Friday, October 07, 2016

Snide Comment From Bill White


Hello Harold:

So I'm sitting and someone comes up to me, and starts talking to me about how they defrauded the IRS for years, using those terms. They then state that they used to do contracting work, mark up the value of their goods and services, and then use the excess to build houses for their employees, thus taking the advantage of deducting the costs of those goods and services to minimize profits while accumulating capital gains.

After a bit of thought, I point out that that is not only not fraudulent, it is what the tax code encourages real estate developers to do -- make a profit on their contract jobs, then reinvest the money into unrealized capital gains on real estate.  The only potential error is that one has to deduct certain of the development expenses as depreciated capital investments instead of "repair and maintenance" expenses, but not all of them.
 

Whenever someone approaches me to discuss a complex financial scheme, represents it as fraud, and then, tells me something that is lawful to do, it sets off my suspicion bells. It seems that whenever the United States sends an informant after me with a complex financial fraud, what they are proposing is not in fact illegal -- like the guy who posed as  DIP investor and then offered to buy out the debt on my Chapter 11 estate at 100 cents on the dollar.  It took them about a month to figure out how to introduce an illegal element into that scheme, when the guy suggested running it all through an offshore IBC and not declare ownership.  And of course, at that point the question was "why, when you are paying off 100 cents on the dollar, would you try to hide your continuing ownership of the company, when such ownership is not only not illegal, but intended and encouraged by the bankruptcy laws?"

One of the federal government's biggest problems is that their agents are too busy snorting coke and worshipping the devil with pharmakoi to take the time to learn the kind of real life skills that would allow them to understand the laws they are supposedly upholding and investigating.

-Bill



William A. White #13888-084
U. S. P. Marion
P. O. Box 1000
Marion, IL 62959

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