- Dec 7, 2010
- 8,770
- 3
- 0
Race Radio said:
I'm also confused.
Did all the peeps know each other in the real world or was this just an interweb'z connection?
I have a hard time buying things online from major companies so sending money via paypal to a defense fund to people I don't know would not be smart decission in my opinion.
I heard this guy needs some money why not help him out also. http://hongkongphooeyfairnessfund.wordpress.com/
- Jul 5, 2012
- 2,878
- 1
- 11,485
MarkvW said:
Induced? INDUCED?? Good grief now I've heard it all. At the most they "encouraged" people to donate, and facilitated the process by setting up the account. They certainly didn't induce anyone unlike the likes of Lance, Hog and Hein, well known thugs and bullies.
Its funny how the injudicious use of a single word can so slant a narrative.
- Apr 13, 2011
- 1,071
- 0
- 10,480
A fool and his money are easily parted. The case with these things often.
Brown's statement leads me to believe this is complete nonsense and he has control and the funds.
"Cyclingnews contacted Brown who told us that, "we didn't realise that there would be an IRS 1099 form that meant there was a tax liability for what was in the funds. In January and February Lesli had said she couldn't deal with the liability, said I would take the liability and I would take on the responsibility and initiated that change with PayPal as I was willing to take the risk."
For the non-Americans and those that don't know the US Tax code. The story of a 1099 form being some huge liability is complete B.S.
A 1099 in this case, since Paypal was likely paying interest on the funds sitting in the account. I believe a paltry 1% these days. At most, the tax liability would be 25% of the interest earned. So lets say it was $100,000 USD (no way it was as a tax basis, but for simplicity sakes), the interest earned for the tax year would be $1,000 dollars. So at most, the tax burden would have been $250.
The 1099, Brown didnt specify which 1099 exactly, but I'm pretty certain it would have been a 1099 INT form. Which Paypal by law would notify the the IRS of the interest earned, Brown would also receive the form, and has to pay the tax.
There would be ZERO burden to anybody of the fund, because you would just pay the $250 out of the extra $1,000 of interest earned on the $100,000 in the account.
It would just take a few minutes to deal with it.
Brown's statement leads me to believe this is complete nonsense and he has control and the funds.
"Cyclingnews contacted Brown who told us that, "we didn't realise that there would be an IRS 1099 form that meant there was a tax liability for what was in the funds. In January and February Lesli had said she couldn't deal with the liability, said I would take the liability and I would take on the responsibility and initiated that change with PayPal as I was willing to take the risk."
For the non-Americans and those that don't know the US Tax code. The story of a 1099 form being some huge liability is complete B.S.
A 1099 in this case, since Paypal was likely paying interest on the funds sitting in the account. I believe a paltry 1% these days. At most, the tax liability would be 25% of the interest earned. So lets say it was $100,000 USD (no way it was as a tax basis, but for simplicity sakes), the interest earned for the tax year would be $1,000 dollars. So at most, the tax burden would have been $250.
The 1099, Brown didnt specify which 1099 exactly, but I'm pretty certain it would have been a 1099 INT form. Which Paypal by law would notify the the IRS of the interest earned, Brown would also receive the form, and has to pay the tax.
There would be ZERO burden to anybody of the fund, because you would just pay the $250 out of the extra $1,000 of interest earned on the $100,000 in the account.
It would just take a few minutes to deal with it.
- Aug 10, 2010
- 6,285
- 2
- 17,485
sittingbison said:
Encouraging a person to donate money to a fund kept in your business bank account IS inducing if the person relies on your encouragement to make the donation.
There is no way I would have donated to that fund if I knew it was just that anonymous UCI Overlord guy managing it.
If I have a partner and you deal with my partnership and get ripped off in the process, I can't say "He took it, go after him--but leave me out of it." It doesn't work that way. If my partner ripped you off in that circumstance, then I'm going to be liable for his misdeeds (even if that partner is a thief).
Using Lance Armstrong as a moral benchmark for anything is just ridiculous.
This induce thing is unreal. We told people the situation, where they could donate if htey so wished.
It's not like we promised people a holiday if they donated.
I am also miffed at the people taking a go at the rest of us who started it. We took the initiative whilst the rest sat on your ***.
As regards knowing each other, yes is the answer. I am friends with Kimmage, Andy and Lesli. I have the world of respect for all three and will continue to defend them.
It's not like we promised people a holiday if they donated.
I am also miffed at the people taking a go at the rest of us who started it. We took the initiative whilst the rest sat on your ***.
As regards knowing each other, yes is the answer. I am friends with Kimmage, Andy and Lesli. I have the world of respect for all three and will continue to defend them.
- Jul 5, 2012
- 2,878
- 1
- 11,485
MarkvW said:
"mods on this forum" have done no such thing! It's not my problem If you dont know when a mod is warning you compared to a suggestion in the narrative. Here is a hint....warnings are done in private and its as clear as day, such as "I am warning you".
