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Why I did not go to jail (2014)

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Re: Why I did not go to jail (2014)

#101

Post by lmm »

marcinzm wrote: post #74
mikem170 wrote: post #39

Earlier quoted context omitted.

My first thought was that "the system" is broken. It's too big and complicated. It's inhumane. And it's not just corporate tax law. Health care is a dumpster fire. Lots of overly complicated modern bureaucracies. We're not as smart as we think we are.

>We're not as smart as we think we are. We are, that's the problem. We find loopholes, we find edge cases, we bend rules to our benefit. Thus the bureaucracy must become ever more complicated to deal with our cleverness.

Most of the loopholes are there by design. The solution is not to make the bureaucracy more complicated but to make it simpler, by removing most deductions and distinctions in the tax code.

Re: Why I did not go to jail (2014)

#102

Post by mikem170 »

marcinzm wrote: post #74
mikem170 wrote: post #39

Earlier quoted context omitted.

My first thought was that "the system" is broken. It's too big and complicated. It's inhumane. And it's not just corporate tax law. Health care is a dumpster fire. Lots of overly complicated modern bureaucracies. We're not as smart as we think we are.

>We're not as smart as we think we are. We are, that's the problem. We find loopholes, we find edge cases, we bend rules to our benefit. Thus the bureaucracy must become ever more complicated to deal with our cleverness.

If we were so smart (as a society) these problem would not exists.

Personally I think these things are scaling problems. I'd argue that we are not smart enough to centrally organize these things for 330+ million people.

Perhaps the problem is that the federal government was never designed to do so much (tenth amendment). The federal government was designed to answer to the states, not 330+ million people. Look how much better smaller countries do with this stuff. We give the "bigger is better" government too much credit. Historically "bigger is better" causes all the big problems.

I'm 100% for progressive policies at the state level. I'm 100% opposed to progressive policies at the federal level. Government should be "by the people", not by some rules written by career politicians and civil servants a thousand miles away.

Re: Why I did not go to jail (2014)

#103

Post by lmm »

thaumasiotes wrote: post #61
PragmaticPulp wrote: post #24

Earlier quoted context omitted.

> Options backdating schemes allow additional wealth to be transferred to an options recipient from the company. The issue is that the company is owned by shareholders. So the wealth transfer is from shareholders, including public investors, to employees.

Sorry, what is the issue supposed to be? "The company is owned by shareholders" describes all employee compensation. (Indeed, it describes everything the company does.) Does the presence of shareholders mean we have to stop paying salaries?

The issue is lying to shareholders about how much salary you're paying - particularly when it's to yourself. I'd draw an analogy with having fictitious employees on the books when the CEO is actually just trousering their salaries.

Re: Why I did not go to jail (2014)

#104

Post by lmm »

dan-robertson wrote: post #55
yetanothermonk wrote: post #27

Did the PwC auditors have skin in the game? Do they have to stand by their decision when questioned or is it just a stamp of approval?

PwC are a big company and probably are pretty good at avoiding liability for themselves. Once upon a time companies with a partnership structure (eg law firms, accounting firms, private investment banks) were legally partnerships. In a partnership, partners have unlimited joint and several liability, which means that every partner could be held liable to an unlimited amount for anything any partner (or the partnershi…

> which means that every partner could be held liable to an unlimited amount for anything any partner (or the partnership) did.

Technically I believe there's an exception for things that are very clearly the responsibility of a single partner (i.e. done without anyone else's knowledge or consent).

> It’s not obviously a bad thing

Disagree. We've seen a huge surge in accounting scandals since these accounting firms became limited-liability; the field has become dominated by these "too big to fail" companies who make massive profits while paying tiny penalties for their wrongdoing.

> Lloyd’s underwriters (used to?) have unlimited liability. I can’t think of other examples.

I believe there's a New York commercial law firm that's still structured as a traditional partnership.

> I feel like they don’t scale well to large organisations.

Maybe that's a feature rather than a bug.

Re: Why I did not go to jail (2014)

#105

Post by tablespoon »

chki wrote: post #51
Meekro wrote: post #32

Earlier quoted context omitted.

"Ignorance of the law is no excuse" is not a just principle when the laws are so numerous and incomprehensible that everyone is always ignorant of the law. Plenty of people just end up getting bad legal advice, even when they thought they were paying top dollar for a good quality law firm.

