Too many cooks

Posted: 06/13/2016 in Screwed
Tags: , ,

Way back in the stone age when I was a newspaper editor, the sign outside my door said simply “Editor”.  But I got soooo much help from every slack-jawed yokel who offered their advice on what I was doing wrong, that I replaced it with a sign that said “Everybody’s an Editor”.  Nobody got the joke.  I finally decided, but wasn’t allowed to put on my door, that my great-uncle Julius said it best: “Every cook’s gotta piss in the soup.”

Remember my heart-warming story about John Oliver the other day?  Well, welcome to Hell’s Kitchen, courtesy of David Dayen:

It turns out to be surprisingly difficult to cancel debt, or at least to do it in a way that helps rather than hurts the debtor. If “Last Week Tonight’s“ fake company just discharged the debt – and they would have to do so to ensure its death – the borrower would have to report that forgiven debt on their taxes as earned income. It’s the same problem with mortgage and student loan debt, which when forgiven can trigger a big tax bill for someone without the money to afford it (a bill in Congress has delayed this situation for mortgage debt, but it’s always precariously close to expiring).

There may have been good reasons for this once, but in practice, it means the Rolling Jubilee or “Last Week Tonight” must structure themselves as a tax-exempt organization to allow them to gift debtors without handing them tax consequences, pulling them up with one hand and punching them down with the other. In this case, “Last Week Tonight” transferred the debt to RIP Medical Debt, a 501(c)(3) non-profit organization set up to receive donations to relieve medical debts.

Except RIP Medical Debt is not a 501(c)(3) yet; they are “awaiting IRS recognition.” So if the IRS denies their status, the borrowers could be on the hook. The only way they really would deny such status is if someone bothers to complain. But if, say, a high-profile HBO show elevated the awareness of the situation, what’s to stop a debt buyer from complaining? And in a potential Administration of a certain Republican eager to use government as a weapon to punish enemies, what’s to stop the IRS from screwing John Oliver, and regular debtors besides?

John Oliver’s “HBO Show” didn’t elevate the awareness of the “if anyone complains then everyone get screwed” loophole, David, you did.  But thanks for telling an even bigger audience the way that they too can piss in the soup. (Where is the sarcasm font when you need it?)

CookSoup2

Be seeing you.

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