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I don't know how the math works out, but where is the non-profit charity revolving door. You found a non-profit to help poor downtrodden folk, set yourself up

by phlux 16y ago

I don't know how the math works out, but where is the non-profit charity revolving door. You found a non-profit to help poor downtrodden folk, set yourself up as a principle. Give yourself an incredible services fee for managing the non-profit. Donate to your rich friends non-profits at glamorous charity events where you get treated like royalty. Write off those expenses. Get your friends to donate to your charity via the extravagant gala fund-raiser with the mayor and everyone there. Your friends donate hundreds of thousands to your charity in thanks for your donation and they write off the amount, you then take a hefty % for managing the disbursement of 5% of those proceeds. Its hard work raising money for those self-entitled down trodden bastards too lazy to stop being poor. EDIT: since I was downvoted by one who clearly doesnt think this is true - simply the latest revelation in this scheme should be illustrated: Bristol Palin, you know - the un-wed single teen mom who started a non-profit to educate teens on how to not become an un-wed single teen mom. She paid her self ~$260K (Some figures put the number as high as $450K) while donating ~$35K to the cause. http://www.google.com/search?q=bristol+palin+pays+herself&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a http://www.google.com/search?q=bristol+palin+pays+herself&#3... Or Bono's RED charity with $21 BILLION in funds where a vast % of which are suspected to be fraudulently funneled off: http://www.nbclosangeles.com/entertainment/celebrity/NATLCharity-Backed-By-U2s-Bono-Under-Fire-for-Corruption-114453359.html http://www.nbclosangeles.com/entertainment/celebrity/NATLCha... EDIT: For clarity, I do not know if Bono is, himself, benefiting from the apparent fraud with the RED fund - though as I am a skeptic I will not rule out the fact that some financial benefit is happening here. If not, wouldn't you, if it was your charity, be taking point on figuring this out ASAP? SO, with that said - I know that the cases of fraud are unevenly distributed through the various channels, but it would seem that this might be fairly indicative that peoples greed affect efficacy of a charity especially when the funds are in the multi-tens of billions.

tedunangst 16y ago
How does your incredible services fee not count as taxable income?
- phlux 16y ago
  As i mentioned I am not sure how the math works - but what I believe occurs is that the manager of the charity is likely not a "person" but setup as a trust. the money goes into that trust and is leveraged via loans / collateral just as is spelled out in several of the methods described in the link. The point is that the donations to charities and the income of your own charities also offset each other.
  - deleted 16y ago
    [deleted]
  - phlux 16y ago
    Nice try - however did you read the whole article posted? Did you look at the links regarding Bristol and her charity? Did you look at all at the RED fund corruption investigations? So, while I am making some assumptions, they are founded in reality. Further, it is clear that there are many mechanisms for wealthy to reduce their tax liability in creative ways (this is the premise of the article), thus for me to speculate that some vehicle for tax reduction may be to leverage some form of trust/partnership/collateral is being very upfront with my assumptions, further backed up by my repeated assertions that I am not sure how this works revealing that I could be totally wrong. Edit, perhaps my last comment was too harsh, redacted...
    - jbooth 16y ago
      Deleted mine because it was also a bit overheated and you seem to be commenting in good faith. I haven't investigated those links but it's my opinion that the vast majority of tax cheating is through means that involve fewer charities. (see GE).
    - phlux 16y ago
      We may be both correct. The over-inflated-self-payment form of cheating, ala Bristol Palin, may very well be the pedestrian 'new money' scam (for lack of better phrasing), whereas the other modes are far too sophisticated for her ilk and reserved for old-money to whom several hundred thousand is peasant pay.
wooster 16y ago
That "vast %" was in some grants, not over the whole fund: http://www.msnbc.msn.com/id/41221202/ns/health-health_care/ http://www.msnbc.msn.com/id/41221202/ns/health-health_care/ Your comment, as it stands, makes it sound like Bono is siphoning off funds, which doesn't appear to be true from the evidence available.
vl 16y ago
You confused me, why not to donate to your own charity directly and not to write it off the same way? No need for revolving door.
- phlux 16y ago
  IANACPA - but I would surmise this to be blatantly obvious tax fraud - where the other version is much easier to hide as "normal" activity.
- rprasad 16y ago
  You can't write off donations to fully offset income -- only 1/2 of your yearly income can be offset by charitable giving (or 30%, if you're stupid enough to donate to someone else's private foundation charity). This would also not be "blatant tax fraud". Indeed, it is the transaction underlying the private foundation form of charity, which is the oldest type of charity recognized in the US.
rprasad 16y ago
Yeah, that's not how it works. The part that the Palin story leave out is the excise tax (courtesy of the intermediate sanctions provisions of the IRC) that Bristol Palin paid on the salary she received, in addition to the income taxes she paid on it. Also ignored is that the majority of the corruption in Bono's charity was siphoned off by government officials in the countries where the charity was intending to offer its services. Non-profits are not revovling doors for cash. The IRS rigorously audits charities that take in more than $50,000 in doanations in a year, and they are very zealous about levying hefty sanctions for abusive transactions. The scanrio you laid out would not qualify as a non-profit for many reasons, including the lack of public support, the lack of sufficient spending on exempt purposes, oh--and a big one--pervasive self-dealing.

