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The royal family

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Harry and Meghan doing alright in the US, continuing their universal service

697 replies

notanotheroneagain · 12/10/2022 07:24

Have heard a few comments from panellists and commenters thinking that Harry somehow wants to come back to the UK?

I highly doubt this. I think they are doing more than ok in the US.

A pity a positive thread has been deleted regarding the podcasts, maybe the positive conversation can continue here?

In particularly I wanted to highlight the announcement that they will be recipients for the Robert J Kennedy Human Rights award.

“When The Duke and Duchess accepted our award laureate invitation back in March, we were thrilled. The couple has always stood out for their willingness to speak up and change the narrative on racial justice and mental health around the world,” Kerry Kennedy, president of Robert F. Kennedy Human Rights, and Robert F. Kennedy's daughter, said in a statement shared today. “They embody the type of moral courage that my father once called the ‘one essential, vital quality for those who seek to change a world that yields most painfully to change.’”

Harry and Meghan doing alright in the US, continuing their  universal service
Harry and Meghan doing alright in the US, continuing their  universal service
Harry and Meghan doing alright in the US, continuing their  universal service
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onlylarkin · 28/10/2022 05:32

Here is information on the IRS classification.

They are a 501c3 tax exempt organization. I found this site that explains a 501c3 fairly well. www.501c3.org/what-is-a-501c3/

The IRS did confirm they are a public charity (vs a private foundation), for tax purposes. This surprised me because I don't see anywhere they are taking public donations yet. Here are the IRS rules for a public charity:

Public Charities
A public charity is designed for one purpose – to operate programs directly benefiting the public. As such, the IRS requires public charities to meet this designation in three ways. First, the IRS requires that a public charity restrict its activities to that charitable purpose. Secondly, public charities must obtain no less than 1/3 of their funding from the public, either individuals or other public charities, as opposed to private foundations, corporations, or major donors. This is known as the “public support test”, wherein individuals (small donors giving no more than 2% of the nonprofit’s annual operating income) or public charities comprise no less than 1/3 of the annual operating budget.
The third qualification of a public charity concerns the governing board of directors. In a public charity, individuals related by blood, marriage or business co-ownership must comprise less than 50% of board seats. Additionally, while members of this board may be employed by the organization they govern, there are strict rules that such decisions must be “at arms-length” and without private benefit to insiders. As such, a quorum (minimum number of participants required to make a meeting or vote valid) must be possible without including any board members related by blood or business association. This is the “organizational test” of qualification for status as a public charity.

The other information is the Public Charity Status codes. They are listed as 170(b)(1)(A)(vi)

I have this information if you want to see it, but all I have is a link to the IRD Google file so I am not sure if a link will work. If you copy and paste it it shoudl come up. chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/www.irs.gov/pub/irs-tege/eotopicj93.pdf

That long number is this: Organizations Receiving Substantial Support from a Governmental Unit or from the General Public (IRC 509(a)(1) and 170(b)(1)(A)(vi)).

Don't let the word government scare you. Archewell is not being funded by the government. It is all encompassing legalese. The document says:

"Organizations described in IRC 170(b)(1)(A)(vi) are charities that normally receive a substantial part of their support from governmental units and/or from direct or indirect contributions from the general public. The "substantial part of support" requirement is met by satisfying a 33 1/3 percent support test or, alternatively, a "facts and circumstances" 10 percent test. The cash basis of accounting must be used.

The percentages are calculated by using total support as the denominator and public support as the numerator. Both the 33 1/3 percent support test and the 10 percent "facts and circumstances" test generally measure an organization's public support over a four-year period; new organizations, however, have a shorter period of measurement. These measuring periods are intended to test whether an organization "normally" receives public support. Therefore, the steps to be taken in determining whether an organization qualifies for classification as an organization described in IRC 509(a)(1)/170(b)(1)(A)(vi) are as follows: (1) Know what is included in total support (the denominator); (2) Know what is included in public support (the numerator); (3) Know what is the proper measuring period to determine whether the organization "normally" receives public support; and (4) Make the calculation -- if the organization does not receive 33 1/3 percent public support, determine whether the "facts and circumstances" of the 10 percent test are satisfied. B...

So, I have no idea what all that means, but I know at least one other poster here is fluent in charity workings and this may all mean something to them. Hopefully you can open that document I linked and make heads or tails out of it.

Tomorrow I will be looking at the Delaware part of this registration and what had to be filed in CA, because they do have an address and a representative in LA. IIRC incorporating in DE while doing business in CA means they have to file under a system called a foreign entity.

One thing I am keeping at the back of the mind is that there are Federal income tax filings, which they do not have to pay due to their exempt status. Delaware does not charge taxes on companies incorporated there but having headquarters. Not sure without more research what a foreign entity would need to pay taxes in CA.

Sorry I am taking over this conversation. If I need to talk it elsewhere or start my own thread I am happy to do so.

Readinginthesun · 28/10/2022 09:29

@onlylarkin I don’t profess to understand it all but thank you for investigating .

Ohnonevermind · 28/10/2022 17:19

I’m in ireland, there’s a famous very rich man quite close, who through tax planning, is able to avoid paying most taxes, which is perfectly legal and saves him multi- millions every year

But people say what a great guy he is, giving 10m here to his local gaa football team (non professional sport) and giving money to local schools with great fanfare.

He doesn’t have to pay tax which goes to the boring stuff like road maintenance and tax offices, he gets to ‘choose’ where he pays his money and get plaudits to it.
We’d all like to not pay tax and pick where we donate money but us ordinary folk just have to hand over our taxes to the government

This foundation industry in the US sounds rather the same.

