for the most part, there are perm differences.

Simple timing of transactions, doing what you normally would a couple days early or later, can turn the tides as far as income owed. But this is just a defferal of tax, not an avoidance.

There are many reasons tax reform is fought against, and Jessie Ventura would have you believe the illuminatti gets together and they fight this as one unit to rule the world. When in fact it is more or less hundreds of special interest groups and donors looking out for their own slice of the pie.

Take for example Romney’s reluctance to say which deductions he would limit. You know why? Because once he did, whatever industry benefits from that deduction would give Obama money and fight against Romney.

“Gaming the system” is more a matter of navigation and self preservation, not some giant party were CEO’s laugh at you and me because they have the IRC super secret deductions handbook.

Dammit! I thought this was going to be useful thread and actually give some ideas about avoiding paying taxes and getting thrown in jail.

I would welcome those ideas rather than what the OP proposes.

[quote]H factor wrote:

[quote]usmccds423 wrote:

[quote]H factor wrote:

[quote]countingbeans wrote:

[quote]H factor wrote:
This really isn’t difficult:

I just picked a few from googling that took like 15 seconds. [/quote]

Well, bad laws are not loopholes, and half of what you copypasted has so little detail in it is propaganda at this point.

The last handful of quotes need to list why they got the refunds, etc. Otherwise it is rhetoric at best.[/quote]

Finding the specifics would take forever and would be almost impossible for a poster to do. Not to mention a lot of how people/companies get away with stuff is NOT by making it public and easy to find on a google search. I’m sure I could do it, but I’d rather you tell me why you DON’T have a problem with some of the stuff I posted instead of wanting me to find the specific reasons why it happens. [/quote]

Aren’t the specifics kind of important? I can say, “We need to cut cost.” That’s not exactly going to get the job done. [/quote]

Why you think me or any other poster is going to be able to do this is beyond me. If I was a master of the tax code and could figure out how so many companies get away with these type of refunds and what not I certainly wouldn’t be posting about it on T-Nation. I’d be rolling around in money (by helping these companies) and of course getting a much bigger refund than I normally do. It’s fine for you to ask the question, but expecting anyone to be able to tell you that happens to post in PWI is probably a stretch. [/quote]

I tend to disagree. You can take any public companies audited financial statements and compare them to the tax regulations. It’s all available online.

The entire point of this thread is to point out exactly what you are doing. You are just re-saying exactly what everyone else does. Loopholes exist and need to be closed. Great, what are they and what should we do about it.

I didn’t start the thread to having a pissing contest, but to have a conversation that puts us in the right direction. Something our elected officials have a hard time with.

As far as your examples go, I’d have to look at them, think about them, and probably do some research. I agree with Beans though. You can have a profit in 2012 and have loss carry forward from like 20 years in the past (I don’t remember off the top of my head how long a loss is carried forward.

Personally, I think people say tax loopholes, but really mean earnings management, which is a whole different issue.

[quote]LIFTICVSMAXIMVS wrote:
Dammit! I thought this was going to be useful thread and actually give some ideas about avoiding paying taxes and getting thrown in jail.

I would welcome those ideas rather than what the OP proposes.[/quote]

When in doubt remember tax avoidance isn’t the same as tax evasion. Ask Wesley Snipes!

@Counting Beans, during tax season how much correspondance occurs between Tax Lawyers and Accountants? Do tax lawyers have a decent background in accounting?

[quote]countingbeans wrote:There are many reasons tax reform is fought against, and Jessie Ventura would have you believe the illuminatti gets together and they fight this as one unit to rule the world. When in fact it is more or less hundreds of special interest groups and donors looking out for their own slice of the pie.

Take for example Romney’s reluctance to say which deductions he would limit. You know why? Because once he did, whatever industry benefits from that deduction would give Obama money and fight against Romney.

“Gaming the system” is more a matter of navigation and self preservation, not some giant party were CEO’s laugh at you and me because they have the IRC super secret deductions handbook. [/quote]

This is precisely the problem though (not the illuminatti lol). Because our tax system is so robust and complicated it is easy for tax avoidance or makes sense for companies to figure out ways to take advantage of this. I don’t have a problem with the companies doing it really, they are doing what is best for them. The problem is they hire lobbyists to make sure they can continue doing the things that already help them when it comes to taxes. We couldn’t do jack shit with financial reform even after the economy almost exploded. The lobbyists and special interests would have no part of it and fought tooth and nail against it.

Romney not being ABLE to say which deducations he would limit is precisely the problem. When companies pay big bucks to both sides so they have the influence to get what they want especially when it comes to taxes we have problems.

It’s very complexity is the reason for what I meant by gaming the system. Another example of government screwing up more and more what it trys to touch.

