Tax-Exempt Firm Gets $600 Million Profit Flying First Class

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posted on Nov, 14 2012 @ 07:49 AM
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Okay, this shocks me AND makes me furious. Apparently it's as easy as signing a document to become a "non-profit" organization, which then exempts an organization from paying any taxes, even though they have apparently NO LIMITS on profits, or what they do with them.
www.bloomberg.com...

Here's the opening paragraph:

Since 1862, an obscure company called American Bureau of Shipping has been approving oceangoing vessels as seaworthy. The Houston-based firm reported $3.17 billion in revenue and just less than $600 million in profits from ship inspections from 2004 to 2010 and paid no U.S. income taxes on those earnings.

"Who?" one might ask.
But the list gets a lot less "Who?ish" as you read through it. But let's see "how?" the ABS is important:

ABS shows how an organization that isn’t a charity, a school, a religious institution, a hospital or any other kind of body that commonly has nonprofit status can earn millions of dollars and legally avoid paying U.S. taxes.


Now, we all know churches, social welfare agencies, and soup kitchens, and schools, for example are tax-exempt.
But get a load of this:

Some of the "non-profits" that might shock you:
The National Football League
The National Hockey League
The U.S. Polo Association (which modeled its line of fashion after the Ralph Lauren polo line of high-end clothing)

At a time when the U.S. is struggling with a gaping budget deficit, nonprofit companies such as ABS and the Polo Association operate large-scale, profit-making commercial enterprises tax-free.

“This showcases a massive problem of tax-exempt companies that walk, talk and quack like tax-paying businesses but benefit from very favorable treatment under the tax code,” says Dean Zerbe, a lawyer who was senior counsel and tax counsel for the Senate Finance Committee until 2010. “Taxpayers are subsidizing them. It’s wild.”

Anyone can start a nonprofit. It’s as simple as incorporating in any state and correctly filling out an IRS application. Once that’s done, a company is tax-exempt.

GOT THAT?? Taxpayers are subsidizing them --- DID YOU KNOW? I didn't know. And I'm as ticked off now with those firms as I am with banks and off-shore business owners. This is sickening. It expands the breadth of how we are so bamboozled and kept so close to barely scraping by. And SOMEBODY out there knows it's happening.


There are 1.63 million tax-exempt organizations in the U.S., according to the Urban Institute. Nonprofit charities reported revenue of $1.51 trillion in 2010 from donations, government grants and contracts. Zerbe says that the U.S. Treasury could collect tens of billions of dollars annually in taxes from nonprofits that make money essentially as for-profit companies.


This had BETTER show up on Capitol Hill during this asinine "fiscal cliff" debacle, or....or.......

Hell, I don't know. It'll just be more of the very creative accounting and cheating that's gone on since this country became affluent. Sickening.


ABS answers that question every year with the following phrase: “To promote the security of life & property on the seas.”
ABS’s headquarters occupies an entire eight-story office building on the north side of Houston. Its reception area displays scale models of a schooner, an oil tanker and an offshore oil-drilling ship.
The nonprofit company has earned hundreds of millions of dollars in profits in the past decade; lavished its executives with multimillion-dollar pay packages and perks; and purchased an offshore hedge fund, its IRS filings show.


I read the other day that the US is wanting "off-shore" havens to report accounts held by Americans, I hope they follow through with this. IF WE ARE HEADED for the NWO and global economy, there should be NO HAVENS where the wealthy can "hide" their hoards.

I had my own personal taste of non-profits after grad school, when I was hired on. I won't go into much detail here, but suffice to say the non-profit I worked for decided it was okay to siphon some of the money received for SPECIFIC programs off to pay for things like utilities, and to subsidize other programs that had their own grants.

Was anything done about it? I don't know. But if that piddly little non-profit got away with it, just imagine how many of these 1.63 MILLION "non-profits" are getting away with it, too, and imagine HOW NERVOUS they ought to be about being curtailed --- just as much as the ultra wealthy for-profit corporate CEOs and outsourcers.

