Christmas Trees and Christmas “Gifts”

It has been decades since I learned the meaning of “Christmas Tree legislation.” It was when I was working in Washington, D.C., dealing with tax issues. During a discussion about some tax legislation proposed by a special interest group, someone commented to the effect that another Christmas tree bill was being constructed. Though there is some dispute about who first coined the phrase, the Senate now provides this definition: “Informal nomenclature for a bill on the Senate floor that attracts many, often unrelated, floor amendments. The amendments which adorn the bill may provide special benefits to various groups or interests.”

Though Christmas tree legislation can pop up at any time during the year, it seems fitting that this year’s version was enacted shortly before Christmas. It is the Consolidated Appropriations Act of 2021. The bill consists of 5,593 pages. As often is the case with Christmas tree legislation, members of Congress were asked to vote on the bill before they had an opportunity to read it. The excuse for this nonsense is that Congress was up against a deadline, but the reason Congress was up against a deadline was its failure to give itself enough time because playing partisan politics is a priority for most of the members.

So let’s explore what sort of surprise gifts were left by Santa for the special interest groups. I’m not referring to the provisions in the legislation that were expected and that are relevant to the purpose of the legislation, provisions dealing with stimulus checks, unemployment compensation supplements, small business loans, grants to closed venues, school funding, rental assistance and money for vaccine acquisition and distribution. I’m referring to things such as

• Restoration of a full deduction for corporate business meals, ostensibly to help restaurants but which is unlikely to increase the amount of food and drinks consumed during corporate business meals though cutting taxes for taxpayers in a position to benefit from corporate business meals
• Creating two new museums at the Smithsonian
• Establishing safety standards for portable fuel containers
• Expansion of the Saguaro National Park and creation of a new national park in West Virginia
• Money for the Space Force
• The naming of a mountain as Miracle Mountain because a wildfire burned itself out on the mountain before reaching Elk Ridge City
• Repeal of criminal penalties for transporting water hyacinths, alligator grass, and water chestnut plants across state lines
• Repeal of criminal penalties for unauthorized use of the Swiss coat of arms, the 4-H Club emblem, the Smokey Bear character, the Woodsy Owl character, and the Golden Eagle insignia
• New horse racetrack safety standards and creation of a horse racing anti-doping program
• Prohibiting the use of the United States Postal Service for delivering electronic vaping products
• Requiring carbon monoxide detectors in public housing
• Statements of policy with respect to Tibet, including the succession or reincarnation of the Dalai Lama
• Statements of policy with respect to Belarus
• Increased penalties for illegal streaming

There are others, but these should be enough to demonstrate why the legislation requires thousands of pages.

It is important to understand that I am not suggesting these are bad provisions. For example, it makes good sense to require carbon monoxide detectors in public housing. It doesn’t hurt to have a new national park. Nor am I suggesting that all of these provisions belong in federal legislation, and readers surely can identify several that ought not be distracting Congress when it has more important business to handle. My point is that these provisions that are unrelated to each other should be the subject of separate bills so that they can be evaluated independently. Instead, fearful that a provision will not get enacted when standing alone, sponsors, acting on behalf of special interest groups, threaten to withhold support for important legislation unless their gift to the special interest group is included. It’s the equivalent of saying, “I will vote for this important legislation only if you give me, in that bill, an additional provision that deals with a subject unrelated to the purpose of the legislation and that probably could not get enacted on its own.” There’s a name for that, when someone gets a “gift” to do something. It’s an awful way to do business, and it contributes to the legislative logjams that disadvantage most Americans. When allegiance to party and allegiance to pet projects take priority over responsibility to the entire nation, only the grinches celebrate.

Tax and Spending Hypocrisy

Three years ago, the Congress, or more specifically, the Republican members of Congress, didn’t flinch when they enacted a tax bill that gave crumbs to most people while serving up gourmet million and multimillion dollar tax breaks to their wealthy friends, and, in some instances, to themselves. So what that the tax break giveaway for the wealthy and large corporations would add more than a trillion dollars to the federal deficit? What happened to those Republicans who once upon a time advocated a balance budget amendment and complained loudly whenever proposed legislation threatened to enlarge the deficit? Well, they’re still around, but they reserve their deficit increase fears only when the workers stand to benefit from legislation.

Here is an example. Back in 2017, as reported in various news outlets, including this story, Senator Ron Johnson, a Wisconsin Republican, “cut a deal with Senate leadership” to become the deciding 50th vote for that ill-advised 2107 tax legislation. Johnson, who had been a staunch opponent of increasing the deficit, tossed aside concerns about the impact of the legislation on the deficit because, he claimed, the legislation would generate enough growth to offset the deficit increase. Aside from that claim defying mathematical possibility, it didn’t happen, and it would not have happened with or without the pandemic, because it is just more nonsense from the supply side economic policy and trickle down theory crowd. The deal that Johnson cut expanded tax breaks for certain pass-through entities, including those in which Johnson, a multimillionaire, owns interests. In other words, the deal cut by Johnson provided a tax break for Johnson and his wife.

So that happens all the time in the Congress. What’s the big deal? Last Friday, in a bipartisan effort to break the COVID relief logjam, Senators Bernie Sanders of Vermont, an independent who usually lines up with Democrats, and Josh Hawley, a Republican from Missouri, offered a compromise for which they requested unanimous consent. Unanimous consent moves legislation through the Senate more quickly than the usual process. But they didn’t get the unanimous consent. Why? Because Johnson, the guy who back in 2017 tossed off deficit increases as nothing to worry about, blocked the unanimous consent request, twice. According to this report, Johnson explained that he did not support assistance to individuals, though he still advocates assistance to businesses, because he is “concerned about our children's future. ... We do not have an unlimited checking account.” Oh, really? And that wasn’t an issue in 2017?

Back in 2014, I wrote, in Why Do Those Who Dislike Government Spending Continue to Support Government Spenders?:

There’s something not quite right in the collective psyche of the anti-government-spending crowd. Enraged by high taxes, they manage to put into office, and keep in office, people who dish out tax revenues as though there were no limits on taxation. Of course, the tax breaks go to those who are in least need of economic assistance. Their excuse, that they will use the tax breaks to help those in need, is hilarious, because the best way to help those in need is to direct assistance directly to them so that they can infuse those dollars into the economy. That makes the economy grow. Handing tax dollars to those who don’t need financial assistance is nothing more than helping some people grow their Swiss bank stash.

