Tax-Exempt Firm Gets $600 Million Profit Flying First Class
Tax-Exempt Firm Gets $600 Million Profit Flying First Class - Bloomberg
|
Since 1862, an obscure company called American Bureau of Shipping has been approving oceangoing vessels as seaworthy. The Houston-based firm reported $3.17 billion in revenue and just less than $600 million in profits from ship inspections from 2004 to 2010 and paid no U.S. income taxes on those earnings. The Internal Revenue Service hasn’t had any complaints. That’s because the company has been registered as a nonprofit for 150 years ABS paid Robert Somerville, then its chief executive officer, $21.7 million from 2004 to 2010. Another such outfit is the U.S. Polo Association, which tells the IRS its tax-exempt status is allowed because its purpose is to govern the sport of polo in America. In 1982, more than five years after clothing designer Ralph Lauren featured a player with a mallet on horseback for his Polo brand logo, the Polo Association began licensing its own line of merchandise -- with a similar image. Today, the association’s brand, U.S. Polo Assn., has annual retail sales of $1 billion, placing it in the top 50 of all licensed brands. The association pays no income tax on its licensing income, its filings show. The roster of tax-exempt trade associations includes the National Football League and the National Hockey League. The NFL -- which in 2011 negotiated $27.9 billion in television contracts over nine years for its 32 member teams -- paid Commissioner Roger Goodell $11.6 million in fiscal 2011. It reported a loss of $52.2 million. These are just a few such examples... At a time when the U.S. is struggling with a gaping budget deficit, nonprofit companies such as ABS and the Polo Association operate large-scale, profit-making commercial enterprises tax-free. “This showcases a massive problem of tax-exempt companies that walk, talk and quack like tax-paying businesses but benefit from very favorable treatment under the tax code,” says Dean Zerbe, a lawyer who was senior counsel and tax counsel for the Senate Finance Committee until 2010. “Taxpayers are subsidizing them. It’s wild.” Anyone can start a nonprofit. It’s as simple as incorporating in any state and correctly filling out an IRS application. Once that’s done, a company is tax-exempt. |
15 Minute Forex Bar Trading System Free at
http://www.fxscalpingmethod.com