<
https://www.techdirt.com/2023/07/31/the-weird-trademark-issue-that-shows-up-in-the-harlan-crow-clarence-thomas-mess/>
"I didn’t think we had much reason to write about all of the Harlan Crow /
Clarence Thomas stuff that I’m sure you’ve read elsewhere. But the latest (in a
now increasingly long series) of mind-blowing revelations from
ProPublica
regarding the relationship between the billionaire and the Supreme Court
Justice… actually has a somewhat bizarre trademark angle.
The story is about how Crow was able to cut his tax bill thanks to getting
Clarence Thomas to take free rides on his superyacht. The real issue here is
less about the Crow / Thomas relationship, and much more about the tax
loopholes for the ultrawealthy. Specifically, the report notes that the
ultrawealthy can deduct from their taxes by claiming that their yachts and
private jets are actually used commercially, generally for chartering.
In order to claim these sorts of deductions, taxpayers must be engaged in a
real business, one that’s actually trying to make a profit. If expenses
dwarf revenues year after year, the IRS might conclude the activity is more
of a hobby. That could lead to the deductions being disallowed, plus
penalties. Nevertheless, the ultrawealthy often pass off their costly
pastimes, like horse racing, as profit-seeking businesses. In doing so, they
essentially dare the IRS to prove otherwise in an audit.
For a yacht owner to meet the legal standard of operating a for-profit
business, said Michael Kosnitzky, co-chair of the private client and family
office group at the law firm Pillsbury Winthrop, “You have to be regularly
chartering the yacht to third parties at fair market value,” typically
through an independent charter broker.
However, the
ProPublica reporters interviewed “around a dozen former crew
members” of Crow’s superyacht, and none of them remember the boat ever being
chartered.
And here’s where the trademark issue showed up. Crow tried to trademark the
name of the yacht (the Michaela Rose), but, of course, for there to be a
trademark, it needs to be used in commerce. This seems like a weird game of tax
loophole chicken, where in order to get the IRS to believe the boat was being
chartered, he (or his tax attorneys) tried to get the boat trademarked, to
claim it was used in commerce. Basically, he had to convince either the IRS or
the Trademark Office to believe him so that he could then convince the other
one.
So the lawyers made up a pretty simplistic brochure to pretend that the ship
was available for charter and submitted it with the trademark application."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