I followed that quote with this reaction, in When Those Who Hate Takers Take Tax Revenue:

At what point will enough voters see through the con game and send packing the takers who took over political control by demonizing takers? When will political hypocrisy disappear? At what point will people realize that economic growth consists of creating something of economic value and not simply moving jobs from one place to another?

The answer to my bolded, and perhaps bold, question is, “Unfortunately not yet.”

Johnson and his ilk definitely prove the observation that Republicans don’t like deficit spending unless it arises from handing out tax breaks to the wealthy. When it comes to assisting the vast non-wealthy segment of the nation’s population, these politicians cringe at the thought of letting the deficit grow. And here is news for Johnson: If you had not enacted that foolish 2017 tax legislation, the nation would be in better financial shape to meet the economic needs of those who are suffering. What is sad is that so many people deeply in need of help continue to vote for Johnson and politicians like him. They remind me of the abused spouse who complains and seeks sympathy but goes back to the abuser, repeating this behavioral pattern until tragedy strikes. How many more times will the help-the-wealth-the-poor-be-damned politicians get votes and support? How many more times until the tragedy that strikes is irremediable?

Fraudulent Tax Return Preparation for Clients and the Preparer

When tax return preparers get into trouble, it’s almost always because they falsify client returns or invent fake clients in order to get fraudulent refunds. I have written about these situations in posts such as Tax Fraud Is Not Sacred, Another Tax Return Preparation Enterprise Gone Bad, More Tax Return Preparation Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, and Tax Return Preparer Fails to Evade the IRS.

But now comes a case in which the preparer not only prepared and filed false returns for clients, but also failed to report as income the fees collected from the clients. According to this this Department of Justice report, a tax return preparer in Portland, Oregon, pleaded guilty to 13 counts of preparing and filing false and fraudulent tax returns for clients and four counts of filing false income tax returns for herself, after having been indicted on 25 total counts. The counts were based on preparation activities from 2015 through 2018, and involved 1,196 fraudulent returns prepared for about 629 clients. These returns generated about $3 million in false tax refunds. In the meantime, the preparer failed to report any business income from preparing returns for the years 2014 through 2017.

The preparer ran the business from her home, and advertised that she would obtain the “Biggest Refund Guaranteed.” The refunds were computed by using false filing statuses, false credits, and false tax schedules.

It’s no secret that there are tax return preparers who do not comply with the tax laws. It’s no secret that they get caught. It’s no secret that they are indicted and either plead guilty or are convicted. Yet there are tax return preparers who continue to prepare and file false returns. Given the eventual outcome, why do they do this? Yes, there are people who think they can “get away” with a crime, but when the activity leaves a paper trail, it makes it too easy for the IRS and Department of Justice to discover the reality.

Bribing the Tax Collector: Bad Outcomes on Both Sides of the Deals

The headline to this story caught my eye: “2 women charged with bribing former DeKalb tax official.” I thought to myself, what happened to the bribe recipient? So, it was time for more research.

According to this earlier article, back in March, a former supervisor in the DeKalb County Tax Commissioner’s Office was charged with bribery and blackmail. He allegedly received more than $30,000 in bribes to register vehicles that did not qualify for registration. Over a 28-month period, he registered vehicles that had failed emissions tests or that were owned by people lacking valid drivers’ licenses. His “fees” ranged from $100 for vehicles failing the emissions tests, $200 for vehicles owned by people without valid drivers’ licenses, and between $500 and $1,000 for vehicles for which people did not have titles or tag applications.

When he confessed to the FBI that he had accepted the bribes, he was fired by the Commissioner’s Office. Shortly thereafter, the former supervisor met with an individual who did not know he had been fired and who provided the former supervisor with money and paperwork to register non-qualifying vehicles. Several days later, the individual asked for a return of the money and paperwork, but the former supervisor tried to persuade the individual to give him more money in exchange for his not disclosing to the FBI the individual’s involvement in the scheme.

In July, according to this article, he pleaded guilty to the bribery and blackmail charges. He was sentenced to two years in prison and three years of supervised release.

According to the article whose headline caught my eye, earlier this month two women who had bribed the former supervisor were indicted on charges of fraud and bribery. They bribed the supervisors because they lacked valid licenses. According to the indictment, they gave him thousands of dollars in $200 bribes over a 6-month period.

The moral is simple. The price paid in trying to avoid paying taxes, fixing a vehicle’s emissions system, getting a drivers’ license or a valid vehicle title, can be far more than the cost of doing what should have been done. What is the financial cost of serving a prison sentence? As for taking bribes, is a bit more than $30,000 worth two years?

I am guessing that there are some other people in DeKalb or nearby counties who have read or will read the same story I did. I am guessing that at least some of them are now wondering if and when there will be a knock on the door.

It’s Not Just Sports Franchise Owners Grasping at Tax Breaks

Time and again I have written about my opposition to the use of tax breaks to finance construction of facilities for, or operations of, professional sports franchises owned by wealthy individuals. Even though these individuals claim that they deserve tax breaks because they are doing something that is “good for the public,” their reasoning would support tax breaks for almost everyone, thus destroying government and civilization. I have explained this tax break grab game in posts such as Tax Revenues and D.C. Baseball, four years ago in Putting Tax Money Where the Tax Mouth Is, Taking Tax Money Without Giving Back: Another Reality, and Public Financing of Private Sports Enterprises: Good for the Private, Bad for the Public, Taking and Giving Back, If You Want a Professional Sports Team, Pay For It Yourselves; Don’t Grab Tax Dollars, Is Tax and Spend Acceptable When It’s “Tax the Poor and Spend on the Wealthy”?, Tax Breaks for Broken Promises: Not A Good Exchange, Tax Breaks for Wealthy People Who Pretend to Be Poor, and When One Tax Break Giveaway Isn’t Enough.

But, of course, it’s not just sports franchise owners who pretend to be poor while they seek tax breaks that ultimately burden those who aren’t wealthy. Sports franchises get attention because they are so often in the public spotlight, and gather interest from a significant portion of the public. An example of the scope of the “we are wealthy but pretend we can’t survive without tax breaks” game has popped up in Biloxi, Mississippi. According to this story, the developers of a resort featuring a hotel, casino, and conference center have come begging to the city council not only for forgiveness of half of the ad valorem tax on the project for five years but also a kickback of 10 percent of the city’s share of casino license fees for five years. A parallel request is being made to Harrison County, in which Biloxi is located. And while this is going on, the developers of another casino wants public financing assistance, though tax increment financing bonds, for infrastructure improvements. Back in June the city council approved a tourism tax rebate for that project.

