Inside the Tax Shelter Mess

Some very useful questions and answers from Business Week:

Are the deals illegal?
The IRS says so, but the courts have not yet ruled on the matter. The IRS has a mixed record in shuttering such transactions. Under what is known as the economic-substance test, the IRS has claimed that shelter deals done solely to reduce taxes are improper. But federal courts have sometimes ruled that such transactions are O.K., even if they carry no economic risk or opportunity for reward beyond their tax savings.

Newest & very scary report on Gulf of Mexico oil production

Theoildrum.com carries a post on hurrricane damage to oil production facilities in the Gulf of Mexico:

There are MANY production platforms missing (as in not visible from the air). This means they have been totally lost. I am talking about 10’s of platforms, not single digit numbers. Each platform can have from 4 to 100+ wells on it. . . .
We are looking at YEARS to return to the production levels we had prior to the storm. The eastern Gulf of Mexico is primarily oil production…
YEARS, people. I know what this means – hope everyone else gets it too…


Click here to read the full post.

Shadid: Night Draws Near: Iraq’s People in the Shadow of America’s War


The Economist reviews UW Madison grad and Pulitzer Prize winner Anthony Shadid’s (“who speaks Arabic like a native and writes English like an angel”) new book: Night Draws Near: Iraq’s People in the Shadow of America’s War

Much more than these bold facts, however, the average western newspaper reader will not know. It is not easy to understand fully what is going on; still less so to make any accurate predictions about how it will end. Targeted by head-chopping Muslim fanatics, most foreign journalists do not leave the generous, if inevitably jaundiced, embrace of American and British troops. And even those who do must rely heavily on official sources—mostly Americans who are out of touch with the complex and changing world outside their fortress compounds, and who, like their government, have tended also to invent good news where there is none.
Thank goodness, then, for those reporters, both western and Iraqi, who are prepared to take risks in search of a more nuanced reality, among them Anthony Shadid, a correspondent for the Washington Post, whose words begin this article. Mr Shadid, an American of Lebanese descent, who speaks Arabic like a native and writes English like an angel, has put his best reporting into this book. Even-handed and keenly observed, containing just enough (and no more) of the author to suggest a decent man worthy of our trust, it is written for the inexpert but has fresh material for scholars. Mr Shadid calls his work story-telling rather than serious criticism, and so it is. But stories this insightful—of dead Iraqi insurgents and their motivations; of a 14-year-old Iraqi Anne Frank, with extracts from her wartime diary—are more than journalism; they are valuable chronicles.

More on Shadid.

States Expand Push for Internet Taxes

In yet another example of our confused tax system:

Going online to buy the latest bestseller or those photos from summer vacation may be tax free for most people today, but it won’t last forever. Come this fall, 13 states will start encouraging – though not demanding – that online businesses collect sales taxes just as Main Street stores are required to do, and more states are considering joining the effort