Questions regarding legal aspects of John Oliver&#39;s debt forgiveness giveaway John Oliver made news a few months ago by purchasing nearly $15 million in outstanding medical bill debt for $60,000 -- less than a penny on the dollar. But, I read that cancellation-of-debt ("COD") is taxable income. How Oliver got around this ("...no tax consequences whatsoever...") seems odd... Oliver set up a dummy corporation ("CARP") and then as CEO of CARP, he negotiated the debt purchase (presumably from some other collection agency). But, rather than forgive the debt directly, CARP turned around and donated the debt to RIP, a charitable organization. Am I to understand that this second transfer was necessary in order to explicitly avoid the tax consequence of COD? I do understand that COD is taxable income, but "gifts" are not. CARP is a simple $50 setup-fee LLC (and presumably not a charitable organization), whereas RIP was/is an established 501(c)(3) charity. I'm assuming that Once CARP purchased the debt, it then had rights of ownership with respect to debt collection, i.e. it could (1) continue pursuing collections from the debtors, (2) do nothing with the debt, (3) forgive the debts individually or en masse, or (4) donate it to a charity (which is what it did). After CARP gave (donated) the debt to RIP, then RIP was free to forgive the debts (which is its explicitly-stated mission). Had CARP pursued option (3) above, then does that mean all that forgiven debt was/is taxable income as COD? ADDENDUM: I just now realized that, in a theoretical situation where CARP chose option (1) -- attempt to collect on the debt. Pretending that CARP successfully collected e.g. $1 million, is this simply money that CARP can keep? (Subject to corporate income tax, of course.) I'm also assuming that "purchasing" debt gives the purchaser rights of ownership such that any collected money from a debtor cannot be further claimed by previous creditors. Is this indeed the case?
Oliver or his shell corporation could have directly forgiven the debt as a gift to the debtors. As a gift, it would not have to be reported as income, according to the IRS. In that case, he would need to file Form 709 and he would have to pay federal gift tax. There is an annual exclusion of $14,000 per donee, which probably is a drop in the bucket. It may not be required to pay tax on gifts to a 501(c)(3) organization, since the gift-bump is offset by the associated charitable gift deduction. The charity can then forgive the debt as a gift (and as tax-exempt, would not have to pay gift tax). In that sense, the second transfer was necessary, although it would not have been if RIP had directly obtained the debt (or if CARP were a 503(c)(3)).
the first two highlighted parts seem to contradict each other. No, in this case they do not. The first highlighted portion refers to works or items produced "for or under the direction of the Company", whereas the second highlight refers to your creations that satisfy conditions (a) and (b). Where contradictions actually exist, the doctrine of contra proferentem entitles you (the non-draftsman of the contract) to adopt the portion or reasonable interpretation that favors your legal position. Also wondering how valid those statements actually are They are valid and become enforceable as soon as you sign the contract or your subsequent conduct reflects your acceptance thereof. it's a matter of privacy. So the question is what I can do or what the reality is of the situation The reality is that you are asked to sign a contract that is abusive and ridiculous. One vulnerability from describing your inventions (presumably in Appendix A) is that the employer gets "irrevocable, worldwide, etc" rights on them as soon as you "use or disclose any [items listed in Appendix A] when acting within the scope of [your] employment". This means that if instead of reinventing the wheel you share or apply any portion of your prior creations so as to enhance your productivity, you knowingly and irreversibly grant to the employer perpetual rights to those items. Legal disputes regarding APIs can become extremely intricate. And, since judges usually have no decent background on IT, even those few judges with integrity are unlikely to grasp the key subtleties that would lead to a correct ruling. "not useful with or related to any Company Interest" is very vague. The company could be interested in literally anything these days. Clauses which are too vague or excessively wide-encompassing are supposedly stricken as unconscionable, unenforceable, etc. However, I personally would foreclose upfront the risk of judicial hassle and decline the abusive contract. Legal issues aside, keep in mind that you are offering your expertise (in terms of supply &amp; demand, you are on the supply side). This fact has a less derogatory connotation than "asking for a job". Accordingly, the relation between the parties should be more leveled.
