RSS Feed for this Blog

Thursday, November 01, 2007

News, Notes and Fights - Nov 1

- There was a fair amount of hype over Storm Marcopolo, an Argentinian import who made his U.S. debut for Ken McPeek at Churchill today. The trainer had told the Form that the horse "has trained like he could be any kind," said that the G1 DeFrancis at Laurel could be next, and spoke about the Golden Shaheen in Dubai too. But I guess those plans are on hold after he couldn't clear 12-1 Sharp Attack and faded to 6th, ugh. The unfortunately named Stormin Baghdad won for Asmussen. Another winner at CD for Mott, and check out Calvin Borel and trainer Ian Wilkes, the former assistant to Carl Nafzger. That combo won their second two-year old maiden race in two days, both at nice prices too; today with Isella at 6-1, yesterday a 9-1 winner in Jedi Code.

- The claim by the IRS that NYRA owes it $1.6 billion contains a stunning assertion; at least according to the accused. It is claiming that the association owes taxes on its gross handle rather than on its share of the takeout. That's not just a NYRA issue, but an outlandish declaration that could effect every track in the country. I'm hardly a tax expert, but seems to me that's like the IRS telling a business that they owe taxes on their total sales rather than their net profits. Thus, NYRA's attorneys say that this is a "landmark" case for the entire industry.

"It’s entirely new.....It looks as if the IRS is trying to change the way taxes are established, not just with respect to horse racing but with respect to the entire gaming industry. We have never been assessed any of these taxes previously." [Thoroughbred Times]
In addition, the IRS claims that NYRA is improperly deducting the property taxes on the land, because of the fact that its ownership is in dispute. Oh man. It is also claiming that a portion of NYRA's expenses should instead be allocated to OTB since the latter benefits so greatly from the races, yet offers nothing in return. Thus, it is disallowing $347 million in expense deductions!! Oh man!! OK, let me get this straight - OTB takes NYRA's signal and a lion's share of its business, but because OTB returns so little to NYRA, the IRS is claiming that some of NYRA's expenses should be allocated to OTB. Thus, less deductions, and more taxes owed by NYRA. And you thought NYRA was getting screwed by OTB before? Is there a tax lawyer or accountant out there that can shed some light on this for us?

NYRA says that its true liability is only 1% of what the IRS claims. One thing we don't need any clarification on is that if this tax claim holds, NYRA is out of business, plain and simple. The claim was filed in June, but it was Capital Play that brought it to the attention of the press, thanks for that bit of public service, mate.

- CP West won a minor stakes at Aqueduct today, and I would have bet against him for sure. Buffalo Man, briefly on the Derby trail after taking the Spectacular Bid and OBS Championship before getting hurt last winter, made his return and ran second. The two-day carryover Pick Six was hit to the tune of $164,081. I'm sure that many were eliminated in the 7th, won by Classic Marilyn at 16-1, and I'm a little pissed that I didn't pay closer attention to that race. Trainer John Hertler is a guy who can put over the longshots, and I'd noticed last night that he had two seconds with three starters at the meet. Just the kind of under-the-radar indication I look for in search of a trainer warming up. I also love the horse's name, as it always makes me think of the Classic Marilyn (Manson) album Mechanical Animals, one of my favorite musical guilty pleasures of all-time.

Speaking of guilty pleasures, I've been spending too much time of late at the website Hockey No explanation needed there. I think this site warrants a permanent slot over on the sidebar. Anyway, for you old-time hockey fanatics only, this fight from Saturday between the Flyers' Riley Cote and the Bruins' Shawn Thornton is getting ample support on the site for FOTY honors thus far in the young season. If you think this is not relevant to this blog, just imagine that it's Eliot Spitzer and Joe Bruno duking it out at center ice. Enjoy; I'm off to the Rangers game, see ya later.


Anonymous said...

Looks like team Bernardini (Darley, Albertrani & Castellano) have a promising prospect on their hands. Music Note, a 2 year-old A.P. Indy filly made a terrific impression winning a MSW at Aqueduct today. She won by 7 and ran the mile in 1:34 and change (just a fraction off CP West's time in the following race). Durkin noted how easily she "glided" home.

Anonymous said...

i think the deputy horse got seasoned today in the stakes at AQU


Anonymous said...

Alan, interesting stuff from the IRS with respect to NY. As someone who works in the tax field I can tell you that positions like this are going to become more common from the IRS. Since tax revenues are not growing as fast as government expenditures the IRS has to resort to stricter (or more agressive) enforcement in order to generate revenue. It's one of the hidden costs of not raising taxes to meet spending, or for failing to reduce spending to meet revenues.

I am quite surprised that the IRS would make the claim that they have as on it's face it seems exceptionally agressive on their part. I'm guessing that we'll see a united front from tracks against this move by the IRS.

Anonymous said...

One more item...
I'm going to do a little digging tomorrow and over the weekend on this tax issue as it really seems crazy the more I look at it. If I had to take a guess at what the IRS is trying to do it would be that they are targeting a big fish for a new "interpretation" of the tax laws. Sometimes the IRS does things like this because they get a memo from Treasury that says something to the effect, "we need to generate more revenue, start focusing on X industries and looks for ways to increase tax liability". Usually this occurs after a change in the Administration as a new regime will have new priorities. Why this is happening now is really a big question.

Teresa said...

Does it make me a bad person and a stupid bettor that I can't ever even think of betting on Classic Marilyn because Francesa is one of her owners?

Anonymous said...

Curlin's owners currently not in the pokey want to SELL!

One wants to sell at auction, another wants to sell privately. Stay tuned.

It's also a shame that the Cunnignhams, currently in the Kentucky pokey, are allowed to keep things going on the racing side. Where is the integrity in allowing people in jail to allow their horses to run in their name?

Anonymous said...

The IRS claim is completely without merit, should be shot down quite easily by a competant tax attorney.

As another commenter stated above, it is common practice by the IRS to send out a wide sweeping tax notice in conjunction with a standard audit. I began to be more specific but do not feel like giving NYRA free tax advice.

This has been going on for ages (or at least the 30 years that I have been practicing, which seems like ages) and has nothing at all to do with the current state of the deficit.

Standard Operating Procedure, no political motives or grand proclamations from higher in the administration.

I would ask why did it get this far in the process? NYRA must have ignored for some time for this to arise to the level of claim in bankruptcy court.

And if they admit to owing 1% that still totals $16 Million, not chump change.

SantaBarbarian said... fights! YEAH, baby! :-)