PeaceX · 28/10/2022 17:50

Oh who's this wonderful tax dodging benefactor? @Ohnonevermind
Yes, I agree, it'd be lovely for mere mortals to choose what their taxes were going to be spent on.

Ohnonevermind · 28/10/2022 18:04

www.irishexaminer.com/opinion/arid-20473304.html

onlylarkin · 28/10/2022 18:42

Any country can fix the tax loopholes at any time, but chose not to. 🤷‍♀️

Ohnonevermind · 28/10/2022 18:58

There are many people who make a lot of money finding ways to stay ahead of the loopholes, once one closes, they find another.

the US tax code is far more complicated than ireland so has the potentials

Foundations enable people to avoid being tax contributors and instead be benefactors.

onlylarkin · 29/10/2022 00:12

Interesting that he is basically stateless. I didn't even know that could happen.

My first thought is that we cant compare personal wealth loopholes to corporation foundations, apple to oranges. Though I am sure the people involved in both intersect of course. Meghan and Harry are not giving away their personal wealth through Archewell in order to not pay taxes though. They are taking donations from others and distributing them to charities in need.

We wont know what tax rates they are paying individually nor what their corporate tax rate will be until they have a full year on the books.

Personally they are subject to 37% plus up to 20% on any capital gains personally.

Corporate would be a flat 21%

Of course, it is not that simple at all.

Coronateachingagain · 29/10/2022 04:55

They must obviously own more than one company, it will be interesting to see if any of the other companies may a "donation" to the foundation and how it all works from a tax perspective.

onlylarkin · 29/10/2022 04:59

Are you saying that Meghan and Harry own more than one company? Because that is simply not true.

She/they does own stock in other companies, but every single millionaire in the US own stock in other companies. That is how they maintain wealth. Shareholders have to pay taxes on dividends and capital gains tax when selling the stock. But she does not hold enough stock in any one company to give her a voice in running the company.

MidnightConstellation · 29/10/2022 05:26

I’m wondering what Harrys tax status is now. He lives in the US. Does that not mean he is paying tax in two countries? Surely things must be quite complicated from that point of view.

Coronateachingagain · 29/10/2022 05:27

onlylarkin · 29/10/2022 04:59

Are you saying that Meghan and Harry own more than one company? Because that is simply not true.

She/they does own stock in other companies, but every single millionaire in the US own stock in other companies. That is how they maintain wealth. Shareholders have to pay taxes on dividends and capital gains tax when selling the stock. But she does not hold enough stock in any one company to give her a voice in running the company.

Well, you will never know how many companies they own! Directly or indirectly. Most likely, Delaware incorporated somewhere along the chain.
And you will never know how much tax they pay as a result either.
My point is that obviously the visible company is just one part of the puzzle.

MarshaMelrose · 29/10/2022 12:28

Are you saying that Meghan and Harry own more than one company? Because that is simply not true.

Apparently they have set up 11 companies and a trust in Delaware.

Ohnonevermind · 29/10/2022 13:40

@MarshaMelrose

and they probably have some offshore companies, in the Caymans etc

Coronateachingagain · 29/10/2022 14:32

Ohnonevermind · 29/10/2022 13:40

@MarshaMelrose

and they probably have some offshore companies, in the Caymans etc

Yep. Depending on the advice they got they would have opened a few international ones - Luxembourg, Ireland, Netherlands being usual choices in Europe - and yeah Cayman, Bermuda etc
They have a well oiled machine for sure. Especially with the book release in all those countries! 😅 imagine - each tax jurisdiction suitably optimised.

notanotheroneagain · 29/10/2022 14:58

Ohnonevermind · 29/10/2022 13:40

@MarshaMelrose

and they probably have some offshore companies, in the Caymans etc

Please link this

OP posts:
Ohnonevermind · 29/10/2022 15:48

@notanotheroneagain

This is standard business practice. If they had tax advise to set up a foundation, their advisors would have also worked out how to minimise their tax bill, which usually involves
quite complicated structures including offshores depending on all their income sources.

Coronateachingagain · 29/10/2022 15:55

Yep. And on top of it it could be very difficult to track - like the opaque company in Caymans may own other companies in more transparent jurisdictions. Which is exactly what they would want, keep everything behind curtains.

MarshaMelrose · 29/10/2022 16:17

I don't think they've automatically set up in the Caymans. And even if they did, it doesn't mean it's a tax fiddle. I think the opacity of Delaware laws serves them just as well.
And it's interesting that their charity is a public charity so they can receive donations. I think that should make the charity more transparent but under US rules I don't know if it will.

Ohnonevermind · 29/10/2022 16:40

I’m rusty, but the US likes to get its paws on all worldwide income, so companies will be structured help to limit the US governments reach to US income only
It’s not illegal, I’d do it myself. We just would never know how it was structured, and don’t need to know either as these things don’t need to be publicly filed

BellePeppa · 07/12/2022 13:49

notanotheroneagain · 12/10/2022 08:51

Maybe you should breath, because H&M have been together for 6.5 years now. Don't see them spitting up anytime soon. The 3yrs divorce everyone was hoping for has long passed.

As for the book, Harry gets slagged off all the time, so I think a book is needed to set the record straight, and stay in history books as a reference. Why is everyone else doing a write up about him without corrections.

Will they always write rubbish about him? Very likely. As far as I'm concerned, he can keep on releasing books to set the record straight as long as lies and misinformation goes on about him.

Lies and misinformation? I thought that was Harry’s ‘specialist subject’ (though he’s no Mastermind).

Coronateachingagain · 07/12/2022 19:23

So we have Netflix in December, a book in January, and I wonder what February will bring 😅 #PRplanning

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