Refund on Real Taxes for Fake Profits
The accounting fraud of Healthsouth’s executives involved showing paper profits that were not real to meet Wall Street expectations. Last week, Healthsouth announced that the IRS was refunding $440 million in overpaid taxes.
The company had to borrow money to make the tax payments on the falsified profits.
Borrowing money to pay a debt you don’t owe to keep up appearances… Probably not worth passing along, but it reminds me of a comedian from years ago who said his family was poor but proud. They didn’t have air conditioning in their car but they had to drive around in stifling heat with the windows up because his mama didn’t want anybody to know they didn’t have air conditioning.
Is the IRS going to refund taxes paid by individuals on their falsely overvalued HealthSouth shares? I wonder if Scrushy has already filed amended returns?
Comment by Kathy — October 22, 2007 @ 9:06 am
Interesting point. Generally, shares are taxed when sold or dividends paid. So, if they cashed out when the shares were falsely overvalued, do they owe a refund to the buyers?
Comment by walt moffett — October 22, 2007 @ 10:58 am