Are you twisting the truth on purpose?
zigmeister said:
Thanks for the info.
It sounds like the money initially went to a Paypal which was in Cohen's name so she would be faced with the liability. If that is the case, wouldn't any liability which Brown faces personally only be the result of him transferring the money into his account? And if he doesn't have US accounts it would be a Canada tax issue? The whole "I would take the liability" doesn't make sense anyway, why wouldn't it just be paid out of the account? If it was in Cohen's or a business account then that's where the liability would be, not with Brown personally?
All questions no answers
- Feb 25, 2011
- 2,538
- 0
- 11,480
yes, which is why he has so smoothly ignored that that what he wrote earlier is contradicting what he is saying now:thehog said:
MarkvW said:
the reason we all donated to the fund. not because we were encouraged or induced or solicited or any other nonsense verb Mark can come up with.
- Aug 7, 2010
- 1,247
- 0
- 0
thehog said:
...with an incredible ability to multi-task....practicing law and posting here. Unless only one of these applies.
- Apr 20, 2012
- 6,320
- 0
- 0
Maybe it is just me but after this good explanation I tend to ask the question why the IRS thing would be a problem for the cyclismas.editor.zigmeister said:
Somehow things do not add up.
Furthermore I agree with the guy who stated the thing about anonymous internet stuff raising money for Kimmage.
Lets just hope Paul Kimmage will not be the victim here.
- Dec 7, 2010
- 8,770
- 3
- 0
Digger said:
You guys are real life meet and greet friends. None of my business to what extent but sufficient enough for you to feel comfortable calling them friends.
What about the UCI_Overlord? He is the one who holds the money now and also seems to be playing the games. Was he as familiar for all of you involved?
Glenn_Wilson said:
It's the clinic and it should be expected, and mused over for entertainment purposes only. When Stimpy retires, Ren can rest assured he'll find his replacement from one of the frequent clinic denizens. The smart money says the one that gets the blue nose will mostly likely have listed on his resume, "victim of the Floyd Fairness Fund" also.
If this wasn't affecting people's lives so much the bantering going on here would be very amusing. Obviously, we don't know all the facts so what I am saying below is all conjecture and shouldn't be taken as legal advice to anyone.
Some of the salient facts are:
1. Donated funds were to support Paul Kimmage in his legal battles with the UCI
2. Funds were placed in a general bank account used for the general business of "Cyclimas" -- it is not clear whether this is a corporate or other form of business account (partnership) but it is located in the United States. The funds therefore became co-mingled with the general revenues of Cyclimas. The account used the Tax Identification Number of Lesli Cohen as its authority. It should be noted that foreigners, e.g. Aaron Brown, can apply for a U.S. TIN but for some reason this was not done.
3. The funds were subsequently transferred to an account or accounts controlled only by Aaron Brown in either or both of Spain and Canada.
4. Cohen and Brown appear to have had a general falling out. It appears that the Kimmage fund is only one of many issues surrounding the two. We do not know why the Kimmage fund issue came into the public at this time and how much it is being used as part of the overall negotiations between the parties.
What are the issues surrounding the funds donated on behalf of Kimmage?
1. Are the funds traceable? The funds went into the general account of Cyclimas and are/were co-mingled with the general revenue of Cyclimas. Fortunately, it appears that the donated funds were easily traceable and if Brown's page shot is to be believed are now held in a segregated account.
2. Are the funds taxable?
In the U.S.? This is the big question. Paypal is required to issue a T1099 - k to any U.S. organization that goes above a certain transaction limit. The Cyclimas account obviously had this level of activity. Where the organization is a non-profit (IRS Code 503) it files its non-profit return, pays no tax, and goes on with life. So if the time had been spent to properly set up the funding vehicle -- no issue. Where the entity is a business it is required to pay tax on its overall income. The IRS, apparently and logically from their viewpoint, has taken the view that all Cyclimas revenue is from business and assessed accordingly.
The big issue is the IRS. Will they allow the funds to be regarded as separate from Cyclimas? Because of the nature of non-profits taxation authorities allow some leeway with them and when they start up. We have no idea what representations have been made thus far with the IRS. A reason Brown might be concerned about the fund going from a strict defence fund to an attack fund is that such a motive could impart an expectation of profit. This would make it more difficult to argue non-profit status. It might also be the reason Brown is hesitant to fund any portion of this current activity.
In Canada or Spain? Any taxation in Canada or Spain would result from the transfer into Brown's account. It would appear that any taxation on this event is unlikely -- however, if the transfer were taxable any tax would be over and above any tax paid by the U.S. entity. To be taxable the transfer would have to be characterized as some type of distribution to the receiving entity.
3. Can Brown be forced to disgorge the funds?
We know where the funds are -- this is good. Can we (Kimmage) get them for the purpose for which they were donated? Subject to taxation, legally, yes. Practically? It could cost more than the funds that are there if Brown doesn't co-operate.
