Official Lance Armstrong Thread: Part 3 (Post-Confession)

[D-Queued]

Dow jones is up over 50% from 2006-2014, but you think it's probable that Lance lost money in the stock market over this period?

It would be highly probable. There was tons and tons of wealth that disappeared. Lots of folks a lot richer, and a lot smarter and more experienced than Lance, who didn't come out very well.

However, how much advise / insight did he get from Wiesel?

Dave.

 

[D-Queued]

Meanwhile in the Qui Tam case.....Oh $hit

News???

Links???

Say more.

Dave.

 

[thehog]

It's delicious, isn't it? He loses and he has to pay back loads more than he ever put in his piggy bank then hope he can qualify for future tax relief through section 1341. There's even problems with that deductibility if what's lost was "ill gotten" gains, which most certainly would be considered as fraud and perjury are in play.

Yeah, he loses this case and I think the fork will have essentially been inserted.

You're confusing what would be classed as expenses and not what simply gets deducted from income. It's not liner in that fashion. Agent fees, doctors, masseurs etc. are legitimate business related expenses which are tax deductible. Whilst I don't think Armstrong's balance sheet is legitimate one wouldn't pick out random expenditure and subtract it from a gain like SCA. That's not how it works. Taxes due are offset by expenditure in totality in a given tax year. And more often than not expenses are paid in kind by the income stream.

Basic accounting and you know this stuff better than most.

 

[thehog]

News???

Links???

Say more.

Dave.

Yes, links? Do you think there might be a link?

 

[Bluenote]

Yes, links? Do you think there might be a link?

Not sure why the mods allow this repeated baiting of RR. Didn't you all just serve a ban for fighting?

Maybe RR's point was straightforward.
Qui Tam =oh $hit
Qui Tam = $, as in big dollars

I think it's pretty well documented the kind of cash the Feds are looking for.

 

[Alpe73]

Not sure why the mods allow this repeated baiting of RR. Didn't you all just serve a ban for fighting?[/QUOTE

"Get Rhythm"

 

[Scott SoCal]

You're confusing what would be classed as expenses and not what simply gets deducted from income. It's not liner in that fashion. Agent fees, doctors, masseurs etc. are legitimate business related expenses which are tax deductible. Whilst I don't think Armstrong's balance sheet is legitimate one wouldn't pick out random expenditure and subtract it from a gain like SCA. That's not how it works. Taxes due are offset by expenditure in totality in a given tax year. And more often than not expenses are paid in kind by the income stream.

Basic accounting and you know this stuff better than most.

Uh, ok. That's not what I'm talking about.

Rules for section 1341 are pretty clear. LA may not be able to reduce his taxable income by the amount he paid in income tax on the original bonus if the gain is considered ill gotten.

It might go something like this:

Received about 5.5m after fees. Pays about 1.6m in fed tax. Pays bills RR refers to from the remaining 3.9m.

So his after tax was 3.9m. Let's say he loses and has to pay SCA significantly more than that in 2015 in after tax dollars. In that tax year he may not be able to reduce his taxable income by the 1.6m he paid in tax on the original award due to 1341 rules.

Ouch.

 

[Alpe73]

Not sure why the mods allow this repeated baiting of RR. Didn't you all just serve a ban for fighting?

"Get Rhythm"

 

[thehog]

Uh, ok. That's not what I'm talking about.

Rules for section 1341 are pretty clear. LA may not be able to reduce his taxable income by the amount he paid in income tax on the original bonus if the gain is considered ill gotten.

It might go something like this:

Received about 5.5m after fees. Pays about 1.6m in fed tax. Pays bills RR refers to from the remaining 3.9m.

So his after tax was 3.9m. Let's say he loses and has to pay SCA significantly more than that in 2015 in after tax dollars. In that tax year he may not be able to reduce his taxable income by the 1.6m he paid in tax on the original award due to 1341 rules.

Ouch.

Think you're still missing it.... I get what you're saying but you don't apply random bills to the SCA credit.

There would be several revenue streams in total not just SCA. And you don't apply tax to the one gain of SCA, tax is applied as a whole to the legal entity with relevant expenditures subtracted from the income to provide the total tax liability, be it Tailwind or Lance Armstrong Inc. or whatever.

And one should note that an individual will take a salary or dividends from the legal entity and not record all credits as a taxable income against themselves.

Perhaps something like this; (this is for basic illustrative purposes, reality would suggest its much more detailed).

