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Buffett’s NetJets Is Countersued by U.S. for $366 Million in Unpaid Taxes

Rhapsody1447

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NetJets Inc., the private-plane company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/B), was countersued by the U.S. over $366 million in taxes and penalties.

NetJets in November sued the U.S., saying the federal government had wrongly imposed taxes, interest and penalties totaling more than $642.7 million.

Claiming the federal Internal Revenue Service wrongfully assessed a so-called ticket tax -- an excise tax on payments made in exchange for air transportation -- to private aircraft owners maintaining their own planes, the Columbus, Ohio-based company demanded refunds and abatements.

The federal government, in a revised answer and countersuit filed yesterday in federal court in Columbus, rejected NetJets’ claims and alleged that four of the company’s units owe unpaid taxes and penalties.

NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed.

NetJets had no immediate comment on the countersuit.

Buffett

Refusing the pay taxes on private corporate jets? Man, what a 1% thing to do. Stay classy, Buffet.
 

PerfectStorm

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I thought Buffett was all for paying taxes he owed?
 

Rhapsody1447

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He has the same position as every single American: Pay only the tax you can't legally avoid.

Except this time the whole "legal" part has been thrown into question.
 

roughdraft274

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So Warren Buffet is a terrible person because a company that is owned by his companyis disputing the amount that the government says is owed?

Ya'll need another hobby.
 

Rhapsody1447

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So Warren Buffet is a terrible person because a company that is owned by his company disputes the amount that the government says is owned and is taking completely legal measures to ensure that they don't pay taxes that they don't owe?

Ya'll need another hobby.

He's hardly a terrible person. I actually like the guy. If he wanted to become a national spokesperson for higher taxes perhaps he should have settled the lawsuit over his unpaid corporate taxes first. I'm sure he thinks the government could use the extra $300 million considering his lamentations about the budget deficit.
 

Deuce

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He's hardly a terrible person. I actually like the guy. If he wanted to become a national spokesperson for higher taxes perhaps he should have settled the lawsuit over his unpaid corporate taxes first. I'm sure he thinks the government could use the extra $300 million considering his lamentations about the budget deficit.

It was his company's opinion that those taxes weren't actually owed. Their argument was that these are privately owned and operated aircraft that are therefore not subject to this tax - these people aren't buying tickets, they own the planes.

I personally agree with the IRS, but I'd rather not derail the thread with too much discussion of the merits of subpart K fractional-ownership aircraft. I think the whole operation is a giant exploitation of loopholes and I'm glad the FAA closed most of them.
 

1Perry

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So Warren Buffet is a terrible person because a company that is owned by his companyis disputing the amount that the government says is owed?

Ya'll need another hobby.

You go!!! The 1% need all the defenders they can get.
 

apdst

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So Warren Buffet is a terrible person because a company that is owned by his companyis disputing the amount that the government says is owed?

Ya'll need another hobby.

Um, the government doesn't sue your company because you, "dispute", your tax bill. There's a such-a-thing as tax court and that's where you go to dispute your tax bill. :lamo

The government is sueing his company because...*gasp*...a corporation isn't a person and they can't put a corporation in prison for tax evasion.

This is just another example of Leftist hypocrisy.
 

American

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Warren Buffett is a hypocrite and a shill for the left. You guys can have him.
 

Hatuey

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C'mon liberals want YOU to pay taxes, not themselves.

Lol... you mean... I've been willingly paying taxes an advocating for higher taxation for myself for no reason? Damn it people! This is why we have the Commie-Liberal-Socialist intercom system! I'd like to get the memos for stuff like this!
 

Wiseone

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Um, the government doesn't sue your company because you, "dispute", your tax bill. There's a such-a-thing as tax court and that's where you go to dispute your tax bill. :lamo

The government is sueing his company because...*gasp*...a corporation isn't a person and they can't put a corporation in prison for tax evasion.

This is just another example of Leftist hypocrisy.

The US government isn't sueing NetJets, they are counter sueing. The fact you couldn't get that right makes me doubt your knowledge of the relevant tax law.

Personally I don't know anything about this kind of tax law either, and I couldn't say what my opinion is on how the quote "ticket tax -- an excise tax on payments made in exchange for air transportation" affects the following units of NetJets in the follow amounts, "NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed."

And frankly no one here has the knowledge to make an informed opinion and therefore any opinion making being done is a clearly biased and partisan, and the resulting opinion is obviously one formed of that bias and partisanship and not grounded in fact whatsoever.
 

Prof. Peabody

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Lol... you mean... I've been willingly paying taxes an advocating for higher taxation for myself for no reason? Damn it people! This is why we have the Commie-Liberal-Socialist intercom system! I'd like to get the memos for stuff like this!

