Bain Capital tax returns leaked and a Colorado law professor said Bain is breaking the law now New Y

It started with a leak of Bains tax returns. Gawker posted them online for any body to read. The leak most likely is coming from Jon Huntsman Sr and Robert C. Gay. Gay worked with Romney at Bain for 16 years befire joining Jon Huntsman to create Huntsman and Gay Global Capital. Jon Huntsman Sr has been a long time donator to Harry Reid. Harry Reid is the one who said Romney paid no taxes and he heard it from one of his donors.

Gawker Bain Files.
gawker.com...

Huntsman and Gay Global Capital
www.hgequity.com...

After the two leaks came out Bain Capital decided to buy into Huntsman Corp. Huntsman Corp is also owned by Jon Huntsman Sr. Bain bought into Huntsman Corp in 2001 for 600 million dollars. I wonder how much they buy into it this time? How much can you spend on a company and only be buying into it with out buying up the whole thing? Or is this just a buy off to make him stop attacking Bain and Romney. Jon Huntsman Sr is the father of Jon Huntsman Jr the presidential candidate.

Bain buys into Huntsman Corp in 2001.
www.deseretnews.com...

Well if Bain is buying into Huntsman Corp again to stop the attacks he might be to late. Seems a law professor from Colorado decided to look through those tax returns and said they are doing things that are illegal. When I seen this I figured it would be skipped over and nothing would ever come from it. But it seems it caught the eye of the New York Attorney General who is sending subpoenas to Bain and others to look into the tax avoidance scams to build a investigation to recover the taxes they owe.

Law Professor Says One Of Romney's Tax-Avoidance Schemes Is Illegal
www.businessinsider.com...

Inquiry on Tax Strategy Adds to Scrutiny of Finance Firms
www.nytimes.com...

So I wonder if this is going to grow into something more? Will these companies quietly pay large fines to keep it quiet? Or will this bring down Bain and possible Romney?

Sounds like the ACORN attack from Republicans in 2008, only the inverse this time around. Looks like Romney will win this time around.

reply to post by RELDDIR


I don't know what Acorn has to do with anything? This seems to be a attack from Romney's own cousin Jon Huntsman Sr. Yes they are cousins. Parley Parker Pratt, Sr. was the great grand father of Romney and Jon Huntsman Sr. not to be confused with Jon Huntsman Jr the presidential candidate. And the infighting between cousins seems to have brought out the investigation.

www.nytimes.com...

The New York attorney general is investigating whether some of the nation’s biggest private equity firms have abused a tax strategy in order to slice hundreds of millions of dollars from their tax bills, according to executives with direct knowledge of the inquiry. Enlarge This Image Andrew Harrer/Bloomberg News The Washington office of the Carlyle Group, which The Carlyle Group has stated in regulatory filings that their partners have not diverted management fees into investments in their funds. Enlarge This Image Evan McGlinn for The New York Times Bain offices in Boston. According to financial statements, Bain partners saved more than $200 million in federal income taxes and more than $20 million in Medicare taxes. The attorney general, Eric T. Schneiderman, has in recent weeks subpoenaed more than a dozen firms seeking documents that would reveal whether they converted certain management fees collected from their investors into fund investments, which are taxed at a far lower rate than ordinary income. Among the firms to receive subpoenas are Kohlberg Kravis Roberts & Company, TPG Capital, Sun Capital Partners, Apollo Global Management, Silver Lake Partners and Bain Capital, which was founded by Mitt Romney, the Republican nominee for president. Representatives for the firms declined to comment on the inquiry.

I thought you had something there for a while. I was intrigued by the link saying it was "illegal." You learn two things at that link. One it was a Bain strategy, and two :

To be fair, it appears that, legally, this particular tax-avoidance scheme is still in the "not yet settled" phase as opposed to the "established law" phase. At some point, if the IRS concludes that the capital gains treatment is bogus, it will likely challenge it in court. And Bain and other private-equity firms will defend it.

Read more: www.businessinsider.com...

So what we've got is a misleadingly dramatic headline backed up by the idea that if rich guys can reduce their taxes it must be criminal. Sigh. I want something dramatic, not "some day it may be challenged in court."

But this would not be the first time that Romney has been involved in tax scams that got somebody else in trouble when he showed others how to do it. For another example you have to go back to his Utah Olympics days. See he got into it with the Utah governor about who got to control and spend the money for the Olympics. Romney decided it was his and only his. Nobody else could say anything or do anything to stop his power grab for all the money. But he did let the Utah Governor in on his tax scams and charity scams. Mike Leavitt got busted by Congress and had laws passed to stop his scams.

en.wikipedia.org...

