Accountants like to tell us that tax avoidance is good, while only tax evasion is bad. But, the amount of the potential "tax avoidance" involved here, could be quite large as the rest of Mitt Romney's one year tax filing for 2010 indicates that his IRA is valued between $20.7 million and $101.6 million -- an astonishing amount compared to the average IRA's value of $67,438.

Questions have previously been asked about how an IRA could be so large, given that individual contributions are limited to $2,000 per year. Employers may also make larger contributions, but there are apparently still limits that make the size of this IRA exceptional and curious.

Jason Cherkis Jekis also quotes extensively from a Vanity Fair article which details why, and how Mitt Romney may have used these "blocker" corporations to avoid both taxes, and the need to itemize his offshore financial holdings.

This news come in addition to previously known lack of a schedule itemizing his holdings in foreign banks.

I've seen no evidence that any large traditional media company, or even the Obama campaign is demanding more information be provided about this missing forms. It's sort of galling when the Romney Campaign claims it has already released two years, when if appears it hasn't, yet, completely releazed even one.

Mitt Romney, tear down this wall and release 10 year of your income taxes! And, answer theses questions about your 2010 taxes. Is this the kind of president you are going to be? One that plays games with the American people, trying to hide behind partial compliance with the letter of the law, to run out the clock before answers perfectly legitimate questions?



Here's a really excellent overview-editorial from the New York Times on Mitt Romney's many tax mysteries, I rec as a worthwhile quick read. Here's as few snippets.

http://www.nytimes.com/...



After all, the one year’s tax returns that he has released raise doubt about his campaign’s claims that his offshore accounts did not save him one penny of tax. Putting business assets into an individual retirement account invested in a Cayman Islands corporation allows Mr. Romney to avoid the “unrelated business income tax” — a 35 percent levy — on at least some of his I.R.A.’s earnings, a tax that he would have had to pay if his I.R.A. were held directly by a financial institution in the United States. With an I.R.A. account of $20 million to $101 million, the tax savings would be more than a few pennies. ... Given the extraordinary size of his I.R.A., we have to presume that Mr. Romney valued the assets he put in his retirement account at far less than he would have sold them for. Otherwise it is quite a trick to turn contributions that are limited to $30,000 to $50,000 a year into the $20 million to $101 million he now has there. But we cannot be certain; his meager disclosure of tax records and financial information does not indicate what kind of assets were put into the I.R.A. Mr. Romney’s Cayman Islands and Bermuda corporations also probably allowed him to avoid limitations on deductions for investment expenditures that would otherwise apply. So we don’t need any more tax returns to know that Mr. Romney is an Olympic-level athlete at the tax avoidance game. Rich people don’t send their money to Bermuda or the Cayman Islands for the weather. Moreover, we have no clue whether Mr. Romney paid any gift tax on transfers, now valued at $100 million, to a trust he set up in 1995 for the benefit of his five sons. Until this year, the federal gift tax had a lifetime exemption of $1 million, and it taxed gifts in excess of that amount at rates between 29 and 44 percent. A gift of $100 million to one’s children could, therefore, require paying a tax of as much as $29 million to $44 million.



This article by Bloomburg exlains how Romney could have contributed vastly undervalued stock and option to his IRA as an employeer prior to the companies going public where their value would have skyrocketed. This is the kind of trick I think he his trying to hide by avoiding disclosing the two attached schedules or itemizations being discussed here.

http://www.bloomberg.com/...

The most mysterious of the unexplained mysteries about Mitt Romney’s considerable wealth is how he was able to amass between $21 million and $102 million in his individual retirement account during the 15 years he was at Bain Capital LLC. ... While there are limits to the amount that can be contributed tax-deferred to an IRA, there are no restrictions on the amount of money that the contributed capital can earn and can continue to earn, on a tax-deferred basis, even after the contributions have stopped. (The Internal Revenue Service will get its pound of flesh from Romney when he takes the money out of the IRA.) The only limit is the skill, or luck, of the IRA’s owner. If you are the Warren Buffett of IRA investors, it is conceivable that you could turn $450,000 into as much as $102 million -- an increase of 227 times -- but not very likely, especially as in the last decade or so, the stock market has been a roller coaster. Mere investing mortals would be lucky to still have $450,000 in the account. (The median American family has $42,500 in traditional IRAs, according to the Investment Company Institute.) For instance, after Bain bought Domino’s Pizza in 1998 for $1.1 billion, Bain partners (and the limited partners who went in on the deal) were able to get a slice of the equity of the company. Given the high leverage put into the pizza maker to finance its purchase, it’s a safe bet there was very little equity value at the start, meaning that shares with little book value could be contributed to the IRA. If Romney put $30,000 worth of Domino’s Pizza stock into his 1998 SEP-IRA, it is conceivable that it would be worth many times that amount when Domino’s went public in 2004. If Romney did the same thing over and over again during the 15 years he was at Bain doing leveraged buyouts, it is conceivable that the $450,000 would increase greatly in value. The other possibility, Kleinbard suggested, was not dissimilar to what Maremont theorized: that Romney contributed limited-partnership interests in Bain’s buyouts to his IRA. What was “quite troubling” to Kleinbard is that he suspected Romney may have contributed these interests to his IRA at a fraction of their market value -- “pennies on the dollar” -- and well below what he might have charged you or me. When the buyouts became successful, Kleinbard proposed, the pennies on the dollar were suddenly worth real dollars.

Johnny Wurster raises the point that by using such offshore "blocking corporations" to shelter his IRA holdings from description, a 990-T form is not required, and another commenter says the 990-T is filed by the IRS not the individual, so when Mac Bauchus and others ask why a 990-T was not filed they (we) are missing the point.

I"m not an accountant but I think the point is not really about the form itself, but that it calls our attention to details of how Mitt Romney structures his financial holdings, and how he interprets the "financial disclosure" requirement of our election laws.

While he may be technically within the law, he is certainly not complying with its spirit, which is to create transparency to facilitate informed voting in a Democracy.

His father suggested filing 12 years of tax filings was the right thing to do.

We have yet to get our questions answered about even one year of filings, and the itemization form for his Swiss Bank Accounts has not been submitted to my understanding.

The way I understand these use of these blocker corporations and the consequent lack of a 990-T report, is metaphorical similar to how the police interpret fleeing the scene of a crime -- while there may be a legitimate reason, unless explained, it can be interpreted as evidence of a guilty conscience.

It sure looks as if someone pretty smart was intent on structuring these vast foreign financial holdings in such as way as to avoid having to report the income, or any details of the exact holdings. Not illegal, but certainly something we as voters, have a right to ask about it.

And, if a candidate for the highest office in the land, tells us it's none of our business, and he is not legally required to explain it, I believe it is legitimate for us to use this response in our voting decisions, and also to make a political issues out of it to encourage others, if this is an example of the kind of attitude we want in our POTUS with regard to transparency, and respect for us as voters.

This Vanity Fair article was extensively reported by the author above, and contains this nuggets giving us insight into Mitt Romney's attitude towards the truth.