by phlux 16y ago

tedunangst 16y ago

How does your incredible services fee not count as taxable income?

phlux 16y ago
As i mentioned I am not sure how the math works - but what I believe occurs is that the manager of the charity is likely not a "person" but setup as a trust. the money goes into that trust and is leveraged via loans / collateral just as is spelled out in several of the methods described in the link. The point is that the donations to charities and the income of your own charities also offset each other.
- deleted 16y ago
  [deleted]
- phlux 16y ago
  Nice try - however did you read the whole article posted? Did you look at the links regarding Bristol and her charity? Did you look at all at the RED fund corruption investigations? So, while I am making some assumptions, they are founded in reality. Further, it is clear that there are many mechanisms for wealthy to reduce their tax liability in creative ways (this is the premise of the article), thus for me to speculate that some vehicle for tax reduction may be to leverage some form of trust/partnership/collateral is being very upfront with my assumptions, further backed up by my repeated assertions that I am not sure how this works revealing that I could be totally wrong. Edit, perhaps my last comment was too harsh, redacted...
  - jbooth 16y ago
    Deleted mine because it was also a bit overheated and you seem to be commenting in good faith. I haven't investigated those links but it's my opinion that the vast majority of tax cheating is through means that involve fewer charities. (see GE).
  - phlux 16y ago
    We may be both correct. The over-inflated-self-payment form of cheating, ala Bristol Palin, may very well be the pedestrian 'new money' scam (for lack of better phrasing), whereas the other modes are far too sophisticated for her ilk and reserved for old-money to whom several hundred thousand is peasant pay.

wooster 16y ago

That "vast %" was in some grants, not over the whole fund: http://www.msnbc.msn.com/id/41221202/ns/health-health_care/ http://www.msnbc.msn.com/id/41221202/ns/health-health_care/ Your comment, as it stands, makes it sound like Bono is siphoning off funds, which doesn't appear to be true from the evidence available.

vl 16y ago

You confused me, why not to donate to your own charity directly and not to write it off the same way? No need for revolving door.

phlux 16y ago
IANACPA - but I would surmise this to be blatantly obvious tax fraud - where the other version is much easier to hide as "normal" activity.
rprasad 16y ago
You can't write off donations to fully offset income -- only 1/2 of your yearly income can be offset by charitable giving (or 30%, if you're stupid enough to donate to someone else's private foundation charity). This would also not be "blatant tax fraud". Indeed, it is the transaction underlying the private foundation form of charity, which is the oldest type of charity recognized in the US.

rprasad 16y ago

Yeah, that's not how it works. The part that the Palin story leave out is the excise tax (courtesy of the intermediate sanctions provisions of the IRC) that Bristol Palin paid on the salary she received, in addition to the income taxes she paid on it. Also ignored is that the majority of the corruption in Bono's charity was siphoned off by government officials in the countries where the charity was intending to offer its services. Non-profits are not revovling doors for cash. The IRS rigorously audits charities that take in more than $50,000 in doanations in a year, and they are very zealous about levying hefty sanctions for abusive transactions. The scanrio you laid out would not qualify as a non-profit for many reasons, including the lack of public support, the lack of sufficient spending on exempt purposes, oh--and a big one--pervasive self-dealing.