In some jurisdictions (I can only speak for Germany with some authority) if you've made a serious effort to get legal advice on a complicated topic and the legal advice was wrong this will (probably) mean that you're not guilty of a crime caused by the bad legal advice. Civil liability is a different topic obviously. (But the "probably" is there for a reason: it really does depend on the specific topic at hand and wh…

Is there some kind of good-faith test or controls to penalize bad legal advice? Because I could totally imagine some grey-area tax avoidance outfit partnering with some shady lawyer that will tell the client everything's legit in order to protect them.

Re: Why I did not go to jail (2014)

#106

Post by crowf »

> In retrospect, the only thing that kept me out of jail was some good luck and an outstanding General Counsel

Is there no legal way for me as a non-lawyer to get a signed form from a lawyer saying that what I'm doing is legal? Then if it ends up to be illegal the lawyer could get in trouble rather than me. Or am I expected to know all the laws myself? And if a law is unclear, is there someway to ask for legally binding clarification from the government?

Re: Why I did not go to jail (2014)

#107

Post by mikem170 »

lmm wrote: post #101
marcinzm wrote: post #74

Earlier quoted context omitted.

>We're not as smart as we think we are. We are, that's the problem. We find loopholes, we find edge cases, we bend rules to our benefit. Thus the bureaucracy must become ever more complicated to deal with our cleverness.

Most of the loopholes are there by design. The solution is not to make the bureaucracy more complicated but to make it simpler, by removing most deductions and distinctions in the tax code.

The problem may be that 330+ million people expect the politicians in Washington to do anything about these problems, while the problems just get worse and worse. And not just the tax code. They should be ashamed of health care, the complexity of the ACA, the laws allowing people to be ripped off. So many problems.

I agree with you that the tax code should be simpler. But it's about money in Washington, not what people like you and I think. The tenth amendment is there for very good reasons, part of the checks and balances. Bigger is not always better.

Re: Why I did not go to jail (2014)

#108

Post by refurb »

crowf wrote: post #106

> In retrospect, the only thing that kept me out of jail was some good luck and an outstanding General Counsel Is there no legal way for me as a non-lawyer to get a signed form from a lawyer saying that what I'm doing is legal? Then if it ends up to be illegal the lawyer could get in trouble rather than me. Or am I expected to know all the laws myself? And if a law is unclear, is there someway to ask for legally bind…

Companies do this all the time - seek an opinion from outside legal counsel. It's a CYA exercise and demonstrates intent to not violate the law. It certainly isn't blanket protection, a company can still be fined or leadership jailed for violating the law.

I assume if you did this as a person, not a company, it could be taken into account in sentencing - it may support the idea that you didn't intent to violate the law.

But a lawyer going to jail instead of you? Why would a lawyer agree to that? There is no benefit to them.

Re: Why I did not go to jail (2014)

#109

Post by valuearb »

istjohn wrote: post #47
jacquesm wrote: post #16

This is one of the more important bits to be periodically reposted on HN. Compliance with the law is not 'optional', and if you cross that line there is a fair chance that it will come back to bite you. Regulated industries, stock transactions (and options, as in this bit of startup history) all have their peculiarities and you need to realize that not all of these end up with the proverbial slap on the wrist if you…

It seems there is more to this story than the author lets on. Michelle cheated on her personal taxes: https://news.ycombinator.com/item?id=7193033

When someone is a habitual line stepper there is always another line they stepped over.

Re: Why I did not go to jail (2014)

#110

Post by yesenadam »

thorwasdfasdf wrote: post #96
ChrisMarshallNY wrote: post #64

Earlier quoted context omitted.

I like it. I'd love to see something about ethics, too. I feel there is a need for more ethical behavior, in today's corporate world. I have a fairly basic ethical litmus test: "If I feel like I can 'get away with it,' it's wrong." Doesn't matter, whether or not it's legal . Wrong is wrong. One of the most valuable assets in my life, is my personal sense of Integrity and Honor. It has nothing at all to do with whethe…

What's right isn't always legal, often it isn't. And what's wrong isn't always illegal. At the end of the day, I think it's everyone's highest priority to do what's legal, rather than what's "right".

I'm not sure what "At the end of the day" adds, except maybe it allows you to disregard counterexamples. I guess that

> it's everyone's highest priority to do what's legal, rather than what's "right".

is something that can be tested and its truth discovered. Not clear if "everyone" means people in your city, state, country etc. Although "highest priority" seems a bit vague too. Does "highest priority at the end of the day" mean, what people actually do/end up doing? That sounds nowhere near true for me, or the people I know. But maybe I'm misunderstanding you.

People whose behaviour is guided by laws, rather than ethics, stand out as sociopathic jerks, e.g. internet trolls or bullies. "There's no law against it" doesn't say much at all about whether you should be doing something.

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