I am unfamiliar with a "perpetual contract" and that phase does not appear in any reported appellate court decision of the State of Oklahoma. However, usually unpaid utility bills do constitute a lien against the property that is enforceable against a subsequent purchaser, which has the same practical effect. This kind of obligation is also sometimes described as an "encumbrance". Usually, in an arms length sale of real estate through real estate agents, a title insurance company is hired and is responsible for determining if there are any outstanding liens, pro-rating utility bills, pro-rating property taxes, etc. at closing. If the title company fails to find a lien and there is one, the title company is responsible for paying off the lien that it failed to find (although it can often force the previous owner to indemnify it for the payment it has to make). It could be that since water service was not currently being delivered, that the title company did not search in the manner that it should have to find this lien, or it could be that there was no title company used and so no one ever checked. Also, if the property was conveyed with a "warranty deed" such a deed contains a promise from the seller that there are no liens or encumbrances not listed on the face of the deed that have to be paid, and the seller has liability for breach of the warranty of title. But, if the property was conveyed with a "quitclaim deed" there is no such warranty.
In business dealings, you would have a contract with a company, not with its owner. The new owner inherits both the assets and liabilities of the company. It's up to the buyer of the business to do due diligence before buying the company. The old owner may escape obligations to clients and suppliers once the sale of the business is complete, but the new owner could sue the old owner for fraud. (It may be possible to escape some liabilities by declaring bankruptcy, but that's not the situation you described. One unethical accounting trick that a company can use is to split the company into two corporations such that one branch inherits the liabilities, and it go defunct.)
I looked for a link to the CJIB pages on paying fines in monthly bits. It is here: https://www.cjib.nl/betalen-delen-aanvragen-voor-een-verkeersboete. He will have to make a request for such an arrangement at the CJIB himself. It will depend on what type of communication he has received from the authorities, and how quickly he responds to it.
There's some artistic license in play there - the US Treasury will replace damaged (or &quot;mutilated&quot; as they call it) currency for free under certain conditions. Lawful holders of mutilated currency may receive a redemption at full value when: (1) Clearly more than 50% of a note identifiable as United States currency is present, along with sufficient remnants of any relevant security feature; or (2) 50% or less of a note identifiable as United States currency is present and the method of mutilation and supporting evidence demonstrate to the satisfaction of the BEP that the missing portions have been totally destroyed. From your description they fail the first condition - they've burned it all so they aren't presenting &gt; 50% of a note, 0% is clearly less than 50% [citation needed] and they also fail the second condition as it doesn't seem that they are carrying any &quot;identifiable&quot; portion of the money. Further: No redemption will be made when: (1) A submission, or any portion thereof, demonstrates a pattern of intentional mutilation or an attempt to defraud the United States. In such instances, the entire submission will be destroyed or retained as evidence. The &quot;mutilation&quot; was clearly intentional in this case. and (4) Fragments and remnants presented are not identifiable as United States currency. Seems to reiterate that you have to present some identifiable remnants. I suppose if the Embassy worker was a Bureau of Engraving and Printing representative, or the affidavits they provided were sufficient to convince the BEP that currency of x value was present, and completely destroyed etc. then the only hurdle would be the &quot;intentional mutilation&quot; aspect. The &quot;intentional mutilation&quot; itself is illegal under 18 U.S. Code § 333: Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.
When you breach a contract, you can get sued in local court, and if you don't show up to defend yourself, default judgment will be entered against you. Then the aggrieved party will have to collect, but the court in Washington (to invent a jurisdiction) can't enforce an order against a person in Norway (to invent another jurisdiction). So the aggrieved party would need to take enforcement of the judgment to the Norwegian courts. In the actual case of Norway, this is fairly simple, you just call an attorney in Norway to do the paperwork. It might be harder if the other jurisdiction is Belarus. If you return to the US, even if there is a money judgment against you for the rent owed, you will not be arrested for that debt. Depending on the state (about half of the states), you might be arrested for failing to comply with a court order to pay the debt. The difference lies in refusing to comply with a court order, versus simply having a debt. The State Department conveniently lists the reasons for denying a visa. Owing money or having an uncollected judgment against you is not one of the possible reasons, in fact even having been ordered by a court to pay, ignoring the order, and the court issuing an arrest warrant does not make you inadmissible.
The shareholders can change who is the company director, but the company director runs the company (until he or she resigns or is forced to sign by the shareholders). So the company director is who has the say what happens in the company. If the contract is between Fred and John Smith directly, then I would expect John Smith to give the orders and to pay Fred. However, Tom is company director, so he can order Fred to stay off the company premises. He can't order Fred what to do, since there is no contract between Fred and the company, and the company won't pay Fred if it doesn't want to - it's up to John Smith to pay Fred from his own pocket. The whole setup is highly unusual. I would assume that the situation is unsatisfactory for everyone involved, so likely they will agree that the contract between John Smith and Fred is cancelled, that there is a new contract between Small Company Ltd and Fred, and from then on the company director gives the orders.