Sorry, you should have followed the lead of Tiny Tim Geithner, Tom Daschle, Chuckles Rangel and way to many more to list here
 

Samhain

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Lol... you mean... I've been willingly paying taxes an advocating for higher taxation for myself for no reason? Damn it people! This is why we have the Commie-Liberal-Socialist intercom system! I'd like to get the memos for stuff like this!

Nothing is stopping you from sending everything to the government.

Gifts to the United States
U.S. Department of the Treasury
Credit Accounting Branch
3700 East-West Highway, Room 622D
Hyattsville, MD 20782
 

whysoserious

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Conservatives sure show their hypocrisy here. Buffet is one of those fabled "job creators" but they all hate on him because he leans a different way.

I am surprised you don't all light candles, sing songs, and sacrifice a lamb every time he and his kind are mentioned.
 

Samhain

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The US government isn't sueing NetJets, they are counter sueing. The fact you couldn't get that right makes me doubt your knowledge of the relevant tax law.

Personally I don't know anything about this kind of tax law either, and I couldn't say what my opinion is on how the quote "ticket tax -- an excise tax on payments made in exchange for air transportation" affects the following units of NetJets in the follow amounts, "NetJets Aviation Inc. owes more than $302.1 million, and another unit, NetJets International, is liable for $52.9 million, the U.S. said. Executive Jet Management Inc. owes $10 million while NetJets Large Aircraft owes $1.19 million, the U.S. claimed."

And frankly no one here has the knowledge to make an informed opinion and therefore any opinion making being done is a clearly biased and partisan, and the resulting opinion is obviously one formed of that bias and partisanship and not grounded in fact whatsoever.

The only way they would owe a ticket tax is if they actually sold fares, such as American Airlines. Since its their jets, and they aren't charging anyone to ride them, how can they be selling tickets?

That would be akin to making every car owner pay the rental car excise tax everytime they take their car out of the garage.
 

Deuce

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The only way they would owe a ticket tax is if they actually sold fares, such as American Airlines. Since its their jets, and they aren't charging anyone to ride them, how can they be selling tickets?

That would be akin to making every car owner pay the rental car excise tax everytime they take their car out of the garage.

It might appear that way on cursory inspection, but fractional ownership aircraft companies fall into a bit of a dodgy spot in regulations. On paper, the customers of NetJets "own" a fraction of the airplane. You can buy, say, a 1/16 share in a jet and it gets you X number of flying hours per year on the plane. The pilots are provided for you, you just let the company know where and when and they take you. Originally, this sort of operation fell under the same regulations as your local guy puttering around in his Cessna, because technically the passenger was the "owner" of the plane. This bypassed a LOT of safety rules. (and apparently taxes)

Thing is, what they're really doing is effectively a charter operation. The passengers don't deal with any aircraft management, maintenance, or employment of pilots. They just show up and take a ride. They don't even go on "their" airplane most of the time, while you own a share in a jet, the one you ride on from day to day might be any random jet in the fleet. Charter operations have stricter safety regulations. The more reputable fractional companies already were voluntarily adhering to those standards (NetJets included), but the FAA had to step in and regulate them a few years back.

In short, while on paper they appear to own the airplanes, it's a charter operation in reality. In my personal opinion, they shouldn't be able to avoid the taxes that go with it.
 

Wiseone

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The only way they would owe a ticket tax is if they actually sold fares, such as American Airlines. Since its their jets, and they aren't charging anyone to ride them, how can they be selling tickets?

That would be akin to making every car owner pay the rental car excise tax everytime they take their car out of the garage.

I don't believe its that simple, I know its refereed to as a "ticket tax" but I'm sure there's way more to this tax law then its two word name. If it was that simple, this wouldn't be an issue. Of course I'm just assuming because I don't know what this ticket tax is or what it does and does not apply to.
 

Kreton

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Conservatives sure show their hypocrisy here. Buffet is one of those fabled "job creators" but they all hate on him because he leans a different way.

I am surprised you don't all light candles, sing songs, and sacrifice a lamb every time he and his kind are mentioned.

Yea conservatives are the only hypocrites......riiiiight. (eyes rolling)
 

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If you don't feed it, it will go away.

"Refusing the pay taxes on private corporate jets? Man, what a 1% thing to do. Stay classy, Buffet."

Indeed.
 

Rhapsody1447

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"Refusing the pay taxes on private corporate jets? Man, what a 1% thing to do. Stay classy, Buffet."

Indeed.

I'm still hungry. Feed me more
 

hazlnut

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Buffett

Refusing the pay taxes on private corporate jets? Man, what a 1% thing to do. Stay classy, Buffet.

That's not what the story says.

You should go work for Fox News, masterful spin of a non-story into partisan hackery...

And your 'stay classy' comment is snarky and asinine.
 
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