January 18, 2010
The Huffington Post’s coverage of the corporate world’s reaction to the terrible earthquake in Haiti last week has prompted a ludicrous and frankly reprehensible reaction from HuffPost readers – many of whom seem to think that businesses should have some kind of minimum donation amount. I am on the board of a company which donated $2.5 million to the relief effort, and I am very pleased that we have made such a commitment. We donate over $50 million to charitable causes around the world every year. But these are planned and executed after months of extensive research and assessment to ensure that the money will get into the right hands. I know that many businesses do the same, and so for any major corporation to make a million or more available straight away is incredibly trusting of them – even to major international organizations such as the Red Cross or AmericAid, who often get bogged down in disruptive administration costs. But the arguments being posted are not about the generosity displayed but of the amount. Corporations are businesses and businesses are for shareholders. In a purist’s economy, it would be shareholders making the donations, not the businesses, and I’m sure many shareholders in many corporations have. But that still doesn’t negate the fact that donating and philanthropy are not the activities of a business, they are the activities of individuals. So many are calling on bankers to open their coffers and empty them onto Haiti. I can tell you — coming from a family of bankers — that many are doing so. Privately. A CEO of one of the top five banks in America (who lives in my building) told me that he had personally matched the donation made by the bank he runs. How can that not be generous? I agree that the amount you give to charity should bear relation to the amount you earn or have in capital. But that only applies to individuals. For companies, their job is to make capital for their shareholders and nothing more. As for PR and cheap publicity — well, there may be something to that. I think that’s probably why most companies have given anything at all. But Rothschild Estates (the company I’m on the board of), for one, does not get any publicity at all, operates a portfolio of $20 billion, and I can honestly say, donates just for the sake of others. In fact, I was surprised we even made it onto the HuffPost’s list of donors! There are many more just like us who didn’t make the list, and aren’t reported, but donate anyway because of the need to help others. All I can say is — don’t lose faith in business simply because of the amount they give. Philanthropy is a deeply personal thing. It is the act of kindness from one human being to another. That is a true for bankers and businessmen as it is for any other professionals. Anyone who says that someone else hasn’t given enough should look to themselves before they criticize. Stefan de Rothschild is the Executive Director of the Rothschild Foundation for the Arts. You can visit their website here .
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December 22, 2009
WASHINGTON — Want to keep IRS auditors away? Keep your earnings under $200,000 and they won’t bother you 99 percent of the time. IRS enforcement numbers, released Tuesday, show that returns under that amount have a 1 percent chance of getting audited. Returns showing income of $200,000 and above have a nearly 3 percent audit chance. The percentage jumps to more than 6 percent for returns showing earnings of $1 million or more. The percentages apply to both individual and joint returns. The number of audits jumped 11 percent from 2008 to 2009 for returns with earnings of $200,000 or more, but rose 30 percent for returns showing earnings of $1 million or more. For those under $200,000 the number of audits remained steady. The IRS conducted 1.4 million audits of individual returns in the financial year ended Sept. 30, with more than 1 million conducted through correspondence with the taxpayer. The others were conducted through face-to-face meetings with IRS auditors. The IRS does not do random audits, but does conduct “research audits” that will test compliance in business tax categories. In 2010, the target will be payroll taxes, according to Steve Miller, deputy commissioner for enforcement. What happens if you’re audited while unemployed? The IRS may give you a break. “While our assessments were up, the ability to pay went down drastically” due to the economy, Miller said. “We have a series of tools. We can have them pay partially, over time. If the money is not collectible, it’s treated as non-collectible. It’s going to depend on each case. “We have to ensure there’s a balance between our responsibility to collect taxes with economic realities. We give people more time and determine how fast they can pay and whether they can pay.” The total revenue collected from IRS enforcement actions, $48.9 billion in 2009, is a drop from $56.4 billion in 2008 and $59.2 billion in 2007. Miller said the higher numbers in 2007 and 2008 reflect collections from settlements of several major tax shelter cases and other enforcement actions. In 2007, for example, the IRS resolved disputed tax issues with drug maker Merck & Co., Inc. and its subsidiaries. Merck has agreed to pay approximately $2.3 billion in federal tax, net interest and penalties to resolve issues that had been in dispute for tax years 1993-2001. The resolution was one of the largest achieved in recent years by the IRS and a taxpayer through the examination process. The IRS has stepped up its examination of tax-exempt organizations, checking the books of more than 10,000 groups in 2009 compared to 7,800 the previous year. The number of business tax returns examined was down slightly in 2009 from the previous year.
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