All of these issues could have been avoided if competent legal and tax advice had been obtained by all involved at the beginning and not to sort out the mess at the end.
Some of the salient facts are:
1. Donated funds were to support Paul Kimmage in his legal battles with the UCI
2. Funds were placed in a general bank account used for the general business of "Cyclimas" -- it is not clear whether this is a corporate or other form of business account (partnership) but it is located in the United States. The funds therefore became co-mingled with the general revenues of Cyclimas. The account used the Tax Identification Number of Lesli Cohen as its authority. It should be noted that foreigners, e.g. Aaron Brown, can apply for a U.S. TIN but for some reason this was not done.
3. The funds were subsequently transferred to an account or accounts controlled only by Aaron Brown in either or both of Spain and Canada.
4. Cohen and Brown appear to have had a general falling out. It appears that the Kimmage fund is only one of many issues surrounding the two. We do not know why the Kimmage fund issue came into the public at this time and how much it is being used as part of the overall negotiations between the parties.
What are the issues surrounding the funds donated on behalf of Kimmage?
1. Are the funds traceable? The funds went into the general account of Cyclimas and are/were co-mingled with the general revenue of Cyclimas. Fortunately, it appears that the donated funds were easily traceable and if Brown's page shot is to be believed are now held in a segregated account.
2. Are the funds taxable?
In the U.S.? This is the big question. Paypal is required to issue a T1099 - k to any U.S. organization that goes above a certain transaction limit. The Cyclimas account obviously had this level of activity. Where the organization is a non-profit (IRS Code 503) it files its non-profit return, pays no tax, and goes on with life. So if the time had been spent to properly set up the funding vehicle -- no issue. Where the entity is a business it is required to pay tax on its overall income. The IRS, apparently and logically from their viewpoint, has taken the view that all Cyclimas revenue is from business and assessed accordingly.
The big issue is the IRS. Will they allow the funds to be regarded as separate from Cyclimas? Because of the nature of non-profits taxation authorities allow some leeway with them and when they start up. We have no idea what representations have been made thus far with the IRS. A reason Brown might be concerned about the fund going from a strict defence fund to an attack fund is that such a motive could impart an expectation of profit. This would make it more difficult to argue non-profit status. It might also be the reason Brown is hesitant to fund any portion of this current activity.
In Canada or Spain? Any taxation in Canada or Spain would result from the transfer into Brown's account. It would appear that any taxation on this event is unlikely -- however, if the transfer were taxable any tax would be over and above any tax paid by the U.S. entity. To be taxable the transfer would have to be characterized as some type of distribution to the receiving entity.
3. Can Brown be forced to disgorge the funds?
We know where the funds are -- this is good. Can we (Kimmage) get them for the purpose for which they were donated? Subject to taxation, legally, yes. Practically? It could cost more than the funds that are there if Brown doesn't co-operate.
All of these issues could have been avoided if competent legal and tax advice had been obtained by all involved at the beginning and not to sort out the mess at the end.
Dr. Maserati
BANNED
- Jun 19, 2009
- 13,250
- 1
- 0
MarkvW said:
You're right this isn't hard, so it is odd that you keep getting it wrong.
You say the fund was kept in a Cyclismas bank account and that they (I assume Lesli & Aaron) had a duty that the "money was properly handed".
Which is exactly what Leslie did, she checked the account to find some funds moved, her request for further info appears to have been ignored so she contacted Kimmage and contacted a lawyer to get access to the info.
- Mar 13, 2009
- 2,932
- 55
- 11,580
zigmeister said:
Livestrong is an excellent example of this!
I bet Lancey-poo knew where every penny went, even those that didn't end up in his pocket or funding his extravagant lifestyle.
Maybe now he has some free time to counsel others on how to manage charity funds - or has he already given advice to this Brown guy...
Still hoping this will work itself out. I don't see why Brown can't say what is happening even if there is legal action happening. In fact, his opening up should end any legal action if everything is above board.
TRENDING THREADS
-
World Championship 2025: Men’s RR, September 28- Started by Berniece
- Replies: 2K
-
Il Lombardia 2025, monument, October 11- Started by Krzysztof_O
- Replies: 792
-
Teams & Riders The Remco Evenepoel is the next Eddy Merckx thread- Started by DNP-Old
- Replies: 35K
-
Teams & Riders Tadej Pogačar discussion thread- Started by Lequack
- Replies: 40K
-
European Championship 2025: Men’s RR, October 5- Started by Berniece
- Replies: 854
-
Teams & Riders The Great Big Cycling Transfers, Extensions, and Rumours Thread- Started by RedheadDane
- Replies: 13K
-
World Championship 2025: Men’s ITT, September 21- Started by Berniece
- Replies: 942
Facebook
Twitter
Instagram