The IRS has challenged a set of offshore tax deals set up by the now-infamous AIG Financial Products, according to court records. AIG essentially helped U.S. companies benefit from foreign tax laws for isolated tax payments through offshore banks it owned. Last year, AIG paid $61 million in disputed taxes to the government but now requests a refund, according to the lawsuit. Some of the same companies also made credit default swaps with AIG. IRS Commissioner Douglas Shulman said that the tax transaction “really perverts the foreign tax credit.” (Wall Street Journal)Bad news for Allen Stanford. The CFO of Stanford Financial Group will cooperate fully in the government’s criminal and civil investigations of Allen Stanford and his company, which have been accused of orchestrating an $8 billion Ponzi scheme. Like Stanford, James M. Davis initially asserted his Fifth Amendment right against self-incrimination. But after Davis agreed to cooperate, his lawyer said that Stanford’s scam “has hurt a lot of good people.” The lawsuit named another Stanford Financial executive, Laura Pendergest-Holt on criminal charges for lying to investigators, but she denies any wrongdoing and has not yet agreed to cooperate with investigators. (Wall Street Journal)
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=144620