Lance Armstrong holdings:

Credits:

Nike $5m
Nissan $5m
SCA $7m
Salary USPS: $5m
Race winnings $5m

Total $27m

Expenditure:

Insurance polices: $2m (including SCA policy)
Agent fees: $5m
Doctors/masseur: $5m
Private Jet: $3m
Staff salaries: $8m
Donations: $2m

Total $26m

Taxable income: $1m


This is how companies run themselves. Individual do similar to reduce their tax liability. Australians are well familiar with the concept of negative gearing.

My guess is Armstrong would pay himself a salary and not accept sponsorship payments & credits into his own name. No sportsman would do that. That's why Wiggins had his company offshore to avoid tax, Beckham etc. all have done similar.

It's fairly straightforward.

 

[Race Radio]

News???

Links???

Say more.

Dave.

As expected there is a big fight over discovery. Some of it is kinda funny, like Lance claiming Attorney-Client privilege for evidence related to Stapleton....even though he was not a licensed attorney. Or that terms like Doping and Thomas Weisel are too broad.

They claim CSE is not aware of any actions by CSE to discourage or deter any individual from talking about doping.....guess they forgot that Stapleton-Frankie discussion

Also interesting they have some specific discussions they want info on. A discussion with A Coca-Cola Representative, another with the head of Discovery Channel

There are some very pointed questions about who in the Government knew about doping......with a vague, obstructed, response from lance. In fact anything they don't want to respond to they claim it is "Vague"

I do like the "We replaced our sever in 2005 and have no emails from prior to 2005" excuse.

I could go on but if anyone is interested in 180 pages of obstruction here it is
http://www.scribd.com/doc/238755744/Discovery-Fight

 

[ChewbaccaD]

Yes, links? Do you think there might be a link?

Not sure why the mods allow this repeated baiting of RR. Didn't you all just serve a ban for fighting?

Maybe RR's point was straightforward.
Qui Tam =oh $hit
Qui Tam = $, as in big dollars

I think it's pretty well documented the kind of cash the Feds are looking for.

"Get Rhythm"

As expected there is a big fight over discovery. Some of it is kinda funny, like Lance claiming Attorney-Client privilege for evidence related to Stapleton....even though he was not a licensed attorney. Or that terms like Doping and Thomas Weisel are too broad.

They claim CSE is not aware of any actions by CSE to discourage or deter any individual from talking about doping.....guess they forgot that Stapleton-Frankie discussion

Also interesting they have some specific discussions they want info on. A discussion with A Coca-Cola Representative, another with the head of Discovery Channel

There are some very pointed questions about who in the Government knew about doping......with a vague, obstructed, response from lance. In fact anything they don't want to respond to they claim it is "Vague"

I do like the "We replaced our sever in 2005 and have no emails from prior to 2005" excuse.

I could go on but if anyone is interested in 180 pages of obstruction here it is
http://www.scribd.com/doc/238755744/Discovery-Fight

I love it when the monkeys start howling about RR's access to things they don't have. Here is a video of it: https://www.youtube.com/watch?v=-dMoK48QGL8

 

[Race Radio]

*deleted by mod*

What was your opinion on the filing? I could barely get through 1/2 of it before falling asleep. It seems like every response is to pretend that the request is vague or too broad. The government asked for information on CSE board meetings......lance's lawyers said the term "Board Meeting" was vague and too broad.

Judges have slapped down his legal filings in the past. Doubt the court will look kindly on this one.

 

[thehog]

I stand corrected! A link!

And a public document as well! I apologise for lack of distrust. Track record speaks for itself.

 

[ChewbaccaD]

I stand corrected! A link!

And a public document as well! I apologise for lack of distrust. Track record speaks for itself.

In comparison, yes, yes it does....

 

[ChewbaccaD]

Ha! Monkey do like to toss stuff when they are bored.

What was your opinion on the filing? I could barely get through 1/2 of it before falling asleep. It seems like every response is to pretend that the request is vague or too broad. The government asked for information on CSE board meetings......lance's lawyers said the term "Board Meeting" was vague and too broad.

Judges have slapped down his legal filings in the past. Doubt the court will look kindly on this one.

From what I know (which is limited as it relates to discovery), it looks pretty standard for something like this. Lance (via his attorneys) wants to limit what they send because of the value all of it will have to the government. The problem is that they aren't fighting a local lawyer with little to no staff. They are delaying, and there will be some back and forth about it, but from what I read, nothing too unusual...especially considering what is at stake for Wonderboy.

 

[thehog]

In comparison, yes, yes it does....

I'm not following where the "oh $hit" gets applied but oh well.

I think you're analysis is about right though.

 

[MacRoadie]

I'm not following where the "oh $hit" gets applied but oh well.

I think you're analysis is about right though.

