8 ms·

It's always amazing to me how in the world of high profile white collar criminality you can make billions and your punishment is to pay a few percent of it back

It's always amazing to me how in the world of high profile white collar criminality you can make billions and your punishment is to pay a few percent of it back. I wish ordinary theft worked like this. Steal 500 bucks and your punishment is to return 100.

29athrowaway 5y ago
The IRS can not only give you civil penalties like fines. They can also give you criminal penalties. They also have their own courts where you almost always lose.
- deleted 5y ago
  [deleted]
hellbannedguy 5y ago
It's time to tie alll Fees/Fines to 1040 income. (Patent fees, DMV fees, judicial fines, municipal code citations, school tuition, and even property taxes, etc.)
- throwaway0a5e 5y ago
  Get ready to see a lot of poor people ignoring the law just as much as the white collar crowd does then. A democratic society won't stand for the % of income that these fines and fees are to them being applied to everyone.
deleted 5y ago
[deleted]
loeg 5y ago
Your figures are sort of backwards. The article claims they saved $6.8B in taxes and will owe $7.7B in fines.
- ummonk 5y ago
  To clarify, the 7.7 billion figure is the 6.8 billion owed plus ~900 million in interest and fines.
  - jlawson 5y ago
    Imagine you steal 500 bucks and if caught, the only punishment is to pay back 600 years later. You'd have be almost certain of getting caught for it to not be a great idea.
    - lvs 5y ago
      That's basically an involuntary loan.
    - ummonk 5y ago
      That's true, and a part of me wants the penalties to be much higher. On the other hand, people are already scared enough of IRS audits - penalties would make it so much worse.
    - Kranar 5y ago
      Imagine you steal 500 bucks, invest it for 10 years turning it into 1000 dollars, and the punishment is to pay a fine of 700 dollars.
      - inter_netuser 5y ago
        Basically, every ICO, only with much bigger numbers.
- mertd 5y ago
  They saved 6.8B seven years ago. If they put that money in broad market index, they already made the fine amount by now and then some.
  - anonuser123456 5y ago
dehrmann 5y ago
> In 2015, the IRS issued guidance here that hedge funds using "basket options" had to report them on their tax returns and correct past returns, which came after a U.S. Senate subcommittee reported some funds were using this to avoid federal taxes. Tax rules are complicated, and these hedge funds are relying on technicalities to reduce their tax burden. This one didn't work out, but you can be sure their lawyers looked at the code and can say with a straight face that they didn't know how the IRS would rule. That doesn't make you a criminal. It also sounds like they're paying back the entire amount in question, not "a few percent."
justinjoshuak 5y ago
That's not really what's happening here. Tax obligations under the law are not clear cut. There's ambiguity. The law is often general in nature and old. It may not be clear how the law applies to a specific business. A large business could seek out the opinion of ten different tax professionals and get a range of answers of how much tax the law requires them to pay. Even the IRS may not be certain. It's not unusual or unexpected that a business may have a disagreement with the IRS on how to interpret the law. If the taxpayer and the IRS can't come to an agreement, then the only way to resolve it is to take it to court and force a judge to make a call - the ruling then at least provides certainty to other businesses in the same situation. For most people, their experience of paying tax as an individual has little relevance to the tax affairs of large businesses. Since there are millions of individuals, for any area of the law that's ambiguous, someone has already challenged the IRS and had the matter resolved in court, providing clarity for other individuals. This is not true for some businesses as there may only be a handful of other businesses (or even none at all) in a similar situation.
- dailo10 5y ago
  Except in this case they went too far and the IRS busted them - to the tune of $7B. Let’s not pretend like they weren’t trying to get away with not paying their fair share of taxes here. And to OP's point - if the punishment was in proportion to how much they tried to steal - well, you’d probably see a lot less “creativity” in these tax schemes.
  - smabie 5y ago
    Of course they were trying to minimize taxes, just like everyone else, individuals and corporations alike. In this case it didn't work, but I don't see any parallels with stealing.
- loeg 5y ago
  This situation isn’t as complicated as you make out. They tried to pay the (lower) long-term capital gain rate for trades with short-term gains. Individuals face the exact same holding requirement and can readily understand that the lower long-term rate is intended to incentivize buy-and-hold investing rather than intraday trading.
lostmsu 5y ago
Have you missed all the articles about theft in San Francisco going nearly entirely unpunished?

