IRS visits Sacramento carwash in pursuit of 4 cents

From The Sacramento Bee:

It was every businessperson’s nightmare.

Arriving at Harv’s Metro Car Wash in midtown Wednesday afternoon were two dark-suited IRS agents demanding payment of delinquent taxes. “They were deadly serious, very aggressive, very condescending,” says Harv’s owner, Aaron Zeff.

The really odd part of this: The letter that was hand-delivered to Zeff’s on-site manager showed the amount of money owed to the feds was … 4 cents.

Inexplicably, penalties and taxes accruing on the debt – stemming from the 2006 tax year – were listed as $202.31, leaving Harv’s with an obligation of $202.35.

Zeff, who also owns local parking lots and is the president of the Midtown Business Association, finds the situation a bit comical.

“It’s hilarious,” he says, “that two people hopped in a car and came down here for just 4 cents. I think (the IRS) may have a problem with priorities.”

Now he’s trying to figure out how penalties and interest could climb so high on such a small debt. He says he’s never been told he owes any taxes or that he’s ever incurred any late-payment penalties in the four years he’s owned Harv’s.

In fact, he provided us with an Oct. 22, 2009, letter from the IRS that states Harv’s “has filed all required returns and addressed any balances due.”

IRS spokesman Jesse Weller isn’t commenting “due to privacy and disclosure laws.”

Zeff says he’s as offended as much as anything else by what he considers rude behavior by the IRS guys. While at Harv’s, he sniffs, “they didn’t even get a car wash.”

Congress, Ariz. school district sues taxpayers to stop questions

This is what things are coming to. Taxpayers don’t have a right to public records, don’t have a right to know how their tax dollars are being spent, and attempts by taxpayers to find out this information is considered a form of harassment. This is usually because the government is covering up some type of corruption. Let’s use their own sort of logic against them: If you’ve got nothing to hide then why do you care if we see what you’re doing?

From goldwaterinstitute.org:

A handful of taxpayers in a small community north of Wickenburg, Arizona are being targeted by the local school district in a lawsuit that asks a judge to declare they have no right to request public records, sue the district, or complain to outside agencies.

The Congress Elementary School District claims that past efforts by these residents to obtain documents such as minutes of board meetings and spending reports amount to harassment that should not have to be tolerated.

But Jean Warren, one of the four defendants named in the lawsuit filed January 28, 2010, said the complaint is an illegal attempt to silence citizens who have questioned the district’s policies and spending practices.

“The whole thing is based on trying to shut us down so that nobody has any rights,” Warren said. “Just because you live in a small area does not mean you don’t have rights. Everything I believe about the Constitution and what it means to be a citizen of the USA is being shot down.”

The school district has a history of violating state laws mandating government transparency, according to investigations dating to 2002 done by the Arizona attorney general and state ombudsman. In 2002 and again in 2007, the district was found to be in violation of the state’s open meeting law by the Attorney General’s Office. In June 2009, the state ombudsman’s office admonished the district for its slow response to public records requests.

Liz Hill, the assistant state ombudsman for public access, told the Goldwater Institute she is not aware of any other instance in which a government agency has filed a court action seeking to block citizens from even requesting public records that should otherwise be available. It is something that frustrated government officials have talked about, but to her knowledge none has ever followed through, said Hill, who did not want to comment on whether the district’s lawsuit is justified.

“There’s a lot of talk about entities going and getting injunctions or other kinds of protective orders not to have to respond to certain individuals or certain requests,” Hill said. “But I haven’t actually been aware of any specific case, just more the theory of it. This is the first time I’ve actually seen someone go and attempt to do it.”

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Taxpayers to help with the rent at Goldman’s new office tower

We bailed them out, the least we can do is help with the rent till they can get on their own two feet again.

From Raw Story:

As if billions in cash and government guarantees wasn’t enough, it turns out investment bank Goldman Sachs will also be sucking on the taxpayers’ teat when employees move into their slick new digs at the corner of West and Vesey in Manhattan next year.

The New Goldman Sachs World Headquarters — a 43-story office tower next to the World Trade Center site — is being built with the help of millions of dollars from taxpayers, Bloomberg news service reports.

The company that has been the focus of populist anger since the TARP bailout last year took advantage of programs the government set up to revitalize lower Manhattan after the 9/11 attacks. Setting up shop next to the WTC qualified Goldman Sachs for $49 in “job-grant funds, tax exemptions and energy discounts,” Bloomberg’s Christine Harper reported.

