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 Posté le: Mer Sep 25, 2013 10:24 am Sujet du message: BB&T's $688 Million Court Loss Shows the Evil |
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{ BB&T's $688 Million Court Loss Shows the Evil of the Tax Law},[url=http://www.moncler-jacket.net]moncler down jackets[/url]
The U.S. Court of Federal Claims ruled that BB&T cannot get a refund of some $688 million because the basis for the refund claim by BB&T was determined to be a tax shelter. The elaborate complexity of the transaction, while arguably technically correct, was needed to cope with the byzantine tax code sections involved. The court decided that when all is said and done, all BB&T did was to try and save on taxes. These days just trying to save some cash flow from getting lost to federal income tax is verboten. As tax shelters go, the BB&T transactions are impressive in size, scope and intricacy. The amount of sheer intellectual effort that went into its creation, implementation and defense is almost unimaginable.Starting with establishing a trust with $6 billion in revenue-producing assets, including a loan from Barclays Bank, the professionals involved in this endeavor were an all-star cast. KPMG,[url=http://www.moncler-jacket.net]discount moncler jackets[/url], one of the Big Four global accounting firms,[url=http://www.moncler-jacket.net]moncler down jackets[/url],[url=http://www.moncler-jacket.net]womens moncler down coat[/url], worked with Barclays to come up with the transaction structure that it seems more than matched the U.S. income tax law in complexity. The Sidley Austin Brown & Wood law firm acted as the tax counsel for the transaction,[url=http://development.compuphonic.co.uk/index.php?do=/user/login/]Women go into menopause because men want younger mates[/url], as they had for Ernst & Young, Arthur Anderson and BDO Sideman. The U.K law firm of Freshfields, Bruckhaus, Deringer advised Barclays.Barclays wasn't the only bank dong these intricate tax-structured deals. The Court mentioned in its opinion that First Union,[url=http://www.moncler-jacket.net]womens moncler down coat[/url], Bank of America, Wells Fargo and Sovereign Bank had also been participants in tax minimization arrangements.The end goal of the BB&T configuration was to arbitrage between the U.K. and U.S. income tax systems in order to generate foreign tax credits for BB&T and thereby reduce its U.S. tax liability. BB&T must have thought that tax reduction, and saving the cash flow that would result, was important to their business. The Court also noted that they were enmeshed in a whole series of tax minimization configurations with such names as LILO, SILO, OTHELLO and Project Knight. The Court said that one of the United States' experts, Michael Cragg, aptly stated that "enormous ingenuity was focused on reducing U.S. tax revenues." The Court shared Cragg's view that "[t]he human effort, the amount of creativity and overall effort that was put into this transaction ... is a waste of human potential." There are enormous numbers of the tax professionals in the United States and elsewhere who are joyful at seeing this decision. I guess for many it validates, in their minds, their participation in the income tax system. For others it is a moment of schadenfreude. There is no lack of supporters for the views expressed by the Court in this case among the tax bar,[url=http://www.museyon.com/forum/viewtopic.php?f=2&t=774678]Chelsea gets back on track[/url], CPA societies,[url=http://www.moncler-jacket.net]moncler outlet[/url], law school professors, news reporters and blog pundits who find the concept of merely reducing tax to be unconnected to the business realities of the desirability positive cash flow. The Court concluded that BB&T was involved in an "economically meaningless tax shelter." I can just hear the applause.But does this decision really make any sense?Doesn't it tell us more about the income tax system of the United States than it does about BB&T or any taxpayer for that matter?Is it taxpayers who try and avoid tax who should be condemned or is it the tax system that has been foisted on America by a dysfunctional and delusional class of political mandarins occupying Washington?Every individual, household and commercial enterprise requires a positive cash flow. For all, tax is the single largest dominant deduction from cash flow. Even welfare recipients pay,[url=http://www.moncler-jacket.net]moncler on sale[/url],[url=http://www.breastfeeding.com/social/public/user/kcndk4567/blogs]Need for more routes to teach Engl[/url], at the least, sales tax. Does anyone think that the officers and directors of BB&T woke up one morning and said to themselves that if they do not engage in some convoluted tax shelter involving a tortuous series of transactions involving millions of dollars in fees and enormous risks of governmental prosecution that business would not be able to survive another day?I do not think the government should be criticized for bringing cases against what they perceive to be so-called tax shelters. I also do not think that anybody trying to reduce their loss of cash flow to tax should be denounced.However, I do think that the BB&T scheme best proves that the consequences of having an income tax system is a massive and lamentable loss to our economy of the fruits of the beneficial productivity from some of America's most created and ingenuous minds. That waste is just evil. © 2013 Moneynews. All rights reserved. More ways to share... 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