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                                       politics + culture

Monday, October 10, 2005

Miers and sham tax shelters

Blogger it affects you links to this Bloomberg update of a story that just hasn't been going away. Bush Supreme Court nominee Harriet Miers' law firm, while she led it, was involved in constructing the flawed legal justification for a tax shelter in a case that Ernst and Young later paid a $15 million fine to settle with the IRS.

The Senate Permanent Subcommittee on Investigations said in February that the firm, Locke, Liddell & Sapp, provided "deficient'' opinion letters to support the shelter, which was used to convert highly taxed ordinary income into lower-taxed capital gains. Ernst & Young sold the shelter to more than 132 taxpayers, netting fees of more than $27.8 million, the report said. The Internal Revenue Service banned the transaction in May 2002. [snip]

Locke, Liddell & Sapp's endorsement of the tax shelter may complicate Miers's quest for Senate confirmation to the Supreme Court given that she headed the firm in 1999 and President George W. Bush emphasized that in nominating her. Republicans and Democrats have questioned Miers's qualifications for the high court and conservatives have expressed doubts about her positions on abortion and other issues.

Locke, Liddell & Sapp "issued legal opinions'' for the shelters and typically received $50,000 in fees for each letter, the Senate report said. The law firm's involvement was disclosed by the journal Tax Notes. Miers was co-manager of the firm from 1999 to 2001.


Pressure begets more pressure. Washington is a pressure cooker right now.

I wonder if this will amount to anything?

3 Comments:

  • I think this is an important story. The Bloomberg article is also one of those pieces written to make your eyes glaze over. Part of this is the nature of the story (legalistic evasion) but a larger part, I think, is the nature of how real news -- and economic news -- is conveyed by the press. The reporter, essentially, accepts the premises of evasion that he is supposedly uncovering: it's easy to get the sense of the article, but the actual fraud at stake, the actual money stolen, gets lost in a haze of "transaction" and "evasion". One version of this evasion, BTW, are the ready-made quotes that absolve Miers of any responsibility.

    By Blogger awol, at 9:20 PM  

  • Drip, Drip, Drip....

    By Blogger NYBri, at 9:55 PM  

  • "Gimme, gimme shelter."

    By Blogger awol, at 10:17 PM  

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