• 07 Jun 2007 at 3:18 PM
  • IBM

Tax Man Wipes Out Killer Bees

killerbtaxesibm.jpgSo the Internal Revenue Service has shut down the Killer B, the tax shelter that has helped fuel the stock buyback programs of many companies with foreign earnings, proving once again that the first rule of Tax Shelter Club is “Do Not Talk About Tax Shelter Club.”
The Killer B, named for a provision of the tax code governing certain corporate reorganizations, was a tax-shelter scheme that was well-known among lawyers and corporate accountants. It’s use was thought to be fairly common among corporations with substantial foreign earnings. Essentially, companies employed it as a way of repatriating foreign profits for the benefit of shareholder without getting hit by US corporate taxes. Surprisingly, however, the Internal Revenue Service seems only to have learned of it when IBM publicly disclosed that it had employed the shelter in connection with a recent stock repurchase. And once it got word of the Killer B, the IRS acted quickly to shut it down.
[After the jump: How the Cold War gave birth to the Killer B.]

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  • 25 Apr 2007 at 11:15 AM
  • IRS

Deduct Common Sense

irs logo.jpg The 10 craziest tax deductions, according to Kiplinger:
1. Pet food for wild cats – if cats make your workplace safer, by eating snakes and rodents (Citi, per our reader survey, is immediately investing in these)
2. Moving your pet – the same as moving anything else when deducting moving expenses after an occupational switch
3. Business convention in Bermuda – you don’t even have to justify why your convention was in Bermuda, or why your boss is now orange
4. Body oil – if you can prove that it’s a business expense (in the same way astroglide makes banking easier?)
5. Private airplane – if you’re using it for various business purposes or can somehow prove that you live in the boonies and that there are no better commercial options (we hope MGM got to deduct the millions it spent on Soul Plane)
6. Babysitting fees – if you’re doing something charitable while your kids are with the sitter, like having a dinner where you actually have to talk to spouse 1.0 (the harpy) or spouse 2.0 (the much younger model who thinks she can talk to cats)
7. A boob job – again, if it’s for business (that analyst to associate promotion doesn’t hinge on your modeling skills)
8. Landscaping – if you meet people at your home and everyone does their business in your yard (hey, if that’s your thing…)
9. Free beer – if it’s part of a promotion for your business
10. Swimming pool – if you “require” it for medical purposes, you can deduct it as a medical expense
The lesson – when spending money on something frivolous, make sure you can justify it as a BUSINESS expense. Anyone deduct anything crazy this year (we promise the IRS doesn’t read this site)? By the way, the picture is of the IRS logo. The IRS, masters of image and branding, sporting the patriotic flying nutsac on a rope, buttressed by garland.
10 Craziest Tax Deductions – [Kiplinger, via AOL Money & Finance]

  • 20 Oct 2006 at 3:20 PM
  • IRS

NFW! Wesley Snipes Is In Kobi Alexander Land!

wesleysnipes.jpgDealBreaker might need to set up a Namibian branch office if things keep up like this.
Today Reuters reported that Wesley Snipes—indicted earlier this week for tax fraud—is in Namibia. You remember that place right? It’s the semi-desert African country where Kobi Alexander was discovered, arrested and eventually bailed out of jail to await his extradition treaty.
Can this really be happening? Why Namibia (a country we only really had heard of as the place where Angelina Jolie and Brad Pitt went to hatch their offspring)? At first blush, Namibia seems like a good place to flee. It doesn’t have an extradition treaty with the US, it’s got some fancy resorts and sports lots of European and Israeli ex-pats to pal around with.
Unfortunately for the fugitive types, its also got a government eager to keep the US happy. After Kobi Alexander was discovered there, the country quickly passed a law permitting extradition of alleged criminals wanted in the US.
So why did Snipes stick around when it became apparent that Namibia probably wouldn’t shield him from the long arm of US law enforcement? Well, it seems that he’s not there hiding out at all. He’s filming a movie!

“It is confirmed. He is definitely here,” Edwin Kanguatjivi, chief executive officer of the Namibia Film Commission, said by telephone. “He has been in Namibia since the end of August.”
Snipes, the star of the “Blade” movie series, is the lead actor in a new movie entitled “Gallowwalker” filming in the Namibian desert near the town of Swakopmund — the same coastal resort where Hollywood superstars Angelina Jolie and Brad Pitt had their first child in May.

We’re not sure this is entirely plausible. So Snipes just happened to be hanging out in a country with no extradition treaty when his indictment came down? A little convenient, no?
“It will be interesting to see whether he waives extradition proceedings or fights it. That may hint at whether he was there as a fugitive or there for other reasons,” we were told by DealBreaker’s favorite extradition law expert, Douglas McNabb of McNabb Associates.
Indicted U.S. actor Snipes in Namibia: officials
[Reuters via the Ka-Ching! blog]