It needs to STOP. Gha!!

What do you guys think?

(I did a search for the article, and saw nothing. I'm going to post now, but If someone while I was composing this beat me to it, thanks for pointing it out!)
edit on 14-11-2012 by wildtimes because: (no reason given)




posted on Nov, 14 2012 @ 07:55 AM
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Very interesting read. Thanks for sharing


I find myself thinking, What if these companies that are unjustly dodging taxes could be brought back under the fold of the IRS, perhaps the economic problem would not be as serious?

If enough of these companies were uncovered, I feel it could certainly elevate some pressure, though not fix it outright.



posted on Nov, 14 2012 @ 07:55 AM
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Now THERE'S an idea. If we don't want to "secede" (or can't), or "renounce our citizenship", we can each of us declare ourselves a non-profit....
(heaven knows my household isn't profiting!) Open as a private school or whatever. EVERYONE, every citizen could file non-profit status, and then no one would pay taxes at all!!

What oh what would Capitol Hill do then??

Mwahahahahhaaaaaa.
Yeah, it's really not funny. This crap needs to stop, at ALL LEVELS.



posted on Nov, 14 2012 @ 08:01 AM
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Yep. Lots of "non-profits" out there.
Lots of potential tax revenue.
Politicians won't go there because so many of them contribute to campaigns and have lobbies that are well funded.
They don't want people to know how much money supposed "legitimate" tax free organizations squander and shuffle to politicians as well as the less beneficial " charities."

It's all about the money and the politicians are the enablers.



posted on Nov, 14 2012 @ 08:02 AM
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reply to post by MDDoxs
 


If enough of these companies were uncovered, I feel it could certainly elevate some pressure, though not fix it outright.


Well, it most certainly would. It's kind of nice to know that "if we can't beat them, we CAN join them and become non-profits ourselves." Ha!!
Thanks for your interest. I was sitting with my jaw hanging open reading the article (even while knowing full well about places/orgs like the Vatican becoming filthy rich)!

Don't even get me started on the NFL, either. I think the players make WAAaaayyyy too much money. But this? Does this mean the players are tax-exempt as well? Good God, I hope not.



posted on Nov, 14 2012 @ 08:05 AM
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reply to post by badgerprints
 


Yep! And now, the cat's out of the bag. Hah!!
Thanks for posting. This revelation certainly did throw a curve in the trajectory of my understanding (but then, every day on ATS and the internet does that.)

Lobbying needs to be stopped altogether, as well as campaign donations. NOW. *sigh*



posted on Nov, 14 2012 @ 08:06 AM
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THe Church of "Above Top Secret" anyone?


I can think of some interesting members who could fit the required religious roles



Charitable and religious organizations

Many tax systems provide complete exemption from tax for recognized charitable organizations. Such organizations may include religious organizations (temples, mosques, churches, etc.), fraternal organizations (including social clubs), public charities (e.g., organizations serving homeless persons), or any of a broad variety of organizations considered to serve public purposes.

The U.S. system exempts from Federal and many state income taxes[5] the income of organizations that have qualified for such exemption. Qualification requires that the organization be created and operated for one of a long list of tax exempt purposes,[6] which includes more than 28 types of organizations and also requires, for most types of organizations, that the organization apply for tax exempt status with the Internal Revenue Service,[7] or be a religious or apostolic organization.[8][9] Note that the U.S. system does not distinguish between various kinds of tax exempt entities (such as educational versus charitable) for purposes of granting exemption, but does make such distinctions with respect to allowing a tax deduction for contributions.[10]

The UK generally exempts public charities from business rates, corporation tax, income tax, and certain other taxes.[11]


Wow 28 different types of organizations can be considered for tax excempt status


Here is a short description from Cornell for reference


(a) Exemption from taxation
An organization described in subsection (c) or (d) orsection 401(a) shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.