29athrowaway 5y ago

The IRS can not only give you civil penalties like fines. They can also give you criminal penalties. They also have their own courts where you almost always lose.

deleted 5y ago
[deleted]

hellbannedguy 5y ago

It's time to tie alll Fees/Fines to 1040 income. (Patent fees, DMV fees, judicial fines, municipal code citations, school tuition, and even property taxes, etc.)

throwaway0a5e 5y ago
Get ready to see a lot of poor people ignoring the law just as much as the white collar crowd does then. A democratic society won't stand for the % of income that these fines and fees are to them being applied to everyone.

deleted 5y ago

[deleted]

loeg 5y ago

Your figures are sort of backwards. The article claims they saved $6.8B in taxes and will owe $7.7B in fines.

ummonk 5y ago
To clarify, the 7.7 billion figure is the 6.8 billion owed plus ~900 million in interest and fines.
- jlawson 5y ago
  Imagine you steal 500 bucks and if caught, the only punishment is to pay back 600 years later. You'd have be almost certain of getting caught for it to not be a great idea.
  - lvs 5y ago
    That's basically an involuntary loan.
  - ummonk 5y ago
    That's true, and a part of me wants the penalties to be much higher. On the other hand, people are already scared enough of IRS audits - penalties would make it so much worse.
  - Kranar 5y ago
    Imagine you steal 500 bucks, invest it for 10 years turning it into 1000 dollars, and the punishment is to pay a fine of 700 dollars.
    - inter_netuser 5y ago
      Basically, every ICO, only with much bigger numbers.
mertd 5y ago
They saved 6.8B seven years ago. If they put that money in broad market index, they already made the fine amount by now and then some.
- anonuser123456 5y ago

dehrmann 5y ago

> In 2015, the IRS issued guidance here that hedge funds using "basket options" had to report them on their tax returns and correct past returns, which came after a U.S. Senate subcommittee reported some funds were using this to avoid federal taxes. Tax rules are complicated, and these hedge funds are relying on technicalities to reduce their tax burden. This one didn't work out, but you can be sure their lawyers looked at the code and can say with a straight face that they didn't know how the IRS would rule. That doesn't make you a criminal. It also sounds like they're paying back the entire amount in question, not "a few percent."

justinjoshuak 5y ago

That's not really what's happening here. Tax obligations under the law are not clear cut. There's ambiguity. The law is often general in nature and old. It may not be clear how the law applies to a specific business. A large business could seek out the opinion of ten different tax professionals and get a range of answers of how much tax the law requires them to pay. Even the IRS may not be certain. It's not unusual or unexpected that a business may have a disagreement with the IRS on how to interpret the law. If the taxpayer and the IRS can't come to an agreement, then the only way to resolve it is to take it to court and force a judge to make a call - the ruling then at least provides certainty to other businesses in the same situation. For most people, their experience of paying tax as an individual has little relevance to the tax affairs of large businesses. Since there are millions of individuals, for any area of the law that's ambiguous, someone has already challenged the IRS and had the matter resolved in court, providing clarity for other individuals. This is not true for some businesses as there may only be a handful of other businesses (or even none at all) in a similar situation.

dailo10 5y ago
Except in this case they went too far and the IRS busted them - to the tune of $7B. Let’s not pretend like they weren’t trying to get away with not paying their fair share of taxes here. And to OP's point - if the punishment was in proportion to how much they tried to steal - well, you’d probably see a lot less “creativity” in these tax schemes.
- smabie 5y ago
  Of course they were trying to minimize taxes, just like everyone else, individuals and corporations alike. In this case it didn't work, but I don't see any parallels with stealing.
loeg 5y ago
This situation isn’t as complicated as you make out. They tried to pay the (lower) long-term capital gain rate for trades with short-term gains. Individuals face the exact same holding requirement and can readily understand that the lower long-term rate is intended to incentivize buy-and-hold investing rather than intraday trading.

lostmsu 5y ago

Have you missed all the articles about theft in San Francisco going nearly entirely unpunished?