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IRS Cuts Deals
The other day the IRS announced new rules for settling tax liabilities for individuals. It’s a sweet deal. I thought that was interesting. Then yesterday we get an announcement from Altria (MO) that they too have cut a deal with the boys at the IRS. Coincidence? Leading indicator? Some details:
Individuals - The IRS spells out the new terms for individuals who are delinquent here.
Summary: When the IRS calculates a taxpayer’s reasonable collection potential, it will now look at only one year of future income for offers paid in five or fewer months, down from four years, and two years of future income for offers paid in six to 24 months, down from five years. In addition, equity in income producing assets generally will not be included in the calculation of reasonable collection potential for on-going businesses.
The basis of settlement is now 25 cents on the dollar. (a percentage of 1 year of income vs. 4) if payment is made in less than five months. The IRS has provided a big incentive to settle fast.
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Altria
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If you look at the headline you would think that poor old MO took it in the ear on this one. $500m is big bucks for anyone, especially if it is paid to the IRS. But actually this is “good news” for the company.
Altria got nailed by the IRS as a result of aggressive tax accounting on leveraged leases it owned. The potential loss could have been $1b. Last year MO took a charge of $627m to cover the cost of a settlement. The deal it cut with the IRS is well under budget. MO will end up with a gain of 3 cents ($61m) a share as a result of the settlement. The difference between last year's charge and the amount paid to the IRS is $127m. The net gain to the shareholders of only $61m means that the litigation expense was a cool $66 mil.
I’m thinking that the lawyers and the MO top brass are drinking expensive champagne and smoking Luckies with this result. I have a few questions:
- The IRS is Treasury and Treasury is the White House. The change in policy on cutting deals comes from the WH. Why? The fact that the new rules are geared to cash settlements in less than five months is curious. The election is in five and a half months. Are these guys trying to rig numbers to show some improvement on the tax receipt line? I wouldn’t put it past them.
- What’s the message here? Don’t pay your taxes and later cut a deal for 25 cents on the dollar? I’m no fan of taxes, but I, and most other folks, pay 100%. I wonder if the precedent being set by the IRS won’t undermine its ability to collect that 100%.
A thought:
If you believe that this WH is willing to cut tax deals to raise much needed cash, then you're apt to believe that there is plan for a tax holiday on corporate foreign income. There is a about $1 trillion of untaxed earnings sitting outside the US currently. The tax on this would come to about $200 billion. Look for a proposal from the WH to give US multinationals corporations another tax break. They would pay $100b and keep the other $100b. More champagne and smokes…
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FYI, the U.S. actually takes in just over 1 trillion. The fucking interest on the debt alone is right at 500 billion. Where is all that money going, and to whom? If the Federal reserve is not a fucking criminal organization, then why can't the American taxpayer get a full audit? End the fucking fed, cut 500 billion in spending immediately. DUH
FYI, if the budget already has $500 billion in built in expenses through social security medicare promised to the American people and the very last thing politicians want to cut to stay in power. I think it is safe to say you have 500B in revenue with your 1 trillion in revenue. BTW, even you are wrong by your assesment. I was just simplifying thngs. Revenue is actually much higher with a multi trillion dollar economy (4-5 trillion) DUH
"Where is all that money going, and to whom?" Don Rothschild the head of the family of course. When ever a crime is committed follow the MONEY. It always ends at the IBS.
One bunker buster bomb at the IBS and the world will change for the better. No need to arrest the terrorists we do it to muslims we can do it too financial terrorist jews also.
Not if you drop it on a Saturday, no one would be there!
See easy as pie, Rothschild probably have their own synagogue, we have no quilt bombing a mosque full of terrorists we should have no issues with a criminal synagogue full of monopolistic criminal Banksters.
http://worldnews.msnbc.msn.com/_news/2012/05/23/11839215-pakistan-offici...
Religion and Nationality are not the criminals just the individuals that hide behind it in the name of their own preservation.
Go to hell, you bigot. If you have a problem with the political or banking system, fine, but keep your racial epithets to your ignorant self.
You're the bigot. I am an Italian American,(you know the other CRIMINAL mafia we always hear are such bad people). I'm talking about criminals, and terrorists. I'm just trying to distinguish between the perceived threat and reality. I don't want people,you being one of them to let the anti-Semite cry to get in the way of the criminals getting what they deserve. Or maybe we should let them continue to con us, all of us, the whole Fuckin planet!
Does this conclusion really surprise anyone?
The Temple shall remain.
Perhaps the IRS/Treasury/WH also offers a little quid pro quo with the settlements?
Shucks, I thought the deal was that the IRS was going to stop masquerading as a federal agency.
I do not like MIS or DISINFO on ZH, so I am going to correct you. IRS IS NOT THE TREASURY.
The IRS is NO MORE FEDERAL agency than the FEDERAL RESERVE BANK or FED EX. The only difference is they have guns!
Diversified Metals vs Steve Morgan, Irs, TBOW TRUST.
US TRIAL ATTY "DENIES THAT THE INTERNAL REVENUE SERVICE IS AN AGENCY FOR THE UNITED STATES GOVERNMENT"
There fixed it for ya.
It is not about money for the IRS, it is about power of INFORMATION. CONTROL, via fear, intimidation and if you want further proof? Go into the fictitious TAX COURT, GUILTY until proven innocent. Ya, I don't remember that being part of judicial process.
Innocent until proven guilty, BEYOND reasonable doubt.
Tax Court is not an article 3 court.
LOL my Down vote is the number of Gov't agents who don't like my statement;) FOOK U 2
Bingo. Once you realize the fraud reserve and IRS are the same collusive racket it will make your blood boil.
TAX AND INFLATE, TAX AND INFLATE.
Put that in your pipe and smoke it.
IRS sole mission is to strip mine your finances.
CONCLUSION: NEVER PAY YOUR TAXES SO YOU CAN NEGOTIATE THEM AT A LATER DATE FOR PENNIES ON THE $.
... with no plan of any sort for remediation after the strip mining is finished.
Then they taxed my slag heap!