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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPrivate Prison Companies Find Loophole to Avoid Taxes
An obscure tax loophole intended for real estate trusts is now being used by private prison companies and other businesses to avoid paying federal taxes.
Real estate investment trusts (REIT) were created during the Eisenhower administration to help companies that concentrate their business in real estate holdings by reducing or even eliminating the payment of corporate taxes. Typical REITs are companies that own shopping centers, malls, office buildings, apartments and mortgages. But now Corrections Corporation of America (CCA) is using REIT status as a golden ticket to reduce its tax bill.
CCA, which owns and operates 44 prisons and detention centers, and another private prison operator, the Geo Group, have successfully argued to the Internal Revenue Service that the money they collect from governments for holding prisoners is similar to rent, thus qualifying them as an REIT.
CCA expects to save $70 million in tax payments for this yearat a time when federal agencies are cutting billions from their budgets due to Washingtons fiscal problems. The IRSs loosening of restrictions on REITs has led to other companies claiming they are real estate trusts, including casinos, owners of cell phone towers and data storage companies.
http://www.allgov.com/news/where-is-the-money-going/private-prison-companies-find-loophole-to-avoid-taxes-130424?news=849838
russspeakeasy
(6,539 posts)datasuspect
(26,591 posts)baby wants to be safe. baby needs big police daddy to make him feel safe.
does home depot sell big buckets of badge polish?
Initech
(100,080 posts)We could seriously have a balanced budget if we made storing money overseas a federal offense.
Nye Bevan
(25,406 posts)It's up to Congress to close loopholes, not the IRS.
HiPointDem
(20,729 posts)get to avoid taxes just because you're an reit anyway?