(b) Tax on unrelated business income and certain other activities
An organization exempt from taxation under subsection (a) shall be subject to tax to the extent provided in parts II, III, and VI of this subchapter, but (notwithstanding parts II, III, and VI of this subchapter) shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.

(c) List of exempt organizations
The following organizations are referred to in subsection (a):

(1)Any corporation organized under Act of Congress which is an instrumentality of the United States but only if such corporation—
(A)is exempt from Federal income taxes—
(i)under such Act as amended and supplemented before July 18, 1984, or

(ii)under this title without regard to any provision of law which is not contained in this title and which is not contained in a revenue Act, or



posted on Nov, 14 2012 @ 08:07 AM
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Originally posted by MDDoxs
unjustly dodging taxes


How do you define unjust?
"Unjust" implies a moral basis.
It's not about justice any more. It's about legality.
Politicians define legality now and they profit from all of this.
We can't go after the companies who are operating within the law.
We have to Go after the lawmakers.



posted on Nov, 14 2012 @ 08:14 AM
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reply to post by badgerprints
 


My apologies, I was at a lack of words. Please suggest an appropriate term and I will revise.

Undeserved? Unmerited?

Though it could be an issue of morality, as they are taking advantage of the system.



posted on Nov, 14 2012 @ 08:18 AM
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reply to post by MDDoxs
 


How about "unreal"?

It's unjust AND immoral AND unmerited AND unethical -- in my mind. And, dare I say, "unAmerican"? That would be a non-sequitor, though because money is the be-all and end-all of existence in the Western world's "business" climate. "Non-profit" by definition means there should be NO PROFIT.

Yeah, the lawmakers need to buckle down and get rid of all the loopholes.



posted on Nov, 14 2012 @ 08:42 AM
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reply to post by wildtimes
 


I'm not in the least bit surprised by any of this. The 'top tier' has been gaming the system since the get go and have the complete cooperation of politicians.

One clarification though, The U.S. Polo Association is NOT Ralph Lauren's fashion line. It's the sport of polo:

US Polo

Furthermore, political contributions --- like those made by 'non-profit' super-pacts --- are tax deductible. The IRS, however, is suggesting they are taxable gifts. Oh won't that PO the 1%:

political contributions and taxes
edit on 14-11-2012 by jtma508 because: add'l content



posted on Nov, 14 2012 @ 08:43 AM
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reply to post by wildtimes
 


F&S for the OP! I too am outraged.

Our laws are currently so slanted towards those with money that the rest of us don't stand a chance of ever pulling our heads above water, primarily because we're too busy paying the bills they leave behind. We're being fleeced and more often than not, at the hands of those who claim to have a monopoly on morality. Go figure!

On another note, as if tax-exempt cheats aren't enough to really piss you off, check out what they can legally do with their left over super PAC money; It's a clip from the Colbert Show from 11/12/12, (couldn't find it on youtube yet) and it will also blow you away.

www.colbertnation.com...



posted on Nov, 14 2012 @ 08:47 AM
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reply to post by Flatfish
 


I so wish Stephen Colbert was "into" being a politician. He'd fix things, and do it while everyone was smiling.

Thanks for the link.



posted on Nov, 14 2012 @ 08:49 AM
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reply to post by jtma508
 

Thanks, jtma, I edited the OP to reflect your correction of my misunderstanding.



Another such outfit is the U.S. Polo Association, which tells the IRS its tax-exempt status is allowed because its purpose is to govern the sport of polo in America.

In 1982, more than five years after clothing designer Ralph Lauren featured a player with a mallet on horseback for his Polo brand logo, the Polo Association began licensing its own line of merchandise -- with a similar image.

Today, the association’s brand, U.S. Polo Assn., has annual retail sales of $1 billion, placing it in the top 50 of all licensed brands. The association pays no income tax on its licensing income, its filings show.