The developers want these tax breaks “to entice investors to support” the project. Of course, they claim that they will be creating jobs. Isn’t that true of anyone who wants to start or continue a business, construct a building, or initiate any other public activity. So why doesn’t a plumber, for example, who wants to expand the business and hire several employees, thus creating jobs, get a tax break? My guess is that the plumber lacks the resources to “persuade” politicians to dish out tax breaks for the plumbing business. Remember that quip from Leona Helmsley? "We don't pay taxes; only the little people pay taxes."

Perhaps a factor in the tax break request is the increase in the proposed cost of the resort from $400 million a year ago to $700 million now. So how does the cost of a project almost double in a year? Doubling of wages paid to the construction workers? Hardly. Doubling of materials costs? Very unlikely, and even a doubling of materials costs would not double the cost of the project. Adding more features and frills? Perhaps. The solution, of course, would be to scale the project back down to what it was, just as many Americans without jobs are scaling back their expenditures. Or could it be that funds are being funneled into other projects outside of Biloxi? Maybe. Maybe not. But surely if I were sitting on Biloxi Council, I would want to know why a developer who easily doubles the cost of the project can’t afford to pay taxes.

As for the “to entice investors to support” the project excuse, it’s nonsense. Here is how truly free capitalism, which doesn’t exist in this country, works. A developer proposes a project. If it’s a home run, investors flood the developer’s inbox and voicemail. If it’s a pretty good idea, enough investors show up. If an insufficient number of investors or investment dollars show up, then it’s a project not worth pursuing.

As much as I enjoy watching professional sports, and even though I have stopped in several Las Vegas casinos from time to time, those are not essential functions of society and do not deserve tax breaks, especially when taxpayers are lining up at food banks, facing eviction, and losing jobs. Public dollars, that is, money paid by taxpayers, should be put into facilities and projects over which the public, not oligarchs, have control. The price for public money, whether tax breaks or kickbacks of fees, should be public control. I am confident the tax break seekers would recoil at that thought.

A Better Alternative to a Wealth Tax?

Last week, in Learning About Wealth Taxes By Watching What Happens in Argentina, I pointed out some of the administrative drawbacks to wealth taxes. I also noted that I would prefer a “repayment tax,” which would require taxpayers who received tax breaks based on promises of job creation or similar society-benefitting activity to repay those tax breaks to the extent that they did not fulfill those promises. Now comes news that the United Kingdom’s Wealth Tax Commission is proposing that individuals holding wealth of 2 million or more pounds pay one percent of their wealth for each of five consecutive years. The proposal raises the same administrative issues that plague any wealth tax.

While thinking about the proposal, it struck me that a wealth tax could hurt individuals who are in fact creating jobs or engaging in society-benefitting activities. For example, consider a fairly new business focused on a new technology that benefits most people. The business hires thousands of workers. It plows profits back into the business, with its 10 owners taking sustenance salaries. Because of its success and promising future, the company’s value is very high. Does it make sense to require the 10 owners to pull money out of the company to pay a wealth tax? Worse, a company or trust that has accumulated great wealth because of previous tax breaks, and that is doing little or nothing to create jobs, and perhaps has even reduced the number of employees, can easily pay the wealth tax because it is just a tiny fraction of the tax breaks and earnings accumulated on those tax breaks.

After considering this and similar examples, I have become an even stronger advocate of the repayment tax. Two steps are necessary. The first is to identify taxpayers, including trusts and corporations, that received tax breaks. That information is easily calculated by the IRS or equivalent revenue departments. The second is to determine whether those taxpayers used those funds to hire workers, or to engage in society-benefitting activity, or instead stashed their tax breaks in assorted “piggy banks.” This step is what would generate opposition, or at least strong criticism, of the repayment tax. How does one determine if a taxpayer failed to provide jobs? That, to me, is easy. Look at the track record. Identify the tax-break-receiving corporations and businesses that cut jobs after getting tax breaks, or whose employment did not increase. How does one define society-benefitting activity? Tax break recipients can argue that if they invest their tax breaks in banks, that allows banks to increase the amount of loans they make to people needing money either to live or to start the sort of company I described in the preceding paragraph. But what if they spent their tax break on a yacht manufactured in another country? What if the tax break funds are invested in an offshore, or domestic, tax shelter? These concerns encourage wealth tax advocates to continue pushing for wealth taxes.

The dilemma, of course, is the typical situation in which the solutions for solving a problem are much more difficult to craft than the prevention steps that could and should have been taken to prevent the problem in the first place. Over the past four decades, as wealthy individuals, their lobbyists, and their “persuaded” legislators have pushed for, and received, tax breaks, those with a better sense of the situation warned that among the dangers of stripping governments of resources was the distinct possibility that the day would come when the government needed resources and had no ready-to-implement mechanism in place to deal with the crisis. When the crisis is one exacerbated by the income and wealth inequality exacerbated by the adoption of discredited supply-side economics and trickle-down theories, the situation becomes dire. It won’t be easy to undo those mistakes, and some of those who reaped the benefits of those errors aren’t around to remediate their windfalls. But as difficult as it will be to claw back unwise tax breaks, it must be done. The alternatives are few and unpromising.

Not That More Proof Is Needed, But Here’s Another Example That Taxes Aren’t “Just Numbers”

Many people think that tax is “just numbers,” including students who would arrive in my office before or at the beginning of the basic federal income tax course, expressing concern that their “math deficiencies” would jeopardize their grades because “the math majors and the accountants have the edge” in the A-grade collection game. I explained to them that the accountants and math majors don’t have an edge, and might even have a disadvantage. Why? If they haven’t built up for themselves an expertise with the use of words, they will stumble at least as many times over language as the self-professed “mathphobic” students will stumble over numbers. Some examples are illustrative.