Leavitt FoundationLeavitt's family charitable foundation, the Dixie and Anne Leavitt Foundation, was established by the Leavitt family in 2000, and the family has donated nearly $9 million of assets to it since. It has provided them with tax write-offs for the donated assets. About a third of the foundation's assets have been loaned back to family businesses, such as a $332,000 loan to Leavitt Land and Investment Inc., in which Mike Leavitt has a substantial interest. According to a 2006 National Public Radio report, these loans were legal because they were made at market rates.[5] A month following the NPR report, Congress made such transactions illegal. The same NPR report also revealed that nearly $500,000 in charitable contributions provided to the Southern Utah Foundation were used for housing scholarships to Southern Utah University. The scholarships were subsequently used to place students in the Cedar Development Co., a Leavitt family business, with the money used to pay the students' rent. NPR's investigation found that the arrangement was legal and that the Leavitts did not profit from the arrangement. Although legal, the procedure, called "round-tripping" in philanthropic circles, has garnered criticism as lacking in the spirit of philanthropy.[5] The report also stated that Mike Leavitt was not directly involved in the foundation's operations. Total charitable grants from the foundation during its first six years were $1,468,055. The foundation's principal beneficiaries have been Southern Utah University and The Church of Jesus Christ of Latter-day Saints. Other beneficiaries have included arts, educational and humanitarian organizations, including the Leavitt family genealogical society.

reply to post by charles1952


The part whee they do not pay taxes on the Management fees before they invest it is illegal. They did not pay any taxes on that money before doing it. That is what New York Attorney General is going after.

Legal experts continue to crawl through the massive cache of Mitt Romney's Bain fund documents that Gawker published on Thursday.

And one law professor, Victor Fleischer of the University of Colorado, believes he has found a tax-avoidance trick used by the funds that is illegal.

As expected, the Bain funds appear to have employed pretty much every sophisticated tax-dodging scheme in the book, including:

• creating "blocker" corporations that allow the funds to avoid business taxes,
  
• entering into credit-default swaps that allow the funds to avoid dividend taxes, and, of course,
  
• taking advantage of the ludicrous "carried interest" tax loophole that allows private-equity and hedge-fund managers to treat their performance fees as capital gains instead of ordinary income and thus pay a tiny fraction of the taxes on them that normal professionals would pay.

(from: Law Professor Says One Of Romney's Tax-Avoidance Schemes Is Illegal)

It's a complex subject and requires some time to digest, but experts are beginning to weigh in on the Romney tax schemes and the consensus is starting to emerge, that Romney DODGED taxes, in some cases using now-illegal schemes like "Son of BOSS", etc.

The problem Romney has with the management fees is due to it being a fee for working. As a owner of a Corporation you can collect all the profit from owning it as dividends but you are not allowed to work at the corporation in any manner. You can't make phone calls have a desk or have any input of any kind. As soon as you make phone calls have a desk and work at the corporation you must be put on the payroll legally as a employee. This does not have to be a large amount. 10 dollars an hour or a weekly amount. All the other money you make can be dividends. The hourly weekly pay is taxed.

it seems Romney never collected that money and it would be fine not to but it can never change from the amount made. And when it is collected the taxes are due. But Romney did not just leave it in there. He moved it. He moved it into the investment category and started collecting interest on the money. So legally he should have paid taxes on it the day he moved it from pay check to investment. Its not a loophole. The laws are on the books for it.

OK, help me out, I just checked The New York Times article in the OP. It said:

The tax strategy — which is viewed as perfectly legal by some tax experts, aggressive by others and potentially illegal by some — came to light last month when hundreds of pages of Bain’s internal financial documents were made available online. The financial statements show that at least $1 billion in accumulated fees that otherwise would have been taxed as ordinary income for Bain executives had been converted into investments producing capital gains, which are subject to a federal tax of 15 percent, versus a top rate of 35 percent for ordinary income.

Isn't there anything in the OP that says it's illegal? Is the best we can do is that "some" think it's "potentially illegal?"

Originally posted by Blackmarketeer
in some cases using now-illegal schemes like "Son of BOSS", etc.

Which means it was legal when it was used, and nothing illegal was done. Want to know what IS illegal? When you loan your friend $10 and he pays you back $15 and you dont claim that $5 profit. It's funny how when rich guys work the system using LEGAL methods we crucify them, yet the average guy is constantly doing illegal things and no one cares about that.

Do I think this loopholes should be closed? Yes. Can we demonize those using them, I'm not so sure. How do you compete without using them when your competitor does? I would rather see them closed, as long as they are legal and someone is using them, then everyone has to. I don't like it, but cut through the rhetoric and what we have is a man who is brilliant, knows the system, and is a genius with money.

Or do you want the guy creating the largest debt in US history.

www.irs.gov...&-Self-Employed/Paying-Yourself

Corporate officers An officer of a corporation is generally an employee, but an officer who performs no services or only minor services, and who neither receives nor is entitled to receive any pay, is not considered an employee. Refer to "Who Are Employees?" in Publication 15-A, Employer's Supplemental Tax Guide (PDF). Partners

Treating employees as nonemployees You will be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold them because you treat an employee as a nonemployee, including yourself if you are a corporate officer, and you may be liable for a trust fund recovery penalty. Refer to Publication 15, Circular E, Employer's Tax Guide for details about the trust fund recovery penalty or Independent Contractor for more information on employee classification.

