Castroneves Trial: This is what I don't get

[FormerFF]

The thought that a trial this complicated will be decided by a group of people not smart enough to get out of jury duty is scary.

I'm not sure how it is where you live, but here (Fulton County, Georgia) there are about three reasons you are excused: primary caregiver for a child under 6, incompetent or disabled, or over a certain age (something like 75). Otherwise, you go when called. You can game the system for a little while, but they will eventually catch up to you. The CFO of the company I work for forgot about his jury summons. The judge sent two sheriff's deputies to his house at six in the morning and took him to the judge's chambers for a meeting.

As far as Helio goes, what is confusing here? He lives in the U. S. and works in the U. S. for a U. S. based company. Why would he think he could avoid U. S. taxes? I understand if he were still living in Brazil that there might be some gray areas, but that's not the case.

[Jag_Warrior]

Oh what a tangled web we weave when first we practice to deceive...

[indycool]

Well, they're talking about the years 1999-2004. In 1999, Helio would have been fresh from Brazil in a new country with all new people around his racing program. I'm born in America, 61 years old, I still hafta go to H&R Block and I STILL don't know if I do it right or not.

[MDS]

Well, they're talking about the years 1999-2004. In 1999, Helio would have been fresh from Brazil in a new country with all new people around his racing program. I'm born in America, 61 years old, I still hafta go to H&R Block and I STILL don't know if I do it right or not.

But what I'm stuck on isn't that complicated. If paying back his father was so important, why did Helio wait 10 years to access the money and pay his father back? If you pay your father back for starting your career you don't say, "I've got the money to pay you now, but lets put it an account that neither of us can access for 10 years, then I'll pay you back." Makes no sense

What makes sense to me is Helio envisioned racing about 10 years and moving to a tax shelter without having to pay taxes on it at all, and have it earning money tax free without witholding and then with draw it once he's living in Monaco. That makes perfect sense on multiple levels to me.

I just ran these figures with an free compound interest calculator, and if fintage had the money sitting in an account earing an average of 8 percent, which isn't bad, but not unrealistic, every year for the past 10 years, it would have generated $10.74 million. Had Helio paid taxes on that same amount it would only be worth about $7.8 million, so even if Helio pays the $2.7 million in interest now he still comes out ahead, which was probably the plan all along.

[garyshell]

My $.02. Helio is/was a race car driver not a tax attorney. He and his sister hire one who tells them this is what they should do to defer the income via an annuity. Now each of you look in the mirror and answer the following question: if the attorney told YOU that such an off shore annuity would allow YOU to defer the income and legally pay the taxes on the original amount after the annuity earned you aditional income, which of you would NOT follow the attorneys advice?

To me the only thing Helio and his sister are guilty of MIGHT be not geting a second opinion.

Gary

[MDS]

I own my own company, so I get tax advice from a number of sources. Several times I have received advice from tax attorneys that would have created an illegal situation had I done what they were suggesting.

Making decisions based on one attorney's advice is moronic, no matter how well respected that attorney is.

[garyshell]

I own my own company, so I get tax advice from a number of sources. Several times I have received advice from tax attorneys that would have created an illegal situation had I done what they were suggesting.

Making decisions based on one attorney's advice is moronic, no matter how well respected that attorney is.

And do we know that they DIDN'T get a second opinion? From what I have read of the reports, alot of the legality of this hinges on the ownership of the companies involved. And then again from what I have read thus far, I am not really convinced that the government has made a compelling case for this part of the case. We'll know in a few days what the folks in the jury box who have heard ALL of the details think.

As for it being moronic, I am not sure I'd go that far. A bit naive maybe but not moronic. Especially since this attorney had been highly recommended by others in the racing industry.
Gary

[indycool]

I'd imagine athletes in all sports are watching this trial very closely. You read about A-Rod getting $120 million over eight years with "X" much deferred or a Tennessee defensive end getting $100 million over seven with so much guaranteed and so much deferred, I'll bet they're paying some attention.

[Old3Fan]

I'm no tax genius. Actually probably nobody is but I do know that you can defer a certain amount of your income from say your employer and the amount you defer is not taxable until your employer actually pays you the money. Hell half of the AZ Diamondbacks from their championship season deferred millions and the DBacks are still still repaying that money. But I don't think you can defer any and have it drawing interest and that interest is forgotten when you finally collect what was deferred. Well if he is declared guilty he can always apply for a job with President Obama. That seems to be a precedent being set in alot of his appointments. Don't pay your taxes and become head of the IRS.

[beachbum]

There is nothing wrong with differed income plans, if they are set up correctly. There are certain well known rules and conditions. If a person follows those rules, the IRS won't have a problem. The prosecutions contention is that Helio's plans didn't follow the rules, and the reasons were intentional. Based on what little has been reported in the press, the IRS probably has presented a strong case.

The idea that Helio is just a race driver and not a tax attorney is correct, but he is a multimillionaire race driver who can and apparently did get advice from more than one source. The fact that he "neglected" to inform his tax accountant of important income can easily be seen as deliberate, not accidental. Using naive as an excuse may work for a person preparing their own return, but he hired professionals and then didn't give them all of the information for them to do their job.