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$25 billion “stimulus” program produces 0 jobs

Money, well… spent. Ok, more like pissed away.

From HotAir:

When Nancy Pelosi pushed Porkulus through on a party-line vote in the House and Harry Reid could only get three Republicans in the Senate, the GOP opposed the bill because it wouldn’t stimulate a nymphomaniac stripper on a Friday night.  The bill almost entirely consisted of nothing more than a laundry list of Democratic pork and progressive wish lists that had been circulating around Capitol Hill for years.  The Washington Post highlights one of the most prominent of the Porkulus programs, a $25 billion “energy efficiency” program that proves the point:

In Baltimore, the 300 block of East 23 1/2 Street is getting patched up in time for winter. One economic stimulus program is paying to insulate 11 rental rowhouses, another is paying for furnaces and a third is covering the cost for reflective roofs to be installed by prison inmates in a job-training program.

The block is part of one of the biggest initiatives ever undertaken by the federal government, a nationwide push to improve the energy efficiency of buildings. But as the national unemployment rate crosses into the double digits and Republicans question the stimulus program’s impact, the work on East 23 1/2 — even with all of its activity — has so far not produced a single job.

Nine months after Congress passed the $787 billion stimulus package, there is little tangible to show for one of its biggest single areas of investment, the $25 billion energy-efficiency effort. That points to one of the central tensions of President Obama’s landmark stimulus package: His goal was to inject money quickly into the economy while at the same time laying the groundwork for his broader, transformational agenda on energy, education and health care.

The Post doesn’t have that quite right.  This program and its zero-jobs output shows that Obama intended to lay the groundwork for a broad progressive agenda that would have the federal government eating up more capital and assuming greater power over the lives of Americans.  Not even Obama could sell this as an injection of cash into the economy. Most of the money went to states, which have mainly held onto it while they study the best way to build their bureaucracies on “energy efficiency.”

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Watchdog excoriates execution of TARP

From USAToday:

TODAY A Treasury Department watchdog is warning that a key $700 billion bailout program has damaged the government’s credibility, won’t earn taxpayers all their money back and has done little to change a culture of recklessness on Wall Street.”The American people’s belief that the funds went into a black hole, or that there was a transfer of wealth from taxpayers to Wall Street, is one of the worst outcomes of this program, and that is the reputational damage to the government,” said Neil Barofsky, special inspector general of the Troubled Asset Relief Program (TARP), in an interview.

SCATHING CRITICISM: TARP report slams lack of transparency

His 256-page report, out Wednesday, said TARP played a significant role in bringing the financial system back from the “brink of collapse” but questioned its effectiveness in increasing lending to small businesses or reducing the risk of foreclosures. Initially designed by the Treasury to buy toxic assets that threatened the financial system, TARP funds ended up invested in 685 banks, bailing out auto companies and funding a program on home mortgage modifications.

“We don’t even know where the money went,” says Rep. Daniel Lipinski, D-Ill., who recently called for TARP assistance to end in December, when it’s set to expire. The Treasury has the authority to extend the program until next October.

The report criticized Treasury’s implementation of the program and its lack of transparency, making 41 recommendations, 18 of which were implemented. Barofsky says it’s “extremely unlikely” that taxpayers will recover the $77 billion committed to the ailing auto industry or the $60 billion in TARP assistance to American International Group as part of a pledge of up to $180 billion in aid. An additional $50 billion to modify unaffordable home mortgages “will yield no direct return.”

Financial experts say it’s no surprise that the government won’t be able to recoup all of its investment in TARP. “Anybody who said this was all secured lending that would surely be repaid was kidding himself,” says Lawrence White, economics professor at New York University’s Stern School of Business.

To be sure, 47 financial companies have repaid $72.9 billion to the government. And Treasury has received interest and dividend payments or sold warrants for an additional $12.4 billion.

However, Barofsky says, the repayments and TARP’s role in stabilizing the financial system have led to a rebound in bank stock prices, which has removed the urgency of fixing problems with regulation of the financial system.