Shareholder loan or officer's compensation? A loan by a corporation to a corporate officer should include the characteristics of a loan made at arm's length. That is, there should be a contract with a stated interest rate, a specified length of time for repayment, and a consequence for failure to repay the loan. Collateral would also be an indication of a loan. A below-market loan is a loan which provides for no interest or interest at a rate below the federal rate that applies. If a corporation issues you, as a shareholder or an employee, a below-market loan, the lender's payment to the borrower is treated as a gift, dividend, contribution to capital, payment of wages, or other payment, depending on the substance of the transaction. See "Below-market interest rate loans" under Employees' Pay / Kinds of Pay / Loans or Advances in Publication 535, Business Expenses for more information.

Reasonable compensation Because an officer of a corporation is generally an employee with wages subject to withholding, corporate officers may question what is considered reasonable compensation for the efforts they contribute to conducting their trade or business. Wages paid to you as an officer of a corporation should generally be commensurate with your duties. Refer to "Employee's Pay, Tests for Deducting Pay" in Publication 535, Business Expenses for more information. Public libraries may have reference sources that provide averages of compensation paid for various types of services. The Internal Revenue Service may determine that adjustments must be made to the income and expenses of tax returns for both the corporation and an individual shareholder if the officer is substantially underpaid for services provided.

Its basic facts what he did was illegal. And one thing about this if he tries to say he was not given any pay as a employee who worked for the company. It would mean he illegally used employee benefits namely his retirement plans, Health insurance plans and so on. A employer is not allowed to use employee benefits. A employer/employee is allowed. One thing the IRS has all ways had is note that says if you do any work for the corporation that is in the standard business practice you are considered a employee no matter if your the owner or a executive. The day he transferred funds from the account as management fees for being a manager and being compensated to himself and back into the company as a investor he was supposed to pay taxes on it as a employee. He failed to do it and broke the tax laws. The paper work for this transaction was left off his tax returns and it should not have been. Leaving something off your tax returns does not mean you legally don't have to pay or no one would file a tax return in the first place.

this just in, corporations don't pay taxes, big news nowhere. far worse law's being broken is letting them get away with it and also aiding and abetting by our elected officials. wont change until we find good people and adjust our present system so this doesn't happen any longer.

reply to post by JBA2848

I'm just expressing my confusion here. If

Its basic facts what he did was illegal.

Then why aren't the articles in the OP saying that? All they say is that someday it may be found to be illegal. If it's so basic, I'd think they'd be pointing it out.

Originally posted by charles1952
reply to post by JBA2848

 

I'm just expressing my confusion here. If

Its basic facts what he did was illegal.

Then why aren't the articles in the OP saying that? All they say is that someday it may be found to be illegal. If it's so basic, I'd think they'd be pointing it out.

He's clearly a Romney hater. Most likely a Paulite or Democrat. That means facts are irrelevant.

reply to post by charles1952


They don't do investigations for some thing that is not illegal. So why do a investigation? Because what the private equity companies are doing is illegal. They say its estimated Bain Capital itself is on the line for around 220 million dollars. And the IRS will only audit a max of 3 years. About 75 million dollars a year scam they are running.

First question, are these documents even authentic? Secondly, are they complete, thirdly from what I know most of Romney's assets are in a blind trust (if this is the case) its gonna be hard to hold Mitt Romney culpable if these are from his blind trust.

Originally posted by JBA2848
reply to post by charles1952

 

They don't do investigations for some thing that is not illegal. So why do a investigation? Because what the private equity companies are doing is illegal. They say its estimated Bain Capital itself is on the line for around 220 million dollars. And the IRS will only audit a max of 3 years. About 75 million dollars a year scam they are running.

Romney left in 1999.

IRS will only audit 3 years.

These audits are for Tax returns starting in 2009 at the earliest.

What does this have to do with Romney again?

reply to post by JBA2848

Dear JBA2848,

Thanks for the response. I wholeheartedly agree with you that anything illegal should be punished.

So why do a investigation? Because what the private equity companies are doing is illegal.

I may very well agree with you that what they're doing is sneaky or offensive. But you've gone way ahead of me. Where does it say that it is clearly illegal? I didn't find it in the OP's links, and I haven't seen it posted. Wouldn't it be fair to wait on calling something illegal until we know that it is?

With respect,
Charles1952

Originally posted by JBA2848
reply to post by charles1952

 

They don't do investigations for some thing that is not illegal. So why do a investigation?

Silly me, I thought the investigation was done to gather evidence. Now I'm trying to figure out why we have a court system, since I now know guilt is applied once an investigation begins. Looks like we found a way to cut the budget!