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Spring Cleaning or Post-indictment Clean Up?

Isn't it a little early for spring cleaning? I'm sure that it's got to feel good to clean up all that nasty paperwork... you know, the paperwork that's been demanding your attention for three years now? Yeah. I'll bet that's just what he's doing...

Indicted blogger, Mark Nickolas of the Bluegrass Report, has been very busy since his indictment last week on three counts of "willfully failing to file" his Kentucky state taxes. It seems he paid his back taxes after the indictment with funds from a foundation that he claimed was a 501(c)4 corporation. When this blogger and several other interested parties checked up on the facts, it was discovered that paying one's personal taxes with funds from a 501(c)4 corporation is most certainly illegal. Ooops! How forgetful can he be?

Now it would appear that, not only is Nickolas attempting to correct his three-year "mistake" by writing checks using illegal non-profit funds, he's also cleaning up another mess by dissolving the alleged 501(c)4 corporation called "Foundation for Kentucky's Future, Inc." I don't think this will matter to the IRS though -- it was illegal when he took donations claiming his foundation was a tax-exempt entity, period. Dissolving the corporation now has no bearing on the past.

For those of you who may be under the misapprehension that Nickolas was simply "forgetful" -- heck, who doesn't want to give a fellow human being the benefit of the doubt? -- I offer you another of Nickolas's absent-minded endeavors. It appears that he forgot about the taxes on that venture as well but back then Nickolas forced the Kentucky Secretary of State to dissolve the company for him.

I don't know about you but I certainly sense a pattern to Mr. Nickolas's forgetfulness... I certainly hope that the State of Kentucky will learn it's lesson about this particular tax-dodger and fully pursue this current episode of forgetfulness to its rightful and legal end.

Comments

Anonymous said…
Nickolas may have just invited more tax problems for himself. Changing status from a non-profit to for-profit takes a lot more than just spending $50.00 to file with the Secretary of State.

If a non-profit tax-exempt (c)4 dissolves, it's assets MUST be DISTRIBUTED to a CHARITY as required by FEDERAL TAX LAWS.

That means, Nickolas can NOT transfer the assets of the non-profit (c)4 to the for-profit.

Also, Nickolas can NOT simply change tax status. He must SELL the non-profit at fair market value. The money to the non-profit from the sale can ONLY be distributed to other CHARITIES.

His troubles do not end there ....

1. Bluegrassreport.org has NO Federal ID number
2. Bluegraassreport Legal Fund has NO Federal ID number
3. Foundation for Kentucky's Future Inc. is a CORPORATION and MUST follow all CORPORATE TAX LAWS as described by the Internal Revenue Service.

Therefore, it is AGAINST FEDERAL LAW to request donations for a entity with NO Federal ID number and FUNNEL it into a Corporation's bank account. OUCH.

The IRS STILL calls that Corporate Tax Fraud. Because BGR has NO Federal ID number.

HE STILL CANNOT COLLECT MONEY FROM BGR WEBSITE AND FUNNEL IT INTO THE FOUNDATION'S CORPORATE BANK ACCOUNT BECAUSE IT IS AGAINST FEDERAL TAX LAWS.

When will he consult the IRS before he makes business decisions???

By the way, Wonder if he paid employee taxes & filed annual returns for his "Samhill Thoroughbred Racing Stables" between 4/2004 and 11/2005???

Or Nickolas' other failed company which was dissolved because he "forgot" to file Annual Report.
Bluegrass Political Strategies LLC from 10/2003 through 11/2005.
Anonymous said…
I can't figure out the deal over at H-L. They are refusing to either investigate via the IRS OR they have investigated and are refusing to report what they found because it might hurt their pal's reputation????

I don't get it!
Anonymous said…
It appears that Mark's Foundation never actually applied for 501c4 status.

But, it was still a corporation (a Kentucky non-profit corporation, until it dissolved on December 31, 2006) and that corporation would have been obligated to file both federal and state income tax returns during the years it was in existence.

What does anyone want to bet that the Foundation for Kentucky's Future never filed a federal income tax return? It would have been hard to file one, since it didn't even have a Federal ID number.

This raises another question.

How was Mark paid by the corporation during the last two years?

He either was paid by the corporation as a regular employee with regular federal and state income tax withholding, or he was paid as an independent contractor.

But for either one of those options, the Foundation for Kentucky's Future would have to have had a Federal ID number, so that at the end of each year, it could either give Nikolas a 1099 (if he was paid as an independent contractor) or a W-4 (if he was a regular employee subject to withholding).

If there really is no Federal ID number for the Foundation for Kentucky's Future, this raises the question of exactly how they did pay him, and how they reported those payments to the IRS and the Kentucky Department of Revenue.
Anonymous said…
9:05. You make great points,
but let me clear one thing up. Actually, the poster above was incomplete

1. Bluegrassreport.org has NO Federal ID number
2. Bluegraassreport Legal Fund has NO Federal ID number
3. Foundation for Kentucky's Future Inc. DOES have a Employer Identification Number and therefore, IS a CORPORATION and MUST follow all CORPORATE TAX LAWS as described by the Internal Revenue Service.,

I actually went a step beyond what the H-L is doing and picked up the phone & called the IRS.

I don't understand why the H-L is just leaving unanswered questions out there.

Stamper said over the weekend that come Monday morning he would find out if the Felony Warrant was valid ... and yet, he hasn't reported anything. Makes me think Stamper does NOT want anyone to know that the felony warrant is valid.

All the tax statements on his pol watchers could be cleared up and reported if Stamper would just call the IRS and ask them about the allegations that have been posted on Pol Watchers.

Which makes me think, he HAS called the IRS and knows the allegations are correct, or he would have reported otherwise to help his criminal friend out.

So much for H-L credibility. Just Nickolas, both have lost credibility.

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