Informer Janet Novack, William P. Barrett and
Tatiana Serafin, 09.19.05
Shredding Their Taxes?
The Internal Revenue
Service says that three California investors who sold document-destruction
pioneer Insta-shred Security Services to an Australian firm in 2001 used a
sham shelter to avoid taxes on $60 million in capital gains. Sellers
Donald R. Thorne, Issie Rabinovitch and Thomas Dunlap are in the U.S.
Court of Federal Claims fighting the bill plus assessed penalties of up to
40%. The feds say that the men used eight entities they created and a
dubious $64 million loan to increase their tax basis in 2000 and reduce
the resulting gain and taxes due. The trio replies that it was motivated
by "certain asset protection and estate planning
goals." --Janet Novack and William P.
Barrett
No Pillow Talk Here
Former Nashville
Banner publisher Irby C. Simpkins Jr. is in U.S. Tax Court fighting an
IRSclaim that he owes $6 million in back taxes and penalties for 1998.
That's when he sold the 122-year-old afternoon paper to Gannett, which
immediately shuttered it in favor of its morning Tennessean.
Simpkins booked a $32 million gain from the deal. But thanks to a tax
shelter that created $31 million in paper losses--plus other losses--he
reported no taxable income for the year on his return. The feds later
invalidated the shelter as abusive but also ruled that Simpkins' ex-wife,
Peaches Blank, once a Tennessee state official, is an innocent spouse not
liable for extra taxes. --J.N.
Time to Rename It 99 Excuses Only
In two
years shares of California discount retailer 99 Cents Only Stores have
fallen 71% to a recent $10.52, knocking founder David Gold off The Forbes
400 list despite his family's ownership of a 32% stake. One factor: a
botched expansion into Texas. The 225-store chain has yet to file
financials for calendar year 2004 or the first two quarters of 2005,
blaming unresolved issues with auditors over lease and depreciation
accounting likely to require an earnings restatement going back years. The
company "is pleased to invite all shareholders to our annual meeting," the
Web site declares cheerily. Just one problem: The session, normally held
in June, has been delayed indefinitely.
--W.P.B.
The Zagat Guide to Exports--Not!
A country
that opens a new diplomatic mission abroad sees a 6% to 10% increase in
sales to that market, a new study concludes. UC, Berkeley economics
professor Andrew K. Rose looked at exports in 2002 and 2003 from 22
countries to 200 recipient markets. The U.S., whose economy on balance
owes money to other countries, has 239 embassies and consulates, compared
with 301 for tiny Switzerland and 461 for the even smaller Netherlands,
which both have positive balances. Rose used data from restaurant and
travel guides to factor out the possibility that mission locations might
be partly the result of personal preferences of
diplomats. --Tatiana Serafin
Males Have All the Luck
A recent academic
study contends fat workers with company-sponsored health plans pay, in
effect, for much of their own medical care through lower wages. Reviewing
federal data on 6,000 full-time workers from 1989 to 1998, Stanford
researchers Jay Bhattacharya and M. Kate Bundorf find no pay differential
based on avoirdupois at firms without benefits. Overweight women with
health insurance are penalized more than hefty men, the study says,
perhaps partly due to discrimination, but also because women have higher
insurance premiums. --T.S.
How Much of My Tuition Goes to the Corner Office in Old
Main?
The 50-plus college presidents paid
$500,000-plus vary even more when enrollment is considered. Below,
the highest per head. -W.P.B.
COMPENSATION
COMPENSATION
INSTITUTION/PRESIDENT
TOTAL
PER STUDENT
INSTITUTION/PRESIDENT
TOTAL
PER STUDENT
Hamilton College/Eugene Tobin
$1,142,354
$635.70
Stevens Tech/Harold Raveche
$696,965
$153.25
Gallaudet/I. King Jordan
582,668
370.42
Johns Hopkins/William R. Brody
897,786
144.13
Lynn U./Donald E. Ross
540,972
286.08
U. of Tulsa/Robert W. Lawless
509,999
125.25
CalTech/David Baltimore
587,505
270.49
Rice/Malcolm Gillis
602,019
121.40
Trinity U./John R. Brazil
646,842
245.67
RPI/Shirley Ann Jackson
848,057
102.61
Philadelphia U./James Gallagher
601,043
194.32
Bentley College/Joseph G. Morone
516,466
91.04
Compensation may
include one-time payments and accrual of deferred benefits. Sources:
Chronicle of Higher Education; World Almanac; Forbes.
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