Judge Rules a Tax Shelter in KPMG Case Is Legitimate

Lynnley Browning:

The heart of Judge Ward’s ruling was that the I.R.S.’s retroactive use of tougher Treasury Department rules in 2003 on liabilities like those in Blips was “ineffective” and “not enforceable” because it was retroactive. The Internal Revenue Code generally prohibits retroactive regulations. The I.R.S. said in 2000 that it would formally challenge Blips deductions claimed by taxpayers.

Jerrold Cohen, a lawyer in Atlanta for Mr. Nix and Mr. Patterson, said yesterday that Judge Ward’s ruling showed that “the government isn’t allowed to change the rules just because it doesn’t like the result.”

Great example of the mess that is our tax system. The Opinion (PDF).

Stressed Air Travel System?

Flying around recently, amid full planes, high fuel prices, employees who have endured some tough years and challenging weather, it seems to me that the airlines, while trying very hard to make money, are really stretching their employees and systems. Juggling planes and tickets amid cancellations and delays one night, I ended up on a 777. Passengers boarded the full flight, were instructed to close the overhead bins and buckle up. Minutes before departure, the steward announced that there were no pilots. They would be arriving in 45 minutes and we were free to get off the plane….. The steward, when asked, mentioned that they just found out about this (no pilots! – seems odd in 2006 that they were not aware that the pilots were not around, what with elaborate crew and equipment management software). I grabbed my bags and ran over to my prior, delayed flight, swapped tickets and was later on my way.

This, and other recent examples make me wonder how far the airlines can push their systems and people…. I also noticed a number of rather rude passengers along with some great, hard working airline employees.

MGE Email on Thursday’s Power Outages

Via an MGE email (responding to my email notifying them of our power outage):

MGE projects that most customers reporting an outage will have electricity restored yet today. Some customers may not be restored until Friday.

For crew safety, work will stop at 11 p.m. tonight and resume early Friday morning.

Fifteen crews from Milwaukee and Green Bay are helping MGE. Crews report extensive damage and a massive number of trees down on power lines in the service area. Most of the restoration at this point involves working at individual sites—clearing trees and branches, in some cases setting new poles and then reestablishing power.

If your lights are still out and you have not reported the outage, please call the MGE customer center at 252-7111.



Madison Gas & Electric Company


I’ve been critical of MG & E in the past (highest rates in the state and political payoffs). I’m glad they are using email to communicate with their (mostly captive) customers. Interestingly, I’ve not seen any mention of the outages on their website. Fortunately, they’ve done a nice job getting power back on.

Air Sickness Bag Advertising

John Moore:

But US Airways must be kidding when a company spokesperson says, “The airsick bag is not used like it was in the past — primarily with turbo-prop aircraft and cabins that weren’t pressurized — so the negative connotation of the sick sack has gone away.” Now that line makes this marketer wanna reach for a barf bag.

Teletruth Letter to the Judge Regarding the SBC/AT&T and Verizon/MCI Mergers


Teletruth believes there exists an inherent contradiction in representations of the SBC-AT&T and Verizon-MCI mergers in the complaints and consent decrees filed by the DOJ October 27, 2005.

The complaints note broad competition. For example – “SBC and AT&T compete in the sale of wireline telecommunications services to retail and wholesale customers in the United States.” The complaints note particular concern about Local Private Lines. For example – “the proposed merger is likely to substantially reduce competition for Local Private Lines and telecommunications services that rely on Local Private Lines to those buildings.” The DOJ believes the magnitude of these concerns provides sufficient justification to block the mergers. For example – “that Defendants be permanently enjoined and restrained from carrying out the Agreement and Plan of Merger dated January 30, 2005.”

A Look at the UW’s “Broad” Stem Cell Patents

Antonio Regalado & David Hamilton:

The broadly worded patents, which cover nearly any use of human embryonic stem cells, are held by the Wisconsin Alumni Research Foundation, a nonprofit group that handles the school’s intellectual-property estate, managing a $1.5 billion endowment amassed during 80 years of marketing inventions.

John Simpson, an official at the foundation bringing the challenge, says WARF’s efforts to enforce its patents are “damaging, impeding the free flow of ideas and creating a problem.” Mr. Simpson’s group got involved in the dispute earlier this year after Wisconsin officials said they would demand a share of state revenue from California’s voter-approved stem-cell initiative.

WARF doesn’t charge academics to study stem cells, but it does ask commercial users to pay fees ranging from $75,000 to more than $250,000, plus annual payments and royalties. So far, 12 companies have licensed rights from WARF to use the cells, and more than 300 academic laboratories have agreements to use the technology without charge. WARF spokesman Andy Cohn declined to say how much the organization has earned from the patents so far but says it is less than what it has spent funding stem-cell research and paying legal costs.

The Future of America Forecasts, Part 2

“Fabius Maximus”:

orecast #3: the death of the US Constitution.

The Constitution was originally designed to specify the duties for each of America’s three branches and to limit their powers. Its ability to do the latter function has faded rapidly since the New Deal. Already most of the Bill of Rights remain de jure in force but are de facto void, as can be seen by a Lexis search of successful attempts to use them in litigation – you’ll find almost none.

At some point soon the Constitution will become a purely procedural document, much like that of the former Soviet Union, and equally effective at preserving our liberties. Our rights will exist only on the sufferance of our government and our ruling elites. This is already true in the UK, as the “unwritten constitution” protecting the “rights of Englishmen” has blown away like smoke in the wind.