In Don’t Tax My Chocolate!!!, I examined whether large marshmallows are food exempt from the Pennsylvania sales tax or candy to which the sales tax applies. In Halloween and Tax: Scared Yet?), I focused on the dilemma of whether candy bars made with flour are candy subject to the sales tax or baked goods exempt from that tax. In Halloween Brings Out the Lunacy, I addressed whether pumpkins are food exempt from the sales tax. In Why Tax Practitioners Must Be Good With Words, and Not Just Numbers, I discussed a case in which the issue was whether aircraft hangars were exempt from property taxation under a provision that exempted any “building used primarily for . . . aircraft equipment storage.” In Pets and the Section 119 Meals Exclusion I shared the challenges of deciding whether the section 119 exclusion for meals applied to food purchases by the taxpayer for a pet. In Who Is a Farmer? A Taxing Question?, I discussed the issue of who qualifies for a New Jersey real estate property tax limitation applicable to land actively devoted to agricultural or horticultural use.” In Tax Meets the Chicken and the Egg, I explained how a property tax exemption for “all poultry” and a property tax exemption for “raw materials of a manufacturer” required a court to determine whether chicken eggs constitute poultry and whether hatching and raising chickens constitutes manufacturing. In When Tax Isn’t About Numbers: What is a Bank?, I explained the challenges of determining whether a particular entity qualifies as a bank. In Taxes, Strip Clubs, and Creativity, I commented on the attempt by a New York strip club to avoid sales taxes by arguing that its dancers were providing therapy to its customers, and thus the amounts it charged customer fit within the sales tax exception applicable to amounts paid for massage therapy or sex therapy. In Tax Question: What Is a Salad?, I described how the Australian Taxation Office gave up trying to define “salad” for purposes of the goods and services tax exemption for fresh salads, sharing the comments of a representative of that office who noted, “It depends on what you define a salad as. Some may define it as a bowl of lettuce, some may define it as a BBQ chicken shredded up with three grains of rice on it. I'm not trying to be facetious... there [are] a range of products that are very, very different that are marketed as salads." In Another One of Those Non-Arithmetic Tax Questions: What Is a Sport?, I shared the challenges faced by the English Bridge Union when it took the position that for purposes of applying the value-added tax on competition entry fees, which exempted fees paid to enter sports competitions, bridge is a sport. In Getting Exercised About A Sales Tax Exercise Exception, I pondered whether yoga constituted exercise for purposes of the New York City sales tax that applies to sales of services by weight control salons, health salons, gymnasiums, Turkish and sauna bath and similar establishment.

Though more proof that tax involves much more than “just numbers” isn’t necessary, I did take note of a recent Philadelphia Inquirer article describing a hotel tax controversy in Philadelphia. The city of Philadelphia adds to the Pennsylvania hotel occupancy tax an additional amount. The definition of a hotel for city purposes piggybacks on the definition in Pennsylvania law. Under title 61 section 38.3, a hotel is defined as “A building in which the public may, for a consideration, obtain sleeping accommodations, including establishments such as inns, motels, tourist homes, tourist houses or courts, lodging houses, rooming houses, summer camps, apartment hotels, resort lodges and cabins and other building or group of buildings in which sleeping accommodations are available to the public for periods of time less than 30 days.”

The dispute involves the Chamounix youth hostel, which occupies a old mansion in West Fairmount Park owned by the city. The mansion was restored by the Friends of Chamounix Mansion, which operates the rehabilitated property as a youth hostel, paying the city $1 annually as rent. The city is attempting to collect more than $500,000 from the Friends of Chamounix Mansion for hotel occupancy taxes that it did not pay for the years 2008 through 2013. The Friends of Chamounix Mansion argue that because it is a hostel, it is not a hotel. The city points out that other hostels in the city pay the tax, and notes that section 19-2401(5) of the ordinance enacted by Philadelphia to add to the hotel occupancy tax includes in the list of establishments treated as hotels “any place recognized as a hostelry.”

So this should be an easy case. When the city discovered that the Friends of Chamounix Mansion had not been paying the tax, it sent an invoice, which the organization refused to pay. The city went to its Tax Review Board, which decided it had no jurisdiction. And that is how the dispute ended up in the Court of Common Pleas.

The Friends of Chamounix Mansion argue that if it is forced to pay the tax it will go out of business. The city argues that if the organization prevails, then outfits such as Airbnb, Roost, and Sonder, which currently pay the tax, would use a decision in favor of the Friends of Chamounix Mansion to stop collecting and paying the tax.

The Friends of Chamounix Mansion offered the testimony of two former mayors of the city. Both testified that they were “astonished” to learn that the city was trying to collect the tax. Former mayor Michael Nutter stated, “I never considered it a hotel. It’s a youth hostel.” It’s unclear whether the city’s attorneys asked Nutter to read the city ordinance and explain why it made a difference that the mansion is operated as a hostel and not as a hotel. The organization’s attorney described how it operates, which is how most hostels operate, and claimed, “We are not a motel. We are not an inn. We are not a guesthouse. Our license compels us to operate as a hostel.” If the ordinance applies to hostels, as it states, then what is the point of admitting that the mansion is a hostel?

As the Philadelphia Inquirer put it, “in this case, being right and doing right may be two different things.” This case is an instance in which the statute clearly provides for a result, a result that some or perhaps many would consider unwise, inappropriate, or counterproductive. The article continues, “Now it’s up to [the judge] to define what a hotel is, once and for all.” But that’s not the judge’s role. The judge’s role is to apply the ordinance as written. The tax applies to hostels and the organization admits it is a hostel. The solution that the Friends of Chamounix Mansion can and perhaps should pursue is to ask City Council to enact an exception, though once that proposal is made, many other establishments will be knocking on Council’s doors asking for similar relief. My guess is that when the ordinance was enacted, no one was paying attention to what was happening in a mansion owned by the city and rehabilitated by the Friends of Chamounix Mansion.

It’s a tax case. And it’s a tax case involving the meaning of a word. Resolving the issue does not require math.

Learning About Wealth Taxes By Watching What Happens in Argentina

According to numerous reports, including this one, Argentina has enacted a wealth tax to fund a variety of measures related in some way to the pandemic, ranging from medical supplies and poverty relief to development of the natural gas industry. The tax has two sets of progressive rates, one reaching as high as 3.5 percent on assets held in the country and the other reaching as high as 5.25 percent on assets held outside of Argentina. The government estimates that the tax will affect about 12,000 people in a nation of 44 million. It is estimated that the tax will raise the equivalent of $3.75 billion.

