Those who trade their labor for earnings, are not. If you are a laborer, you are not making a profit. The amount of your labor is equal to the amount you are paid. Its unconstitutional for you to be taxed. A tax lawyer should know this. A tax lawyer should question what is taught in school and read the source: the constitution.

AIG, is a business, that makes profit. It should not try to get out of owing taxes. Their lawyer should know better.

I agree with you on the due diligence part . . . but they were in such a rush to do something they didn’t stop and take a breath long enough to ask the right questions.

I am not suggesting you don’t have the right to your opinion. I am just saying that I think it’s unlikely that either one of us has enough of the facts to be able to render an reliable opinion.

Also, I think it’s irrelevant whether or not they use the bailout funds or some other funds to pay their legal fees or the additional assessments should they lose the claim. Challenging IRS assessments it believes are unwarranted is a proper use of corporate funds.

Gosh, did you and I read the same post? Cause I didn’t once claim that AIG schemed to use government money to sue for refund… In fact, I didn’t imply that any of the legal fees were federal money at all. I did suggest that, if they lose, they might use bailout funds to pay up – but those are different things entirely.

And I do think they’ll lose. I’m allowed to say such things, despite the fact that others may disagree. It’s my *opinion*.

I’m suggesting that AIG is not going to win not because (1) the Commish testified before Congress that the transactions were abusive at a time when those types of transactions were being scrutinized and (2) the Proposed Regs – which passed – subsequently banned those transactions. Advantage, IRS.

As to the bailout, I didn’t think it was a good idea when it happened, structured they way that it was. And now, in light of the tax issues, the overspending by AIG execs and the legal issues that I’m sure will follow a la Fannie Mae and Freddie Mac, I still believe that. I do think there should be criteria for bailing out companies and it’s silly to suggest that not filing for a tax refund should be one of them (again, I never said or implied that). But a little due diligence from the feds seems to be missing here…

How do you know the IRS is right on this issue and AIG is wrong? As a tax lawyer do you often make the assumption that the government is infallible? I don’t.

Your claim that AIG schemed to use the government’s money to fund an IRS lawsuit ignores the fact that AIG filed it’s claim for refund before it was awarded the bailout funds.

AIG got the bailout money in order to keep it’s business afloat. It gets to decide how to use those funds, not the government. After all, do you really want government staffers making the business decisions of our corporate conglomerates?

By the way, what condition would you have put on AIG’s receipt of the bailout funds? Would you have required AIG to abandon it’s 329 million dollar refund claim?

As a taxpayer I, too, want to see the bailout funds put to good use, but if the IRS is wrong on the foreign tax credits and AIG is right, the use of AIG corporate funds (from whatever source) to pursue the IRS claim is not only a business but a moral imperative.

The failure of AIG’s Board to approve the use of funds for this purpose would constitute a breach of it’s fiduciary duty to AIG shareholders.

Suing the IRS to get a refund of taxes AIG believes it should not have paid is the right thing to do. If the suit is frivolous as you suggest, AIG and its attorneys should be sanctioned and required to pay the government’s costs of its defense of the suit.

Finally, I don’t have anything remotely approaching your level of certainty about the outcome of AIG’s claim. Apparently, AIG’s tax attorneys disagree with you that AIG “won’t win.”

I think it’s safe to assume that they are infinitely more informed than either you or I about the facts and law involved in the case.

Why don’t we just wait to see the outcome of the AIG claim? The IRS has been wrong before and it’s a good bet they’ll be wrong again in the future.

It’s one of the reasons you and I have jobs.

Government protects the businessmen because they fear if they go after them, it will create instability and then a nationwide financial problem will be blamed on Congressional oversight and strict rules. Well, ladies and gentlemen of the U.S. govt., the damage has been done. We can’t be any more vulnerable than we are now. So go after those a–holes already so we can move on.