The Times on C1 looks at the weird story of a former AOL chief financial officer who blew the whistle on that firm’s fraudulent activities early this decade but is now being charged by the feds with financial fraud, along with seven other former executives.
The Times seems to come down on the side of the former exec, Joseph A. Ripp, quoting a litany of former colleagues and even prosecutors saying he was upstanding and was the “white hat” in the matter. The former editor in chief of Time Incorporated calls the charge “almost Kafkaesque.”
And indeed, it would be a bizarre turn of events if someone who blew the whistle on the ad-revenue inflation he found at AOL when he came over from Time Warner during the merger is ultimately found to be responsible for it. It seems the federales might not have even known about the stuff if it hadn’t been for Ripp, and other agencies (he’s being prosecuted by the Securities and Exchange Commission) have said he was the good guy in the matter.
IRS is after Anschutz
The Journal on A1 reports that the IRS is trying to get one heckuva tax bill out of billionaire Philip Anschutz. The government says he owes it $144 million in back taxes, and the Journal says the “court battle is part of a broad attempt by tax authorities to crack down on complex transactions used to defer paying capital-gains taxes.”
The paper says executives at other big companies have used “variable prepaid forward contracts” like Anschutz did, though it isn’t clear whether they did so for tax purposes, though it’s “typical” of such deals. Not one of the six companies, including Starbucks, Tyson Foods, and Cablevision Systems, would comment.
Much attention in the current presidential campaign has focused on tax breaks for the wealthy, including the cutting of the capital-gains tax rate to 15% early in the Bush administration. But less noticed is how some of the wealthiest Americans sometimes don’t even pay that full 15% rate, by deferring their taxes for many years. In Mr. Anschutz’s case, the transaction is scheduled to defer the taxes for nearly a decade.
Critics say such transactions could undermine the progressive nature of the income-tax system, because the deferrals effectively lower the taxes paid by the extremely wealthy.