Ah, thanks for making me read it again. Still, they make a similar FASHION LINE, with retail sales of $1 billion.
But, you're right. My vision was rather scarlet as I was reading the article.
Good catch!
edit on 14-11-2012 by wildtimes because: (no reason given)

Also, then, I guess all the "gear" that the NFL sells is tax-exempt? REALLY? I don't see how the NFL can by any stretch of the imagination be called a non-profit organization. But, I'm no tax attorney.
edit on 14-11-2012 by wildtimes because: (no reason given)
edit on 14-11-2012 by wildtimes because: (no reason given)



posted on Nov, 14 2012 @ 09:34 AM
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Okay, I just wrote to my Congressmen (both Republicans, although my county voted DEMOCRAT), and instructed them to look into this and to STOP IT, as well as to TAX off-shore accounts, and to CLOSE THE TAX LOOPHOLES.

I urge everyone to do so; this "fiscal cliff" can be scaled, but only if those with the resources pony up.
Ugghh..My congressman in the House has introduced a bill to cut Congressional salaries by 5%:

H.R. 4399: Congressional Salary Reduction Act
112th Congress, 2011–2012

To amend the Legislative Reorganization Act of 1946 to reduce the rates of pay of Members of Congress by 5 percent and eliminate future cost-of-living adjustments in such rates of pay.


Good. Now, get the cheating billionaires and ultra-profitable companies to pony up.



posted on Nov, 14 2012 @ 10:21 AM
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reply to post by wildtimes
 


I can't disagree with you on this one. It boggles the mind that the NFL (for example) is "non-profit" when professional sports is a HUGE industry. I also think it wrong when taxpayer dollars are used to build stadiums for teams. As a free market kind of guy, IMHO a company that cannot succeed on its own merits should not exist.



posted on Nov, 14 2012 @ 10:27 AM
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reply to post by NavyDoc
 



I can't disagree with you on this one.

Aww...sorry, Doc.


It boggles the mind that the NFL (for example) is "non-profit" when professional sports is a HUGE industry.

Yeppers, mind-boggling indeed.
Thanks for posting!



posted on Nov, 14 2012 @ 10:33 AM
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reply to post by wildtimes
 


The Republicans repeatedly sate that they will oppose all attempts at raising taxes (especially on the 'rich'). Instead they favor 'closing loopholes'. Let's see how long it is before they start talking about 'limiting' deductions for things like home mortgage interest and student loans. But the things you point outwill get conveniently 'overlooked'. You can take that to the bank.

And 'offshore' accounts?? Their only purpose is to avoid taxes. Why should that even be legal? If you or I got paid 'under the table' to avoid taxes we'd be prosecuted. But if you're wealthy you can park your money in The Caymans and that A.OK? WTF???



posted on Nov, 14 2012 @ 10:39 AM
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reply to post by jtma508
 



The Republicans repeatedly sate that they will oppose all attempts at raising taxes (especially on the 'rich'). Instead they favor 'closing loopholes'.

Yep! Seems to me, though, that off-shore accounts ARE loopholes. Close those loopholes, and the ones the "non-profits" use to hoard wealth, and we'd be okay. Close the loopholes on Capital Gains (Wall Street profits) -- they are INCOME.

I can see already though, they're not budging on compromising, any more than they were last time. Hopefully they'll lose their seats in Congress, but I doubt it.

WRITE TO YOUR REPS and SENATORS, EVERYONE!



posted on Nov, 14 2012 @ 10:47 AM
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Either the non-profits that are dancing merrily through the U.S tax code, need to be reeled in, or I need to be able to declare myself "non-profit"

Why should we pay more taxes when companies like ABS aren't paying their fair share?

The blame should not be on ABS or companies like them. The blame lies squarely on the suits in D.C. that continue to allow the door to be wide-open... It needs to be slammed shut.





 
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