A legislator who supported the tax explained that 42 percent of the affected taxpayers “have dollarized assets, of which 92 percent is located” outside Argentina. Thus, he argued, the tax is “far from taxing productive activity.” Opponents describe the tax as “confiscatory” and worry that rather than being a one-time levy, it will “stay forever.”

Aside from the question of whether it makes more sense to tax wealth than income, or whether it makes more sense to tax wealth rather than transactions, there exist many questions about implementation. It appears that taxpayers “declare” wealth and then compute the tax. But how is wealth computed? Though it is fairly easy to determine the value of a stock or bond investment, it isn’t quite as simple when it comes to putting values on real estate, patents, works of art, know-how, and intangibles. Having not found the language of the enactment, I do not know if the tax reaches all wealth or simply investment wealth, but even so there still are valuation issues to resolve. What happens if a taxpayer does not declare some or all of the taxpayer’s wealth? How does the Argentinian government figure out what a taxpayer owns, particularly if the asset is held overseas? What happens with wealth buried in complex arrays of pass-through and other entities? What are the risks of the government discovering wealth held in kind, such as jewels or art works, but stored at some remote secure site? How much of the tax revenue is diverted to the costs of enforcement, including training new or reassigned employees of the tax agency? What happens to administration and enforcement of other taxes when employees are diverted to dealing with the new tax?

I am not a fan of wealth taxes. Administering wealth taxes is too complicated. I am, however, a fan of a “repayment tax,” under which taxpayers who received tax breaks based on broken promises to create jobs or to provide some other allegedly society-benefitting activity repay, with interest, the tax breaks received over the years. This claw-back of unjustified tax breaks would, of course, reduce the wealth of those who grabbed the tax breaks, but that would be a secondary effect of undoing unwise tax legislation enacted over the past several decades.

Time will tell us what happens with the Argentina wealth tax. In the meantime, waiting and watching what happens there could be most educational.

Taxes and the New Naturalization Test

Within the past week, there has been a good bit of criticism, analysis, and commentary with respect to the new naturalization test. The focus includes the obscurity of some questions, the misleading character of some questions, and a few instances of incorrect answers being treated as correct and vice versa. The topics being discussed, at least in the commentaries I read, included areas of law other than tax. So I dug up the the new naturalization test and looked to see which questions or answers, if any, referred to tax. There are four.

Question 63 reads as follows: “There are four amendments to the U.S. Constitution about who can vote. Describe one of them. One of the accepted correct answers is “You don’t have to pay (a poll tax) to vote.” Considering there are three other accepted answers, not involving tax, that doesn’t seem to be an unfair question.

Question 70 reads as follows: “What is one way Americans can serve their country?” One of the six accepted answers is “Pay taxes.” True, paying taxes is a way of serving one’s country (and state, and county, and locality, and so on).

Question 71 asks, “Why is it important to pay federal taxes?” There are four accepted answers: (1) “Required by law.” (2) “All people pay to fund the federal government.” (3) “Required by the (U.S.) Constitution (16th Amendment).” (4) “Civic duty.” I quibble with several of these answers. Not all people pay to fund the federal government. Some people don’t pay federal taxes. Most children, and almost all infants, do not pay federal taxes. People making use of legal, but unwise, loopholes find ways to avoid paying federal taxes. There are people without gross income and who do not engage in transactions subject to federal excise taxes who do not pay taxes to the federal government. And if by “people,” the drafters intended to include corporations, as the Supreme Court has unjustifiably classified them, there are many corporations that do not pay taxes to the federal government. On top of this, the Sixteenth Amendment does not require people to pay taxes. It simply permits the Congress to enact an income tax, something that the Congress is not required to do, though, of course, it did do. Thus, the requirement to pay income taxes is based on certain provisions of the Internal Revenue Code. Nor does the Sixteenth Amendment have anything to do with federal taxes other than income taxes.

Question 72 reads as follows: “Name one reason why the Americans declared independence from Britain.” One of the accepted answers is “High taxes.” Another is “Taxation without representation.” Though the latter clearly is correct, the former can be questioned. One can wonder if there still would have been a Declaration of Independence if the taxes in question had not been particularly high. I think the answer is yes, because the dispute was one of principle, including taxation without representation, and not simply the rate of the tax. As noted in commentary (“Fact check: Did taxation really cause the American Revolution?”), “While taxation was a main cause for revolution, the reason why it was so abhorrent was not that the taxes were high and needed to be cut. It was a problem because the colonies had no say in how they wanted to be taxed. As noted by Prof. Wayne E. Lee at UNC Chapel Hill, “Among other things, the Revolution was not about a desire to CUT taxes.”

Certainly questions about taxes should be part of the naturalization test. Technically, only one question asked about tax. The other three simply make inquiries for which a reference to taxation is one (or two) of several correct answers. Considering how important taxation is to the nation and its political subdivisions, and in the lives of citizens, it might make sense to have more than one of the questions be a question directly about taxes.

Think It Takes Too Long to Read the Internal Revenue Code?

For many years, commentators, tax practitioners, business owners, and many taxpayers have complained about the complexity of tax law, often trying to prove their point by claiming that the Internal Revenue Code fills a great many pages. Many of these people claim that the Code fills as many as 74,000 pages, which, of course, is erroneous. I have written about the size of the Internal Revenue Code, mostly in response to absurd claims about the number of pages it fills, in many posts, beginning with Bush Pages Through the Tax Code?, and continuing with Anyone Want to Count the Words in the Internal Revenue Code?, Tax Commercial’s False Facts Perpetuates Falsehood, How Tax Falsehoods Get Fertilized, How Difficult Is It to Count Tax Words, A Slight Improvement in the Code Length Articulation Problem, and Tax Ignorance Gone Viral, Weighing the Size of the Internal Revenue Code, Reader Weighs In on Weighing the Code, Code-Size Ignorance Knows No Boundaries, Tax Myths: Part XII: The Internal Revenue Code Fills 70,000 Pages, Not a Surprise: Tax Ignorance Afflicts Presidential Candidates and CNN, The Infection of Ignorance Becomes a Pandemic, Getting Tax Facts Correct: Is It Really That Difficult?, Reaching New Lows With Tax Ignorance, Incorrectly Breaking Down the Internal Revenue Code, Is Tax Ignorance Eternal?, So How Long Does It Take to Read the Internal Revenue Code?, and Much More Than the Internal Revenue Code.

