PC Blog » AIG

AIG Bonus Babies Viewed from ‘Bottom of the Food Chain’

Gary McCarty — Tue, 31 Mar 2009 18:59:39 +0000

Yesterday, we learned that the IRS can conceivably tax even those who returned their bonuses to AIG using the tax law principle of constructive receipt.

Today, there comes to light an e-mail sent this past Friday to AIG employees from someone with the screenname of “Bottom of AIG’s Food Chain.” It generally portrays/betrays the angst felt by AIG employees who had to take pay cuts while execs walked away with millions in bonuses (read it by clicking on the title in quotes).

I’m left wondering if this person is still an employee of AIG’s since it appears that s/he was brazen enough to a) include his/her e-mail address and b) send the angst-driven missive to everyone at AIG.

POSTSCRIPT: After posting this in the morning, I sent off a quick e-mail to the author to ask if s/he wrote it while working at AIG and whether s/he has since been laid off. The answer: “I was, I am on my way to be laid off with about 400 others as we speak. I appreciate you linking our letter to your blog. We waited too late to say something.”

Ouch, Now That Hurts: Returned Bonuses May Be Taxable!

Gary McCarty — Mon, 30 Mar 2009 16:56:33 +0000

A tax law doctrine known as “constructive receipt” could put those AIG employees who returned their bonuses in jeopardy of having to pay taxes on them anyway.

Goes like this: Constructive receipt prevents people from gaming the system, say by performing work in late 2008 and asking to be paid in 2009 to reduce tax liability by shifting it forward. This is a no-no, but obviously it’s pretty easy to get away with if you’re billing others for goods or services and not being paid wages.

Now, this would/could apply to the AIGers if they returned the bonuses with the understanding that they’d re-recieve them when times are better.

The ball is now in the IRS’s court. Let’s see if the Obama/Geithner IRS is a vindictive one.

Bailout Blues: Tax Shelters and Huge Bonu$e$

Gary McCarty — Wed, 21 Jan 2009 18:19:31 +0000

The Associated Press recently reported that 600 executives at the banks just bailed out by the U.S. government took in $1.6 billion in salaries, bonuses and perks last year. That comes to about $2.6 million per exec, but we all know that not all execs are created equal.

Then came this news from the Government Accountability Office (GAO), which searched publicly available data filed with the Securities and Exchange Commission (SEC) and determined that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors maintain subsidiaries in countries generally considered havens for avoiding taxes.

Prominent among these entities are Citigroup, Morgan Stanley, Bank of America and American International Group (AIG), bailout faves of Henry Paulsen. Citigroup alone has 427 tax haven subsidiaries.

The GAO made no determination as to whether these companies actually used their subsidiaries to avoid U.S. taxes, but we all know what the assumption is.