A.I.G. Sues Government

[blinky8225]

March 20, 2009 A.I.G. Sues Government for Return of $306 Million in Tax Payments
By LYNNLEY BROWNING

While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company?s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.

A.I.G. is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year.

The lawsuit, filed on Feb. 27 in Federal District Court in Manhattan, details, among other things, certain tax-related dealings of the financial products unit, the once high-flying division that has been singled out for its role in A.I.G.?s financial crisis last fall. Other deals involved A.I.G. offshore entities whose function centers on executive compensation and include C. V. Starr & Company, a closely held concern controlled by Maurice R. Greenberg, A.I.G.?s former chairman, and the Starr International Company, a privately held enterprise incorporated in Panama, and commonly known as SICO.

The lawsuit contends in part that the federal government owes A.I.G. nearly $62 million in foreign tax credits related to eight foreign entities, with names like Lumagrove, Laperouse and Foppingadreef, that were set up or controlled by financial products, often through a unit known as Pinestead Holdings.

United States tax law allows American companies to claim a credit for any taxes paid to a foreign government. But the I.R.S. denied A.I.G.?s refund claims in 2008, saying that it had improperly calculated the credits. The I.R.S. has identified so-called foreign tax-credit generators as an area of abuse that it is increasingly monitoring.

The remainder of A.I.G.?s claim, for $244 million, concerns net operating loss carry-backs, capital loss carry-backs, a general refund claim and claims for refunds of other tax-related payments that A.I.G. says it made to the I.R.S. but are now owed back. The claim also covers $119 million in penalties and interest that A.I.G. says it is due back from the government.

In part, A.I.G. says it overpaid its federal income taxes after a 2004 accounting scandal that caused it to restate its financial records. A.I.G. says in part that it is entitled to a refund of $33 million that SICO paid in 1997 as compensation to employees, which it now says should be characterized as a deductible expense.

A.I.G.?s lawyers in the case, at Sutherland Asbill & Brennan, referred calls to the company. Asked about the lawsuit, Mark Herr, an A.I.G. spokesman, said Thursday that ?A.I.G. is taking this action to ensure that it is not required to pay more than its fair share of taxes.?

http://www.nytimes.com/2009/03/20/business/20aig.html

They might have a point, but haven't we already given A.I.G. well more than that? A.I.G. truly has no shame considering that they would have gone bankrupt already without the Federal Government.

 

[cubby1223]

That's the problem with all this OMG WE MUST DO SOMETHING WITHOUT TAKEN ANY TIME TO CONSIDER WHAT WE'RE DOING!!! Party of "Hope"? More like "Dope". I'll stick with the party of "Nope", thank you very much.

I say this is all just more proof that the IRS needs to die. No one understands the tax code.

 

[Barfo]

and the drama continues...

 

[BriGy86]

From what I have heard on talk radio the bonus contracts were made before the bailouts. The stimulus plan that was passed specifically said that all current contracts should still be followed. And now that AIG is following the contracts they agreed to they are catching hell for it.

The bottom line is they shouldn't have been given a bailout to begin with. But the government went ahead and gave them money and screwed up again by not investigating where the money may be going based on current contracts the company had.

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

 

[blinky8225]

Originally posted by: BriGy86
From what I have heard on talk radio the bonus contracts were made before the bailouts. The stimulus plan that was passed specifically said that all current contracts should still be followed. And now that AIG is following the contracts they agreed to they are catching hell for it.

The bottom line is they shouldn't have been given a bailout to begin with. But the government went ahead and gave them money and screwed up again by not investigating where the money may be going based on current contracts the company had.

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Did you read the article? A.I.G. isn't suing over bonuses. According to A.I.G., the government owes them a huge tax refund. However, they are using bailout money to fund the lawsuit.

 

[BriGy86]

Originally posted by: blinky8225

Originally posted by: BriGy86
From what I have heard on talk radio the bonus contracts were made before the bailouts. The stimulus plan that was passed specifically said that all current contracts should still be followed. And now that AIG is following the contracts they agreed to they are catching hell for it.