How Troubled Asset Relief Program funds were spent*, as of Sept. 30 (in billions):
Financial institutions
$319.5
Automotive industry
$81.1
Homeowner support programs
$27.1
Financial & credit markets programs
$26.7
* = what Treasury Department has committed to spend. Figures do not include $72.8 billion in repayments; Source: Treasury Department, Special Inspector General for TARP program

Goldman Sachs 2009 bonuses to double 2008’s; $23 billion could send 460,000 to Harvard, buy insurance for 1.7 million families

This problem brought to you by Big Government. GS was one of those “too big to fail” companies that needed bail-out money. Now we see why. Billion dollar bonuses are easier to hand out when they’re financed by taxpayer dollars.

From Raw Story:

Yesterday, we brought you the insurance company that wouldn’t insure a 17-pound infant because he was too heavy. Today, we bring you the investment bank that manages to double its bonuses during the worst recession since the Great Depression.

On Thursday, Goldman Sachs will announce the firm’s bonus payments for 2009. Analysts expect the bonus pool to mushroom to $23 billion — double the bonus pool paid to employees in 2008. Earlier this year, Goldman Sachs said that it had put aside $11.4 billion for bonuses during the first half of the year.

“The absolute size of compensation payouts will rise significantly,” Keith Horowitz, an analyst at Citigroup, wrote in a note to clients two weeks ago, highlighted by Andrew Sorkin in The New York Times’ dealbook column Tuesday.

How much is $23,000,000,000?

For one thing, it’s enough to send 460,000 full paying students to Harvard University for one year, or 115,000 for four years.

It’s enough to pay the health insurance premium for the average American family ($13,375) 1.7 million times.

It’s enough to upgrade 191 million computers to Windows 7 operating system (priced at $119.99), or to buy 115 million iPhones at $199.99 (provided the recipient was willing to sign a two-year contract).

Or, apparently, it’s enough to reward the employees of Goldman Sachs for a bonanza trading year, at a firm where average employee compensation was recently $622,000 — and likely to be greater this year.

The $23 billion figure could leave some American taxpayers woozy — the US government bailed out Goldman Sachs with a multi-billion payment last year, which the firm has since repaid.

But while Goldman is likely to pay its biggest bonuses ever to employees, the firm pays very little in taxes worldwide. In 2008, the company was said to have paid just $14 million in taxes worldwide, and paid $6 billion in 2007.

The firm’s corporate tax rate? About 1 percent. According a prominent tax lawyer, “They have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”

Sorkin says Goldman’s CEO is trying to hold off criticism by making a big charitable donation.

“Now there’s talk inside Goldman that it is considering making a huge charitable donation — perhaps more than $1 billion — as a way to help deflect the criticism,” Sorkin says. “Such a donation would be a welcome gesture that would no doubt benefit many needy organizations. But it would most likely be seen for what it is: a one-time move to draw attention away from where most of the money is really going. A large charitable donation also raises questions about the company’s fiduciary duty to its shareholders; it could be seen as giving away profits that ostensibly belong to them.”

Goldman to be paid $1bn if CIT fails

From FinancialTimes:

By Henny Sender and Saskia Scholtes in New York

Published: October 4 2009 22:30 | Last updated: October 4 2009 22:30

Goldman Sachs stands to receive a payment of $1bn – while US taxpayers would lose $2.3bn – if embattled commercial lender CIT files for Chapter 11 bankruptcy protection, people familiar with the matter said.

The payment stems from the structure of a $3bn rescue finance package that Goldman extended to CIT on June 6 2008, about five months before the Treasury bought $2.3bn in CIT preferred shares to prop it up at the height of the crisis. The potential loss for taxpayers would be the biggest to crystalise so far from the government’s capital injection plan for banks.

The agreement with Goldman states that if CIT defaults or goes bankrupt, it “would be required to pay a make-whole amount” that totals $1bn, the people familiar with the matter said.

While Goldman is entitled to demand the full amount, it is likely to agree to postpone payment on a part of that sum, these people added. A CIT filing last week said that it was in negotiations with Goldman “concerning an amendment to this facility”.

Goldman said: “This would not be a windfall payment. The make-whole payment is simply the present value of the spread to be earned over the life of the facility.”

CIT declined to comment. In an effort to prevent bankruptcy, it is working on a debt exchange offer that would virtually wipe out equity holders. In the event of bankruptcy, Goldman would reap more than $1bn because it also holds credit insurance that would be paid off.

Goldman said: “The credit default swaps Goldman Sachs purchased to prudently manage the risk associated with the CIT financing are not a directional ‘bet’ on CIT, but were bought to protect against the possibility of a precipitous decline in the value of the collateral.”