Obama reviewing options on corporate tax loophole
WASHINGTON – President Barack Obama said he’s reviewing all options to stop American companies from reincorporating overseas to avoid paying U.S. taxes.
Calling the practice unfair and not right, the president said the tax income that’s lost as a result must be made up somewhere, usually through higher taxes or reduced government services.
Obama said he would prefer that Congress act to close the loophole, but that he’s considering acting on his own to end the practice.
Republicans have criticized Obama for acting on his own in many areas, even authorizing a lawsuit against the president on the matter. But Obama said the public expects him to use his executive authority to help make their lives better wherever he can and when Congress won’t send him legislation.
SEC seeks tough penalty for offshore tax evasion case
NEW YORK – The Securities and Exchange Commission wants to make an example of two Texas brothers found by a jury at a civil trial to have acted fraudulently to evade taxes, but a defense lawyer said Wednesday that the more than $750 million sought by the government is “hotly contested.”
A Manhattan federal judge will be left to decide on a figure in the penalty phase of a trial against Sam Wyly and the estate of his brother Charles, who a jury found avoided taxes from 1992 to 2002. The government said they paid no taxes on more than $500 million earned through offshore trusts designed to dodge taxes.
Attorney Stephen Susman told Judge Shira Scheindlin that the SEC’s analysis of how much money must be handed over was “entirely overblown,” and that the most that could be ordered to be surrendered was less than $24 million.
Susman said Charles Wyly’s estate has about $30 million in the United States while Sam Wyly has about $70 million plus a $12 million annuity. The lawyer said, though, that more than $380 million rested in offshore accounts.
Those offshore accounts were the focus of a trial earlier this year in which a jury found the brothers tried to hide some of the assets they controlled in four public companies that were sold for billions of dollars.
Sales of companies owned by the Wylys generated more than $14 billion. They included the arts and crafts retail chain Michael Stores Inc. and two technology companies. After the sales, Sam Wyly was on the Forbes list of billionaires for a time. Charles Wyly died in a 2011 car accident in Aspen, Colo., at 77.