The other day, I found myself reading a report about Robert Brockman, a “software executive charged in the largest-ever tax case against a U.S. individual.” He is accused of “using a complex trust structure in the Caribbean to hide $2 billion in income over two decades.” The main focus of the story was the request by Brockman’s lawyers to move his case from San Francisco to Houston, where he is undergoing medical treatment to deal with progressive dementia.

But what caught my eye was the revelation that during an earlier court hearing in the case, “defense lawyer Neal Stephens said the case against Brockman involves 22 million pages of documents.” Two thoughts popped into my brain. The first was a question. How many other cases involving one taxpayer, if any, involved 22 million pages of documents or more? I tried to research the question, and though I found references to court cases and to other disputes not involving litigation that involved “millions of pages” of documents, none provided enough information to determine if “millions” meant three million or 10 million or 50 million. Many of these situations involved multiple parties, and very few, if any, were tax cases. I ignored references to matters such as property tax records maintained by governments that consisted of millions of pages because those databases related to tens of thousands and hundreds of thousands, if not a few million, taxpayers. So it’s unclear whether 22 million pages is a record.

The second thought that occurred to me was an observation. For those who find the idea of finding relevant tax law in the Internal Revenue Code, an effort simplified by the combination of search tools and digital technology, imagine being tasked with reading 22 million pages of documents in a tax case. No one person can do that in the applicable time frame. It takes a team. Yet it also requires someone to coordinate that team and to find ways to connect relevant information discovered by different team members in order to construct a chronology, a summary, or some other guide that is useful for the judicial proceedings.

Why am I confident no one person can read the 22 million pages within the time constraints of the litigation? The first step is to determine how many words are on 22 million pages. That is difficult because some of the pages might contain pictures, charts, graphs, or similar non-word material. It also is difficult because the margins, spacing, font size, and other characteristics of the material is unknown. The general rule of thumb is that a single-spaced page holds 500 words and a double spaced page holds 250 words. So, using 375 words per page as a rough benchmark, 22 million pages would contain 8.25 billion words. The second step is to determine how long it takes to read 8.25 billion words. As I wrote in So How Long Does It Take to Read the Internal Revenue Code?, “the answer depends on how fast a person reads. The average person reads roughly 200 to 250 words per minute. Note that it’s one thing to read, and a totally different thing to understand. Someone trying to understand written text might need to read more slowly, or to go back and reread some or all of the text.” Considering reading the material, and setting aside understanding, analyzing, interpreting, summarizing, or comparing the material to other information, it would take 41.25 million minutes, or 687,500 hours, to read 22 million pages. Reading for 12 hours a day, for 365 days, would require 157 years. Allowing time for understanding, analyzing, and otherwise absorbing the impact of the material would require many more years.

And some think reading the Internal Revenue Code, cover to cover, which I have done, is a horrendous undertaking. There probably are, however, a few people who enjoy reading long books, including those that consist of multiple volumes. If you need a list of suggested titles, check out this List of Longest Novels, on which War and Peace comes in at 32nd. And, no, the Internal Revenue Code isn’t on the list though it would be, near the bottom, if it were a novel, which it isn’t.

This Time, It’s the Corporation’s Owner and Accountant Who Try to Evade Tax Evasion Charges

Though I often write about tax return preparers who run afoul of the law, in posts such as Tax Fraud Is Not Sacred, Another Tax Return Preparation Enterprise Gone Bad, More Tax Return Preparation Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, and Tax Return Preparer Fails to Evade the IRS, it’s not always tax return preparers who get into this sort of trouble. In an indictmentannounced last Wednesday, the Department of Justice charged a business owner and the corporation’s accountant with a long list of offenses. The owner of the corporation was charged with bank fraud, conspiracy to defraud the IRS, six counts of filing false tax returns, ten counts of filing false reports with unions, and 18 counts of failing to make contributions to union employee benefit funds on behalf of employees. The accountant was charged with conspiracy to defraud the IRS and three counts of aiding and abetting the preparation and filing of false income tax returns.

The indictment alleges that the business owner and the accountant worked together to falsify corporate records so that the business owner’s federal income tax liability would be less than what it should have been. One of the “techniques” used by the pair was the hiring of the business owner’s wife for a “no show job,” paying her $166,400 annually, and classifying it as a legitimate compensation business expense. In other words, taxable income of the corporation was reduced by creating fake salary deductions. Also classified as corporate business expenses were salaries paid to employees who renovated a condominium owned by the wife, and expenses paid for the wife’s use of a car.

The indictment also alleges that when the business owner learned that the IRS had been anonymously alerted to the creation of the no-show job for his wife and the use of corporate employees to renovate his wife’s condominium, he filed amended tax returns removing some improper business deductions but which continued to claim deductions for the wife’s no-show job and for her car expenses. The indictment allege that the accountant helped the business owner try to hide the fraud by “secretly changing properly recorded personal expenditures to make them appear to be business expenses.”

As the First Assistant U.S. Attorney put it, the business owner “found an accountant to help him defraud the IRS by secretly changing properly recorded expenses into fraudulent ones. And when the defendants thought their scheme might be uncovered, they allegedly cooked the books even further to cover their tracks.” In other words, the business owner and the accountant are charged with, among other things, committing tax fraud in order to hide tax fraud. As I wrote in Tax Return Preparer Fails to Evade the IRS, “Sometimes when a person gets into a hole, they dig furiously to get out, but too often that makes the hole deeper and bigger.”

If the charges are proven, and the defendants are convicted or take a plea, the question that probably will not be answered is, “Was it worth it?”