[quote]usmccds423 wrote:

[quote]LIFTICVSMAXIMVS wrote:
Dammit! I thought this was going to be useful thread and actually give some ideas about avoiding paying taxes and getting thrown in jail.

I would welcome those ideas rather than what the OP proposes.[/quote]

When in doubt remember tax avoidance isn’t the same as tax evasion. Ask Wesley Snipes![/quote]

Well for my purposes it shall be the exact same thing.

I want to evade, avoid, bypass, circumvent, dodge, etc. - whatever keeps my money in my wallet and out of the overlords’ hands.

[quote]H factor wrote:
This really isn’t difficult:

ExxonMobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
[/quote]

I’ll just pick this one out for now. According to the 2009 annual statements (pg 38) ExxonMobile had a tax liability of 15,119,000.00.

http://thomson.mobular.net/thomson/7/3095/4222/document_0/XOM_SAR09.pdf

The SEC 10-K agrees:

TAXES

   2009 

                  2008 

                                    2007 

(millions of dollars)
Income taxes
$ 15,119 $ 36,530 $ 29,864
Effective income tax rate
47 % 46 % 44 %
Sales-based taxes
25,936 34,508 31,728
All other taxes and duties
37,571 45,223 44,091


Total
$ 78,626 $ 116,261 $ 105,683

http://investing.businessweek.com/research/stocks/financials/drawFiling.asp?docKey=136-000119312510042929-1SJQE11241SPMEN8E3L5C894N1&docFormat=HTM&formType=10-K

And here is an article that gives some detail about where the $156 million rebate # comes from, which may or may not mean ExxonMobile received a rebate.

"For instance, the liberal Center for American Progress quoted Jeffers saying that the company’s tax figure for 2009 was heavily influenced by a holdover tax issue from 2008 that was technically recorded on its 2009 books. “ExxonMobil was required to bolster its pension plan by $3 billion when the market went down in 2008,” wrote CAP’s Sima J. Gandhi. “This overpayment reduced the amount of taxes owed in 2008, but the tax adjustment wasn’t made until one year later, which led to an overpayment and the refund in 2009.”

This is why the details are important.

[quote]LIFTICVSMAXIMVS wrote:

[quote]usmccds423 wrote:

[quote]LIFTICVSMAXIMVS wrote:
Dammit! I thought this was going to be useful thread and actually give some ideas about avoiding paying taxes and getting thrown in jail.

I would welcome those ideas rather than what the OP proposes.[/quote]

When in doubt remember tax avoidance isn’t the same as tax evasion. Ask Wesley Snipes![/quote]

Well for my purposes it shall be the exact same thing.

I want to evade, avoid, bypass, circumvent, dodge, etc. - whatever keeps my money in my wallet and out of the overlords’ hands.[/quote]

I’m assuming you’d like to enjoy that money so I’d work on the complying with the former rather than the latter.

[quote]usmccds423 wrote:

[quote]H factor wrote:
This really isn’t difficult:

ExxonMobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
[/quote]

I’ll just pick this one out for now. According to the 2009 annual statements (pg 38) ExxonMobile had a tax liability of 15,119,000.00.

http://thomson.mobular.net/thomson/7/3095/4222/document_0/XOM_SAR09.pdf

The SEC 10-K agrees:

TAXES

   2009 

                  2008 

                                    2007 

(millions of dollars)
Income taxes
$ 15,119 $ 36,530 $ 29,864
Effective income tax rate
47 % 46 % 44 %
Sales-based taxes
25,936 34,508 31,728
All other taxes and duties
37,571 45,223 44,091


Total
$ 78,626 $ 116,261 $ 105,683

http://investing.businessweek.com/research/stocks/financials/drawFiling.asp?docKey=136-000119312510042929-1SJQE11241SPMEN8E3L5C894N1&docFormat=HTM&formType=10-K

And here is an article that gives some detail about where the $156 million rebate # comes from, which may or may not mean ExxonMobile received a rebate.

"For instance, the liberal Center for American Progress quoted Jeffers saying that the company’s tax figure for 2009 was heavily influenced by a holdover tax issue from 2008 that was technically recorded on its 2009 books. “ExxonMobil was required to bolster its pension plan by $3 billion when the market went down in 2008,” wrote CAP’s Sima J. Gandhi. “This overpayment reduced the amount of taxes owed in 2008, but the tax adjustment wasn’t made until one year later, which led to an overpayment and the refund in 2009.”

This is why the details are important.
[/quote]

Maybe that one was incorrect but I’m not conceding the overall point. A robust and complicated tax code leaves room for a lot of fraud or tax avoidance. The bigger it becomes the more fraud and tax avoidance we get. More government isn’t the solution, less government is. Untangle the tax code and make it to where companies don’t have to spend so much time figuring out how to pay the minimal amount or paying in foreign governments.

