Are we supposed to won this bad boy? How can we sue ourselves? http://www.nytimes.com/2009/03/20/business/20aig.html?hp A.I.G. Sues U.S. for Return of $306 Million in Tax Payments Article Tools Sponsored By By LYNNLEY BROWNING Published: March 19, 2009 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. Skip to next paragraph Add to Portfolio 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.”
"The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do." WTF!!!!!!!!!!!! These bozos have got to be out of their freaking minds! The only reason you are even around to sue anybody is because the government saved you from your own greed and stupidity! AIG needs to be broken down and sold off brick by brick. What American is going to use them for any service anyway?
The USA has an 80% equity stake, they could take over the board and stop this nonsense. It is a severe conflict of interest though. DD
How is this AIG's fault? Do you really think just because we throw them years of future debt they are all of sudden going to spend the money wisely? The only people to blame are the idiots who came up with the idea to give them tax payers money in the first place. Thats like giving a crackhead 1000 bucks because he blames his addiction on not having any money. Who's the fool? The crackhead or the person who gives him a $1000?
Hey, now we agree......but there are some poinent arguments as to why they could not go belly up unless we wanted a complete collapse..... Personally, I would have been in favor of a chapter 11 re-org of debt...but I admittadly do not understand the full impact of that....... Sam Fisher made some excellent points about what that would do as a ripple effect.. DD
This has been going on for awhile - this lawsuit is completely r****ded and a waste of resources as it's effectively a transfer of taxpayer money from one branch of the government to the other. AIG should drop this one.
No, but think about this lawsuit. They are suing their majority owner and number one creditor, to get their tax bill reduced, sand if they win, the money will go to pay their majority owner and number one creditor. As far as I can tell, the only party who benefits here is Sutherland Asbill.
But, their creditor will be paid off $306M faster than otherwise (less legal fees). That makes sense to me. It's like a petty interdepartmental fight we had at my office. HR bought a microwave but didn't want it to hit their budget because people from IT, Accounting and other departments would use it to. We had to prorate the cost of this stupid microwave to several departments so no one department would be unduly dinged on meeting their SG&A budgets. The dividends we pay to the parent company is the same in the end (less the increased cost of accounting for it), but who gets credit matters.
I'm going to copy/paste this: I think I'm too bewildered to be mad at this. WTF!? Not strong enough... how about a few more times: I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?I think I'm too bewildered to be mad at this. WTF!?