The bottom line is they shouldn't have been given a bailout to begin with. But the government went ahead and gave them money and screwed up again by not investigating where the money may be going based on current contracts the company had.

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Did you read the article? A.I.G. isn't suing over bonuses. According to A.I.G., the government owes them a huge tax refund. However, they are using bailout money to fund the lawsuit.

Sorry I was responding more the the broad picture of the AIG mess. Although I'd rather not have the company fund a lawsuit on our dime I believe it all comes down to the fact that the bailouts shouldn't have been given out in the first place.

If they hadn't gotten a bailout we wouldn't have to be pissed about funding AIG's lawsuit with our money or giving our money out as bonuses.

Oh and when I was talking about suing over bonuses, I meant workers suing AIG over not honoring the bonus contracts that were setup.

 

[babylon5]

Originally posted by: BriGy86

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Poor AIG!! Why is it the little guy always get screwed?

:roll:

 

[BriGy86]

Originally posted by: babylon5

Originally posted by: BriGy86

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Poor AIG!! Why is it the little guy always get screwed?

:roll:

I'm not necessarily sticking up for AIG. I would have rather had them get no money from the government period and then fail.

I find it stupid that the government made the rules for the bailout and now since they didn't look at their own bill carefully enough they want to put all the blame for the squandered money on AIG. I believe the government is partially at fault.

 

[StageLeft]

AIG, the joke never ends.

 

[0marTheZealot]

I really don't get the audacity of AIG. If it wasn't for the federal government, they'd all be out of jobs. Frankly, with what they've done to this economy, they should be glad they aren't in jail.

The government owns AIG. We have an 80% stake in the company, why is this lawsuit even alive? Couldn't the government simply shut it down, just like the board can shut down any litigation by a majority vote?

 

[WHAMPOM]

Ow! OW! OW, OW, OW!! Us poor A.I.G. 'xutive geniuses wants more money. Give it to us now!! The hush, er' "bonus" money just ain't enough.

 

[rudder]

All the more reason to keep propping them up with billions of tax dollars.

 

[trenchfoot]

AIG = S-P-O-I-L-E-D R-O-T-T-E-N from lack of R-E-G-U-L-A-T-I-O-N.

They are so in denial that they still think they should be treated as they were from 2000-2008 when their lapdog Bush and his trainer-whisperer Cheney cut as many regulatory leashes as they could, winked and turned their backs to the pack of predatory profiteers they set loose and allowed that pack of greed-driven opportunists run amok to gouge, loot, plunder, pillage and financially rape and ruin our Nation at will.

Their chronic blood-lust for riches upon riches will never be cured, but hopefully, under Obama's watch, at least restrained from repeating what they have done to our Nation.

Let the looters, corruptors and big business crooks "de-regulate" themselves and our Nation into financial ruin ever again?

Sure, all we have to do is vote the repubs back in control.

 

[Phokus]

Whoever the former AIG CEO was, arrest him, publicly draw and quarter him, and put his head on a pike in front of the NYSE. The new CEO will get the message.

Send a message to these asshats that we're sick of their bullshit.

 

[OutHouse]

what pissed me off was the tools in congress who totally beat down the current CIO of AIG. he had nothing to do with those contracts or what was in the bill. AND to top it off the tools of congress who grilled him WERE THE ONES WHO FUCKING VOTED FOR THE BILL!!!!.

he should have stood up and pointed at them and said "YOU JACKASSES VOTED FOR THE BILL!!, YOU ARE THE ONES WHO SHOULD BE IN THIS CHAIR NOT ME!!!!"

 

[scruffypup]

Originally posted by: BriGy86

Originally posted by: babylon5

Originally posted by: BriGy86

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Poor AIG!! Why is it the little guy always get screwed?

:roll:

I'm not necessarily sticking up for AIG. I would have rather had them get no money from the government period and then fail.