[quote]nickj_777 wrote:
@Counting Beans, during tax season how much correspondance occurs between Tax Lawyers and Accountants? Do tax lawyers have a decent background in accounting? [/quote]

I would say the conversation is dependant upon the firms and companies involved.

Tax lawyers and CPA’s are different and have different goals.

[quote]H factor wrote:

[quote]countingbeans wrote:There are many reasons tax reform is fought against, and Jessie Ventura would have you believe the illuminatti gets together and they fight this as one unit to rule the world. When in fact it is more or less hundreds of special interest groups and donors looking out for their own slice of the pie.

Take for example Romney’s reluctance to say which deductions he would limit. You know why? Because once he did, whatever industry benefits from that deduction would give Obama money and fight against Romney.

“Gaming the system” is more a matter of navigation and self preservation, not some giant party were CEO’s laugh at you and me because they have the IRC super secret deductions handbook. [/quote]

This is precisely the problem though (not the illuminatti lol). Because our tax system is so robust and complicated it is easy for tax avoidance or makes sense for companies to figure out ways to take advantage of this. I don’t have a problem with the companies doing it really, they are doing what is best for them. The problem is they hire lobbyists to make sure they can continue doing the things that already help them when it comes to taxes. We couldn’t do jack shit with financial reform even after the economy almost exploded. The lobbyists and special interests would have no part of it and fought tooth and nail against it.

Romney not being ABLE to say which deducations he would limit is precisely the problem. When companies pay big bucks to both sides so they have the influence to get what they want especially when it comes to taxes we have problems.

It’s very complexity is the reason for what I meant by gaming the system. Another example of government screwing up more and more what it trys to touch. [/quote]

We agree on this point.

Seeing as I make good money in this sytem, I don’t want it changed. In fact I love the current conversations because it will only make the tax code worse, lol.

[quote]LIFTICVSMAXIMVS wrote:

[quote]usmccds423 wrote:

[quote]LIFTICVSMAXIMVS wrote:
Dammit! I thought this was going to be useful thread and actually give some ideas about avoiding paying taxes and getting thrown in jail.

I would welcome those ideas rather than what the OP proposes.[/quote]

When in doubt remember tax avoidance isn’t the same as tax evasion. Ask Wesley Snipes![/quote]

Well for my purposes it shall be the exact same thing.

I want to evade, avoid, bypass, circumvent, dodge, etc. - whatever keeps my money in my wallet and out of the overlords’ hands.[/quote]

There comes a time where the best you can hope for is pushing the bill forward into the future, and keeping your finger’s crossed that Obama isn’t relected, oops!

2012 is one of those rare times in life you will hear people recommend getting your income taxed now rather than later.

[quote]countingbeans wrote:

[quote]H factor wrote:

[quote]countingbeans wrote:There are many reasons tax reform is fought against, and Jessie Ventura would have you believe the illuminatti gets together and they fight this as one unit to rule the world. When in fact it is more or less hundreds of special interest groups and donors looking out for their own slice of the pie.

Take for example Romney’s reluctance to say which deductions he would limit. You know why? Because once he did, whatever industry benefits from that deduction would give Obama money and fight against Romney.

“Gaming the system” is more a matter of navigation and self preservation, not some giant party were CEO’s laugh at you and me because they have the IRC super secret deductions handbook. [/quote]

This is precisely the problem though (not the illuminatti lol). Because our tax system is so robust and complicated it is easy for tax avoidance or makes sense for companies to figure out ways to take advantage of this. I don’t have a problem with the companies doing it really, they are doing what is best for them. The problem is they hire lobbyists to make sure they can continue doing the things that already help them when it comes to taxes. We couldn’t do jack shit with financial reform even after the economy almost exploded. The lobbyists and special interests would have no part of it and fought tooth and nail against it.

Romney not being ABLE to say which deducations he would limit is precisely the problem. When companies pay big bucks to both sides so they have the influence to get what they want especially when it comes to taxes we have problems.

It’s very complexity is the reason for what I meant by gaming the system. Another example of government screwing up more and more what it trys to touch. [/quote]

We agree on this point.

Seeing as I make good money in this sytem, I don’t want it changed. In fact I love the current conversations because it will only make the tax code worse, lol. [/quote]

I don’t have a problem with people making good money, I’m all for it. I just don’t think we need a tax code that requires billions of hours to prepare for and manage. It’s wrought with waste of course as it comes from the government the pure haven of waste. Just out of curiosity if you’re making good money in the system why are you opposed to Obama being re-elected? Are you expecting a change in the code that keeps you from making good money?