Much More Than the Internal Revenue Code

Over the years, I have written about the size of the Internal Revenue Code, mostly in response to absurd claims about the number of pages it fills, in many posts, beginning with Bush Pages Through the Tax Code?, and continuing with Anyone Want to Count the Words in the Internal Revenue Code?, Tax Commercial’s False Facts Perpetuates Falsehood, How Tax Falsehoods Get Fertilized, How Difficult Is It to Count Tax Words, A Slight Improvement in the Code Length Articulation Problem, and Tax Ignorance Gone Viral, Weighing the Size of the Internal Revenue Code, Reader Weighs In on Weighing the Code, Code-Size Ignorance Knows No Boundaries, Tax Myths: Part XII: The Internal Revenue Code Fills 70,000 Pages, Not a Surprise: Tax Ignorance Afflicts Presidential Candidates and CNN, The Infection of Ignorance Becomes a Pandemic, Getting Tax Facts Correct: Is It Really That Difficult?, Reaching New Lows With Tax Ignorance, Incorrectly Breaking Down the Internal Revenue Code, Is Tax Ignorance Eternal?, and So How Long Does It Take to Read the Internal Revenue Code?. If I were to write a commentary on every article or blog post that contributes to the overstatement of Internal Revenue Code length, I would have no time to do anything else. Chasing down and eliminating this misinformation is no less likely to succeed than chasing down and eliminating the claims of a flat earth and the thousands of political falsehoods. Fortunately, unlike political falsehoods, the misinformation about Internal Revenue Code size is the product of ignorance and not willful and deliberate mendaciousness. Nonetheless, its impact is no less troubling.

From time to time, reader Morris sends me links to more and more of the web sites where foolish claims about Internal Revenue Code size are made. Recently, he sent me a link to yet another exaggerated claim about Internal Revenue Code size. The commentary is from April of this year, but several things stood out. They have inspired me to return to this vexing issue of Internal Revenue Code size.

According to the author, “The version of the Code available online last year was slightly smaller, with 3.95 million words.” The authority cited in the accompanying footnote takes a reader to a House of Representatives web site. I downloaded title 26 of the United States Code, which also is the Internal Revenue Code. I discovered that what is in the document that allegedly contains 3.95 million words is much more than the Internal Revenue Code. It includes amending acts, text of the statute before each amendment, effective date provisions, language in amending acts that did not become part of the Internal Revenue Code, and other extraneous material. The extraneous material is not part of the Internal Revenue Code language enacted by Congress and codified, but includes editorial additions designed to assist the reader understand the history of each provision in the Code, as well as to show the reader what that provision looked like in prior years but that is no longer part of the Internal Revenue Code.

For example, for section 11, which contains 110 words, is followed by 3,216 words that are not part of section 11 but yet were included in the word count. Copied into Word, it fills six pages. It also appears that Word counts each section number, subsection designation, and so forth, such as (a), (1), and (iii), as words. Even setting that aside, a 3,216 to 110 ratio explains why people not understanding the difference between the actual Internal Revenue Code and the extraneous information are coming up with ridiculous word counts. Of course, there also are the folks who think that multi-volume sets from commercial publishers that contain the Internal Revenue Code, regulations, case annotations, practice pointers, and other material, constitutes the Internal Revenue Code, and who thus conclude that the Internal Revenue Code consists of more than 70,000 pages.

Yes, the Internal Revenue Code is big. But it is not the gargantuan beast that too many people claim that it is. Yes, it is bigger than it should be, but efforts to reduce its size ought not be based on exaggerated claims of its size. Yes, it should be simplified, but that’s a matter of eliminating the words that have been inserted to gratify the lobbyists and donors who complain about the tax law but are eager to use it to accomplish goals that should be pursued more directly than through the tax law.

Tax Return Preparer Fails to Evade the IRS

In posts such as Tax Fraud Is Not Sacred, Another Tax Return Preparation Enterprise Gone Bad, More Tax Return Preparation Gone Bad, Are They Turning Up the Heat on Tax Return Preparers?, Surely There Is More to This Tax Fraud Indictment, Need a Tax Return Preparer? Don’t Use a Current IRS Employee, Is This How Tax Return Preparation Fraud Can Proliferate?, and When Tax Return Preparers Go Bad, Their Customers Can Pay the Price, I have described the indictments of tax return preparers who have altered their clients’ tax returns by inserting deductions and credits for which clients are not eligible, and by inflating numbers, who have failed to sign returns as preparers in order to make the fraudulent return appear to be the work of the client, and who have trained employees to file false returns. Now comes news of a tax return preparer not only for adding “fictitious or inflated” deductions and losses to her clients’ returns but who took steps to evade attempts by the IRS to shut her down.

According to the indictment, the tax return preparer used multiple names for her tax return preparation business. She did this working with two co-conspirators. When the IRS caught on and revoked the tax return preparer’s e-filing privileges, she used her co-conspirators’ e-filing identifiers. The co-conspirators let her do this in exchange for money and office space that she provided to them.

Sometimes when a person gets into a hole, they dig furiously to get out, but too often that makes the hole deeper and bigger. Usually, these sorts of situations arise outside of the tax practice world. For example, a driver is pulled over for an expired registration tag or expired inspection sticker, violations that usually generate a monetary penalty, but take off, leading police on chases that end up with accidents, deaths, injuries, and penalties far more stringent than a fine. A child is caught by a teacher stealing another student’s property, but when confronted by the parents, tells lie after lie, not realizing that there is ironclad proof of what was done. Sensible parents punish the child not only for the theft, but double or triple fold for the lies.

Unless the case goes to trial, and the defendant testifies, and the defendant is asked why she thought she could get away with using someone else’s IRS e-filing identifying information, and unless she responds, we will almost certainly never know why she thought what she did would work. Perhaps she did not understand how the IRS tracks and matches identifiers, but perhaps none of us really know much about IRS methods in these matters. Perhaps someone told her it would work. Perhaps we will find out. But we probably won’t, as the odds are that this case, like so many others, will settle with a plea of some sort.

Different, But Thanksgiving Nonetheless

Tomorrow is Thanksgiving. For as long as I’ve been writing this blog, I’ve been sharing a Thanksgiving post to express my gratitude for a variety of people, events, and things. Aside from 2008, when I did not post and I don’t have any recollection of why or how that happened, I’ve dedicated a post on or around Thanksgiving. I started in 2004, with Giving Thanks, and continued in 2005 with A Tax Thanksgiving, in 2006 with Giving Thanks, Again, in 2007 with Actio Gratiarum, in 2009 with Gratias Vectigalibus, in 2010 with Being Thankful for User Fees and Taxes, in 2011 with Two Short Words, Thank You, in 2012 with A Thanksgiving Litany, in 2013 with “Don’t Forget to Say Thank-You”, in 2014 with Giving Thanks: “No, Thank YOU!” , in 2015 with Thanks Again!, in 2016 with Thankfully Repetitive, in 2017 with Never-Ending Thanks, in 2018 with Particularly Thankful This Time Around, and in 2019 with Quest'anno è il Ringraziamento.