I find it stupid that the government made the rules for the bailout and now since they didn't look at their own bill carefully enough they want to put all the blame for the squandered money on AIG. I believe the government is partially at fault.

WAIT,... I think I see the point of this now,... the government makes the rules, doesn't play by them, shifts the blame elsewhere and then screws everyone?

Personally I think we all have a case for sueing the government at this point,...

 

[irishScott]

If the US was a game of SimCity, this is where I'd unleash every natural disaster on the board, laugh, and start from scratch with the hearty survivors. Seriously, somehow or other a lot of these spoiled moron execs just need to drop off the face of the Earth. Not just talking about AIG either.

Why can't they just shrink their incomes to say.. 200k a year? It's well above what the vast majority of people make, and they'd get along just fine. I suppose this is a fundamental problem with Capitalism. Unfortunately there's no real better alternatives at the moment.

 

[Starbuck1975]

They are so in denial that they still think they should be treated as they were from 2000-2008 when their lapdog Bush and his trainer-whisperer Cheney cut as many regulatory leashes as they could, winked and turned their backs to the pack of predatory profiteers they set loose and allowed that pack of greed-driven opportunists run amok to gouge, loot, plunder, pillage and financially rape and ruin our Nation at will.

Yes, the Republicans are to blame for creating the monster, but the Democrats continue to feed it crumbs and then wonder why it comes back to bite them?

 

[EagleKeeper]

Originally posted by: cubby1223
That's the problem with all this OMG WE MUST DO SOMETHING WITHOUT TAKEN ANY TIME TO CONSIDER WHAT WE'RE DOING!!! Party of "Hope"? More like "Dope". I'll stick with the party of "Nope", thank you very much.

I say this is all just more proof that the IRS needs to die. No one understands the tax code.

Congress generates the tax code. the IRS just enforces it.

 

[EXman]

Originally posted by: Skoorb
AIG, the joke never ends.

Compared to congress it is barely a snicker.

 

[Jaskalas]

Originally posted by: cubby1223
I say this is all just more proof that the IRS needs to die. No one understands the tax code.

Damn straight, shut it down.

 

[winnar111]

Wow, Zero's administration is getting owned like Chattanooga v Connecticut.

 

[Mean MrMustard]

Originally posted by: cubby1223

I say this is all just more proof that the IRS needs to die. No one understands the tax code.

/facepalm

You fool... The IRS doesn't write the tax code. Politicians who pass tax law do. Don't blame the IRS, they're just implementing what your politicians and by extension YOU told them to.

:roll:

 

[sactoking]

Originally posted by: Mean MrMustard

Originally posted by: cubby1223

I say this is all just more proof that the IRS needs to die. No one understands the tax code.

/facepalm

You fool... The IRS doesn't write the tax code. Politicians who pass tax law do. Don't blame the IRS, they're just implementing what your politicians and by extension YOU told them to.

:roll:

Actually, through the Internal Revenue Bulletin, revenue procedures, and NPRMs the IRS is able to write tax code. Their pronouncements carry the full weight of a Congressionally passed bill.

 

[runzwithsizorz]

Originally posted by: blinky8225

Originally posted by: BriGy86
From what I have heard on talk radio the bonus contracts were made before the bailouts. The stimulus plan that was passed specifically said that all current contracts should still be followed. And now that AIG is following the contracts they agreed to they are catching hell for it.

The bottom line is they shouldn't have been given a bailout to begin with. But the government went ahead and gave them money and screwed up again by not investigating where the money may be going based on current contracts the company had.

It's sounds like AIG is screwed either way. A) they don't pay the bonuses which they agreed to do and get sued for breach of contract or B) pay out the bonuses and get a congressional investigation.

Did you read the article? A.I.G. isn't suing over bonuses. According to A.I.G., the government owes them a huge tax refund. However, they are using bailout money to fund the lawsuit.

LOL, is this a great country, or what? BTW, BriGy86, in a nutshell, nailed it!! This is all just posturing, appeasement, and MISDIRECTION. Better start watching what the other hand is doing.