[quote]H factor wrote:
Just out of curiosity if you’re making good money in the system why are you opposed to Obama being re-elected? Are you expecting a change in the code that keeps you from making good money?[/quote]

Well this question has many layers:

  1. As a capitalist I can’t support him
  2. With obamacare taxes and his fleece the rich plans it does two things:
    2a) it kills growth in an already stagnant economy. I’m at the point where I need to start bringing in business to the firm to make my run at partner. If no money is out moving around in the market (not just stocks, but in general) there are less companies starting and less opportunity for me to steal one away from a different firm. This sucks
    2b) the higher the tax bill, the less money the client has, so the more they will reject a fee increase, so my firm takes in less, my boss gets less, and my raise is less. This sucks
  3. obamacare will stop firms from growing past 50 employees (or hiring full time employees) that typically higher lower wage earners. This puts a drain on the economy as a whole, see 2a
  4. I’m a capitalist
  5. Romney wouldn’t have clean up a damn thing, but the markets would have had more confidence and started moving and healed in spite of the government. I’m not so sure under ultra-lefty control this will happen.

Oh I thought you made money off the tax code or something some way is what you were driving at and were fearful Obama might do something about the part that effects you. I thought it was something specific along those lines.

I don’t support Obama either, but I didn’t support Romney as I’m opposed to the two dominant voices in American politics.

[quote]H factor wrote:
Maybe that one was incorrect but I’m not conceding the overall point. A robust and complicated tax code leaves room for a lot of fraud or tax avoidance. The bigger it becomes the more fraud and tax avoidance we get. More government isn’t the solution, less government is. Untangle the tax code and make it to where companies don’t have to spend so much time figuring out how to pay the minimal amount or paying in foreign governments. [/quote]

I agree and I don’t want you to think I’m saying you are wrong. I agree that the tax code can be simplified. Complexity in and of itself doesn’t mean loopholes though. Do you think the goverment would allow loophole so that certain individuals/groups can pay less in taxes? I think no, the gov wants what they think is their money. Unless of course there’s really another underlying issue.

Another thing to consider is that the tax code is complext because well business is complex. That’s why people get an M.S. in tax.

[quote]usmccds423 wrote:

[quote]H factor wrote:
Maybe that one was incorrect but I’m not conceding the overall point. A robust and complicated tax code leaves room for a lot of fraud or tax avoidance. The bigger it becomes the more fraud and tax avoidance we get. More government isn’t the solution, less government is. Untangle the tax code and make it to where companies don’t have to spend so much time figuring out how to pay the minimal amount or paying in foreign governments. [/quote]

I agree and I don’t want you to think I’m saying you are wrong. I agree that the tax code can be simplified. Complexity in and of itself doesn’t mean loopholes though. Do you think the goverment would allow loophole so that certain individuals/groups can pay less in taxes? I think no, the gov wants what they think is their money. Unless of course there’s really another underlying issue.

Another thing to consider is that the tax code is complext because well business is complex. That’s why people get an M.S. in tax. [/quote]

I don’t think the government allows it per se, I think they attempt to make good law. They don’t though as any can come out flawed. These flaws become apparent in the form of loopholes or what I would consider bogus deductions. Big moneyed interests fight to keep those in the code or fight against the rewording. The people who COULD change this are in the back pockets of the people so they don’t. Again, read up on the fight against financial reform. See how hard big bank interests fought to change wording and directions.

I think you might get caught up on the loophole part. It isn’t always so much the getting out, as the avoidance (a lot of which is perfectly legal, but is setup in a flawed manner). I think both sides agree on this, they just might disagree on who benefits the most and who should. I also don’t see how Republicans can say they are for a free market, but want the government to give incentive to so much of this crap.

When the government gets more involved in the market it screws it up even more. This is the case time and time again. For instance it sounds good to support our farmers and most people would say the government should support our farmers. We can get on board with that right? Well that leads to big farm subsidies and things like the 1 billion in payments to over 100,000 dead people that came out a few years back.

Large code (or laws like Obamacare)= large room for fraud and waste.

[quote]H factor wrote:
Oh I thought you made money off the tax code or something some way is what you were driving at and were fearful Obama might do something about the part that effects you. I thought it was something specific along those lines.

[/quote]

Nope. I have full faith the tax code will grow ever more complex under any type of president that doesn’t outright declare himself a dictator. So I have faith people will always pay me to read the instructions and think creatively.

[quote]countingbeans wrote:

[quote]H factor wrote:
Oh I thought you made money off the tax code or something some way is what you were driving at and were fearful Obama might do something about the part that effects you. I thought it was something specific along those lines.

[/quote]

Nope. I have full faith the tax code will grow ever more complex under any type of president that doesn’t outright declare himself a dictator. So I have faith people will always pay me to read the instructions and think creatively.[/quote]

You’re an account? Would make the name make sense huh :slight_smile: