"Bloomberg reported this year on one Marriott tax shelter, known as "Son of BOSS." It involved creating paper losses to offset taxes on real income. The Internal Revenue Service challenged the shelter, and Marriott lost in court. Judges called the shelter "fictitious" and a "scheme," and the company was forced to pay $29 million. Kleinbard notes that when the shelter was adopted, Romney was the chairman of Marriott's audit committee." http://www.npr.org/2012/07/19/157002254 ... ys-returns
Romney-isms: Fictitious Tax Shelters
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Romney-isms: Fictitious Tax Shelters
NPR Reports:
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_Bond James Bond
- _Emeritus
- Posts: 2690
- Joined: Thu Aug 14, 2008 10:21 pm
Re: Romney-isms: Fictitious Tax Shelters
grindael wrote:NPR Reports:"Bloomberg reported this year on one Marriott tax shelter, known as "Son of BOSS." It involved creating paper losses to offset taxes on real income. The Internal Revenue Service challenged the shelter, and Marriott lost in court. Judges called the shelter "fictitious" and a "scheme," and the company was forced to pay $29 million. Kleinbard notes that when the shelter was adopted, Romney was the chairman of Marriott's audit committee." http://www.npr.org/2012/07/19/157002254 ... ys-returns
Lol I just quoted this story on another thread.
Whatever appears to be against the Book of Mormon is going to be overturned at some time in the future. So we can be pretty open minded.-charity 3/7/07
MASH quotes
I peeked in the back [of the Bible] Frank, the Devil did it.
I avoid church religiously.
This isn't one of my sermons, I expect you to listen.
MASH quotes
I peeked in the back [of the Bible] Frank, the Devil did it.
I avoid church religiously.
This isn't one of my sermons, I expect you to listen.
-
_Jason Bourne
- _Emeritus
- Posts: 9207
- Joined: Sun Oct 29, 2006 8:00 pm
Re: Romney-isms: Fictitious Tax Shelters
Son of Boss was a very complex tax scheme that had it basis in case law. It was used to create a large loss using foreign currency exchanges and typically was used to offset a gain from the sale of a business. It was sold and promoted by many very reputable law firms and a few of the big four accounting firms. It was not a devious scheme because it did have its base in complex tax rules that would be tough for someone who does not do tax law all the time to understand.
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Re: Romney-isms: Fictitious Tax Shelters
So the judge that called it "fictitious" and a "scheme," didn't know what he was talking about? Why were they then forced to pay 29m? I'm sure they had plenty of money to hire a lawyer that could explain it all, didn't they?
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Re: Romney-isms: Fictitious Tax Shelters
And I'm not familiar with how the case worked, so I'm asking in sincerity.
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Re: Romney-isms: Fictitious Tax Shelters
Lol I just quoted this story on another thread.
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Re: Romney-isms: Fictitious Tax Shelters
I found this doing a little research..
MITT ROMNEY IMPLICATED IN SON-OF-BOSS TAX SCAM
Romney’s close personal and business relationship with the Marriott family goes back a long ways. Willard Mitt Romney was named after his father’s good friend, Marriott hotel magnate J. Willard Marriott. Romney has served on Marriott International Inc.’s Board of Directors for 11 of the past 16 years since 1993 and six times he served as chairman of its audit committee, placing him in charge of reviewing the company’s
financial reporting. As a director, he oversaw the company’s tax planning. According to a report by Bloomberg News, while serving as a director and chairman of the audit committee, Marriott engaged in what has become the most notorious tax shelter to date, the infamous “Son-of-Boss” tax ploy that generated $71 million in bogus tax deductions for the company. The Son-of-Boss ploy was presented by an investment banker to the tax department at Marriott in January, 1994. It involved generating a $71 million tax loss
through a series of phony transactions involving the sale of $81 million in mortgage notes through partnerships created solely for the purpose of executing the tax shelter.
IRS disallowed the loss and Marriott sued in the U.S. Court of Claims, which ruled in IRS’s favor., Marriott v U.S., 83 Fed Cl. 291 (2008). The company then appealed and the court of appeal sided with IRS, rejecting Marriott’s claim that the transaction was legitimate, Marriott v U.S., 586 F3d 962 (2009).
Given Romney’s background as chairman of Bain Capital, governor of Massachusetts and business experience with leverage buy-outs and hedge funds, it is not credible that he believed the tax shelter was legitimate. Under Romney’s watch, IRS disallowed the deductions and Marriott fought the case in court. The U.S. Department of Justice denounced the shelter as “fictitious,” “artificial,” “spectral,” an “illusion” and a “scheme.”