As I stated the past seven years, “I have presented litanies, bursts of Latin, descriptions of events and experiences for which I have been thankful, names of people and groups for whom I have appreciation, and situations for which I have offered gratitude. Together, these separate lists become a long catalog, and as I have done in previous years, I will do a lawyerly thing and incorporate them by reference. Why? Because I continue to be thankful for past blessings, and because some of those appreciated things continue even to this day.” When I re-read those lists, I realized that the people, events, and things for which I am appreciative are far from obsolete.

So once again I will look back at the past twelve months, and remember the people, events, and things for whom and for which I give thanks. If some of these seem repetitive, they are, for there are gifts in life that keep on giving:

• I am thankful for a wonderful son, daughter, daughter-in-law, grandson, and granddaughter.
• I am thankful for the wonderful people in my maternal grandparents’ hometowns in Italy who, even though I could not visit this year, have continued to help with the updating of family histories and have shared even more history of their respective towns.
  
• I am thankful for my congregation’s choir continuing to tolerate me as its president, and for our Director of Music Ministries, who continues to teach me and the others much more about music and singing than I realized I needed to learn, who has found ways to keep us singing while we are physically apart, and who through those adaptations has sharpened even more effectively our singing techniques.
  
• I am thankful that once pre-recording of Sunday worship services returned to the sanctuary they welcomed me into the tiny group that does so, which meant that I could continue to ring the narthex bell.
  
• I am thankful for having had the opportunity to continue teaching law courses, for the patience of students as I brought an in-person class onto the Zoom platform in March.
  
• I am thankful for all the people in the world who continue to fight ignorance, crime, terror, evil, and corruption.
  
• I am thankful for people being willing to read the things I write.

Fourteen years ago, in Giving Thanks, Again, I shared my Thanksgiving advice. I liked it so much that I repeated it again, in 2009 in Gratias Vectigalibus, yet again in 2013 in “Don’t Forget to Say Thank-You”, still again in 2014 in Giving Thanks: “No, Thank YOU!” , even yet again in 2015 in Thanks Again!, even still again in Thankfully Repetitive, yet once more in Never-Ending Thanks, yet even once more in . Particularly Thankful This Time Around, and last year in Quest'anno è il Ringraziamento. For me, it does not lose its impact:

Have a Happy Thanksgiving. Set aside the hustle and bustle of life. Meet up with people who matter to you. Share your stories. Enjoy a good meal. Tell jokes. Sing. Laugh. Watch a parade or a football game, or both, or many. Pitch in. Carve the turkey. Wash some dishes. Help a little kid cut a piece of pie. Go outside and take a deep breath. Stare at the sky for a minute. Listen for the birds. Count the stars. Then go back inside and have seconds or thirds. Record the day in memory, so that you can retrieve it in several months when you need some strength.

I am thankful to have the opportunity to share those words yet again. And I am thankful that even in a pandemic Thanksgiving it is possible for some of us to do all of those things, and for others of us to most of those things.

So It’s Not a Tax Case But It’s a Great One

When I write about a television court show, I react to episodes that involve tax in some way or at least have some sort of tax angle. This time the America’s Court episode did not involve tax. Nor did it involve the First Amendment, legal education, music, model trains, chocolate chip cookies, genealogy. Perhaps, of all the things I profess to write about, at least occasionally, it involves, in some remote way, religion and theology. As in, perhaps, don’t do this.

The plaintiff, Samantha, began with the following story. She had been dating the defendant, Paul. She let Paul use her car while she was out of town. She returned to discover that Paul had been in an accident with the car, and that the car had been damaged. Her insurance paid for the repairs except for a $1,000 deductible that the plaintiff had to pay. Samantha and Paul agreed that Paul would pay half of the deductible, $500, to the plaintiff. Paul had not yet paid $500 to the plaintiff. The plaintiff then learned additional information that caused her to decide to sue Paul for the entire deductible.

The defendant began his story with an attempt to butter up the judge by saying, “Just as I am all about hustle and grind I appreciate the hustle and grind you bring to your courtroom.”

It gets better.

The judge asked Samantha, the plaintiff, “You agreed to $500, so why are you now suing for $1,000?”

Samantha replied, “I would like to introduce my witness, Miss Bennett, a friend.” The judge swore in Miss Bennett, and asked, “What’s your role in this case?”

Miss Elliott explained, “Samantha and I met several years ago on a shoot. We became friends. We are busy so we don’t see each other often. When we got together, she told me she had been dating a guy named Paul who had four kids, but things went bad when he borrowed her car and had an accident. So I said to Samantha, ‘Wait, I was on a date with a guy named Paul who has four kids and when I was with him on a date we were in an accident.’ Samantha took out her phone, and showed me a photo of Paul, and it was the same guy!”

The judge asked, “The defendant here, Paul?”

Miss Elliott replied, “Yes.”

The judge turned to the defendant Paul and asked, “You have four children?”

Paul replied, “Yes.”

The judge asked, “You see to it they are cared for, have what they need?”

Paul again replied, “Yes.”

The judge then asked Paul, “All with one woman?”

Paul replied, “No, four different women.”

The judge turned to Paul and remarked, “Mr. [can’t remember Paul’s last name], perhaps it is time to cool down your hustle and grind!”

The judge continued by asking Paul, “So what defense do you have, if any, to the plaintiff’s claim to the full deductible?”

Paul replied, “When the accident happened, I was running errands for the plaintiff.”

The judge asked, “Is Miss Elliott an errand?” Laughter erupted among the spectators the courtroom.

The judge concluded by saying, “I’ve heard enough. Judgment of $1,000 for the plaintiff.”

Perhaps stories like this are far more common than I am imagining. Yes, I’ve heard and read stories about two women discovering they are dating the same guy, or two guys discovering they are dating the same woman, but never in the context of one woman suing the guy and then having the other woman be the witness in litigation whose testimony makes the plaintiff’s case.

And the idea that the defendant considered dating the plaintiff’s friend to be running an errand for the plaintiff is just totally preposterous. And hilarious. I suppose if the defendant had taken on a date someone who was a stranger to the plaintiff, whose presence in the vehicle was demonstrated by a photo or a police report, and who was not in the courtroom, he would have come up with some excuse along the lines of just giving a friend a ride. Sure.