I believe it is applied as in "Oh $hit, while we're all busy here looking at the SCA arbitration and how much it's going to cost LA, let's not forget the qui tam case is still plowing along quite nicely, despite some rather pathetic efforts to derail it".

 

[Scott SoCal]

It's fairly straightforward.

As is your willingness to clog the toilet.

If LA has to pay back income from prior years it will be considered last in. Taxed at the highest bracketed rate at the time. If you want to argue he paid very little in tax that year then go for it.

Assuming he had any federal tax load that year and assuming the SCA bonus was last in there may very well be income tax paid that he will not be able to deduct from a current tax year if he has to pay the "ill gotten" income back. It's more than a double whammy.

Good post SoCal.

 

[Race Radio]

I believe it is applied as in "Oh $hit, while we're all busy here looking at the SCA arbitration and how much it's going to cost LA, let's not forget the qui tam case is still plowing along quite nicely, despite some rather pathetic efforts to derail it".

Yup. Didn't have anything to do with the rambling babble about SCA. I thought the 180 pages of "Not following, me confused" was an impressive amount of billable hours and obfuscation. Add in some testy emails from either side and it is clear this is going to be a loooong, hard fight. Lance has some big time lawyers and they have made it very clear they are going to fight this hard to the end.

 

[MacRoadie]

Yup. Didn't have anything to do with the rambling babble about SCA. I thought the 180 pages of "Not following, me confused" was an impressive amount of billable hours and obfuscation.

It's the Unfrozen Caveman Lawyer defense...again.

Unfrozen Caveman Lawyer

 

[ChewbaccaD]

It's the Unfrozen Caveman Lawyer defense...again.

Unfrozen Caveman Lawyer

Thank you, that is priceless!

 

[thehog]

I believe it is applied as in "Oh $hit, while we're all busy here looking at the SCA arbitration and how much it's going to cost LA, let's not forget the qui tam case is still plowing along quite nicely, despite some rather pathetic efforts to derail it".

True.

Important also to correct some of the more rudimentary accounting errors being posted. Some folly amongst it.

I'll read over the QT documents tonight, if I get a chance.

 

[Race Radio]

Lance Armstrong holdings:

Credits:

Nike $5m
Nissan $5m
SCA $7m
Salary USPS: $5m
Race winnings $5m

Total $27m

Expenditure:

Insurance polices: $2m (including SCA policy)
Agent fees: $5m
Doctors/masseur: $5m
Private Jet: $3m
Staff salaries: $8m
Donations: $2m

Total $26m

Taxable income: $1m

You forgot the part about him putting $7.5 million into a "High interest bank account"

Which is it, Lance offsets his income with inflated expenses so he does not have to pay taxes or the entire settlement was stashed away, earning him millions? Can't have both.

 

[Race Radio]

As is your willingness to clog the toilet.

If LA has to pay back income from prior years it will be considered last in. Taxed at the highest bracketed rate at the time. If you want to argue he paid very little in tax that year then go for it.

Assuming he had any federal tax load that year and assuming the SCA bonus was last in there may very well be income tax paid that he will not be able to deduct from a current tax year if he has to pay the "ill gotten" income back. It's more than a double whammy.

Good post SoCal.

Good post SoCal.

Some around here would like us to think that Lance not only had magical abilities on the bike but also magical accounting abilities.

 

[thehog]

As is your willingness to clog the toilet.

If LA has to pay back income from prior years it will be considered last in. Taxed at the highest bracketed rate at the time. If you want to argue he paid very little in tax that year then go for it.

Assuming he had any federal tax load that year and assuming the SCA bonus was last in there may very well be income tax paid that he will not be able to deduct from a current tax year if he has to pay the "ill gotten" income back. It's more than a double whammy.

Good post SoCal.

Not such a good post to be honest. Because I'm not arguing Armstrong's tax position. I'm just correcting the method being applied from yourself & others. You're simply creating a basic ledger and subtracting arbitrary A, B & C expenses from D. It's not how tax is applied. You're just trying to overcome the basic premise that if he hands back the money to SCA he's not actually losing. The most likely scenario is that he gains. But we will have to wait and see what comes in October & beyond.

The rest of what you wrote makes no sense. Whether the SCA money arrived in Jan or December tax it's applied at the next return, withholding amounts withstanding. Generally paid quarterly. You know that.

Basic tax principle 101:

Taxable income is gross income less exemptions, deductions, and personal exemptions. Gross income includes "all income from whatever source". Certain income, however, is subject to tax exemption at the federal and/or state levels. This income is reduced by tax deductions including most business and some nonbusiness expenses.