Note: Years later, the international accounting firm, KPMG, pled guilty to tax crimes in
association with the Son of Boss tax shelter and entered a deferred prosecution agreement with the government. Also, there have been criminal indictments of others
who aggressively promoted the scheme, although to date, none of the clients who
participated in the tax shelter, including Marriott, has been implicated in criminal activity
http://www.son-of-boss.com/SOB_Docs/Romney.pdf
http://www.son-of-boss.com/
MITT ROMNEY IMPLICATED IN SON-OF-BOSS TAX SCAM
Romney’s close personal and business relationship with the Marriott family goes back a long ways. Willard Mitt Romney was named after his father’s good friend, Marriott hotel magnate J. Willard Marriott. Romney has served on Marriott International Inc.’s Board of Directors for 11 of the past 16 years since 1993 and six times he served as chairman of its audit committee, placing him in charge of reviewing the company’s
financial reporting. As a director, he oversaw the company’s tax planning. According to a report by Bloomberg News, while serving as a director and chairman of the audit committee, Marriott engaged in what has become the most notorious tax shelter to date, the infamous “Son-of-Boss” tax ploy that generated $71 million in bogus tax deductions for the company. The Son-of-Boss ploy was presented by an investment banker to the tax department at Marriott in January, 1994. It involved generating a $71 million tax loss
through a series of phony transactions involving the sale of $81 million in mortgage notes through partnerships created solely for the purpose of executing the tax shelter.
IRS disallowed the loss and Marriott sued in the U.S. Court of Claims, which ruled in IRS’s favor., Marriott v U.S., 83 Fed Cl. 291 (2008). The company then appealed and the court of appeal sided with IRS, rejecting Marriott’s claim that the transaction was legitimate, Marriott v U.S., 586 F3d 962 (2009).
Given Romney’s background as chairman of Bain Capital, governor of Massachusetts and business experience with leverage buy-outs and hedge funds, it is not credible that he believed the tax shelter was legitimate. Under Romney’s watch, IRS disallowed the deductions and Marriott fought the case in court. The U.S. Department of Justice denounced the shelter as “fictitious,” “artificial,” “spectral,” an “illusion” and a “scheme.”
Note: Years later, the international accounting firm, KPMG, pled guilty to tax crimes in
association with the Son of Boss tax shelter and entered a deferred prosecution agreement with the government. Also, there have been criminal indictments of others
who aggressively promoted the scheme, although to date, none of the clients who
participated in the tax shelter, including Marriott, has been implicated in criminal activity
http://www.son-of-boss.com/SOB_Docs/Romney.pdf
http://www.son-of-boss.com/
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_Jason Bourne
- _Emeritus
- Posts: 9207
- Joined: Sun Oct 29, 2006 8:00 pm
Re: Romney-isms: Fictitious Tax Shelters
grindael wrote:So the judge that called it "fictitious" and a "scheme," didn't know what he was talking about? Why were they then forced to pay 29m? I'm sure they had plenty of money to hire a lawyer that could explain it all, didn't they?
Eventually the tax court ruled the son of boss illegal. But it went through a bunch of levels and took years to resolve. We almost looked at this for one of our clients but, to be honest, it did not smell right to us so we passed. But we had a big law firm promoting this to us and they were pretty smart folks. We read their position, could not poke holes in it but then ran it by another local attorney. He could not poke holes in it either but we all felt it was a bit too good to be true.
But my point was many smart and reputable professionals felt there was a strong position in tax law to do this. Believe it or not tax law has shades of grey. If you have a position and can base it in law at times it is worth the risk to take the chance and fight it out with IRS. That is how some tax law gets made and some gets overturned.
-
_grindael
- _Emeritus
- Posts: 6791
- Joined: Mon Aug 08, 2011 8:15 am
Re: Romney-isms: Fictitious Tax Shelters
Thanks Jason. Marriott has a lot of money. I'm sure they can hire the best lawyers. It doesn't look good that they lost the case.
Riding on a speeding train; trapped inside a revolving door;
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
Lost in the riddle of a quatrain; Stuck in an elevator between floors.
One focal point in a random world can change your direction:
One step where events converge may alter your perception.
-
_Jason Bourne
- _Emeritus
- Posts: 9207
- Joined: Sun Oct 29, 2006 8:00 pm
Re: Romney-isms: Fictitious Tax Shelters
grindael wrote:Thanks Jason. Marriott has a lot of money. I'm sure they can hire the best lawyers. It doesn't look good that they lost the case.
Well as I noted after all was said and done it was a bad position. I am so glad we passed on this for a client. We almost did it. But my poind it a lot of very bright people felt there was valid law to back up the position. The biggest problem I had with it was I felt it was too good to be true so to speak. But it was based in valid law until the tax court ruled otherwise. Such is the case with some complex areas of tax law. I blame that on our legislators more than anyone.