US justice department goes after Timeshare "donation" company Donate for a Cause

[theo]

<snip> ...I haven't heard any reports that timeshares were abandoned into viking ship LLC's- I doubt if there is much the resort developers can do to stop him either..

Fwiw, I distinctly recall Saintsfanfl overtly asserting (months ago) that Tarpey's operation has indeed utilized Viking Ship sailings as a course of last resort to dispose of unmarketable timeshare "cargo". More recently, it has been asserted in post #169 of this very thread. I claim no first hand knowledge of the accuracy of the assertion, but it has been openly put forth here on TUG for some months now and I for one certainly have no reason to disbelieve it.

I'm no tax expert and I don't claim to know the veracity of whatever (ahem) "appraisers" Tarpey's operation may have used or uses currently (I'm betting that the IRS has a viewpoint on that however, particularly with one of the (ahem) "appraisers" reportedly being Tarpey's sister Suzanne). Regardless, I find it very difficult to believe for even one brief, passing moment that any timeshare which required several thousand dollars in accompanying cash just to get accepted as a (ahem) "donation" --- and then subsequently got resold on eBay for a buck --- can ever credibly claim to actually have any "fair market value" whatsoever.

The "fair market value" of something of no resale demand and no resale market value at all would seem to me to be precisely zero --- but what do I know?

 

[pedro47]

I wish the justice dept would go after the sale people who sell time share properties to senior citizen at those inflated prices.

 

[theo]

I wish the justice dept would go after the sale people who sell time share properties to senior citizen at those inflated prices.

On what legal basis would / could the U.S. Department of Justice possibly attempt to do so? Alleging what particular actual violation of Federal law or regulation(s)?

Aggressive selling to willing buyers (of whatever age) who have voluntarily and willingly chosen to enter into the sales pen and thereby willingly make themselves available to be "sold" is certainly not unlawful in any way, shape or form (although, that being said, let me be very clear that I nonetheless personally have nothing but unmitigated contempt for those hungry, exaggerating and deceitful sales weasels). I dare say that the concepts of "free enterprise" and Caveat Emptor (Buyer Beware) may both apply here. In yesteryear there were snake oil salesmen --- today there are timeshare sales weasels. Both require willing, voluntary buyers.

In an ideal world, developer sales weasels would be legally required to provide printed, objective information on resale procedure (while also very openly acknowledging the inherent difficulty of resale and the very limited resale market) as well as providing accurate information on historical resale value of the "product" (always much less than "retail", often none at all), rather than continue to be allowed to peddle interval ownership as some sort of "good financial investment", which it most certainly has never been, is not now and will surely never be.

Unfortunately however, we do not live in that ideal world and those above-described legal requirements are just wishful thinking and do not exist at this time.

 

[presley]

I wish the justice dept would go after the sale people who sell time share properties to senior citizen at those inflated prices.

I agree. It's too bad there isn't a law that says people at a certain age have to have a personal attorney present during contract signing. For now, it's a legal way to scam the elderly out of their money.

 

[Saintsfanfl]

Fwiw, I distinctly recall Saintsfanfl overtly asserting (months ago) that Tarpey's operation has indeed utilized Viking Ship sailings as a course of last resort to dispose of unmarketable timeshare "cargo". More recently, it has been asserted in post #169 of this very thread. I claim no first hand knowledge of the accuracy of the assertion, but it has been openly put forth here on TUG for some months now and I for one certainly have no reason to disbelieve it.

It appeared to have occurred. To what scale I have no motive to do the research but I coincidentally discovered some Orlando deeds while doing a search. The deeds were transferred directly between a Tarpey entity and a well known "Dr. Rich" viking ship entity. It obviously makes sense if Tarpey was not being selective on the deeds transfered to the "charity" or the charity itself would eventually be forced to become a viking ship, intentional or not.

The deeds are public record and readily available for free online. I only found a couple at one resort but that is all I looked for.

 

[theo]

<snip> ...if Jim decides to keep the charity operational...<snip>

Maybe not Tarpey's decision to make at all. As I understand things, DOJ is actually seeking an injunction to flat out shut down his "donation / appraisal" operation.

 

[taterhed]

Fwiw, I distinctly recall Saintsfanfl overtly asserting (months ago) that Tarpey's operation has indeed utilized Viking Ship sailings as a course of last resort to dispose of unmarketable timeshare "cargo". More recently, it has been asserted in post #169 of this very thread. I claim no first hand knowledge of the accuracy of the assertion, but it has been openly put forth here on TUG for some months now and I for one certainly have no reason to disbelieve it.

I'm no tax expert and I don't claim to know the veracity of whatever (ahem) "appraisers" Tarpey's operation may have used or uses currently (I'm betting that the IRS has a viewpoint on that however, particularly with one of the (ahem) "appraisers" reportedly being Tarpey's sister Suzanne). Regardless, I find it very difficult to believe for even one brief, passing moment that any timeshare which required several thousand dollars in accompanying cash just to get accepted as a (ahem) "donation" --- and then subsequently got resold on eBay for a buck --- can ever credibly claim to actually have any "fair market value" whatsoever.

The "fair market value" of something of no resale demand and no resale market value at all would seem to me to be precisely zero --- but what do I know?

I think you know a fish when you smell it!

 

[team2win]

values

Richard Marquette a commentor on this article brings out points that I was about to make. Cause this will be very interesting as to how they determine the value of a timeshare. They are saying the prices are inflated but does this now mean, you can call any timeshare worthless or not valued at the price. I will anxiously be waiting for the fallout of this.

I agree that this will never come to a court. Settlement out of court on both sides is the most likely scenario.

http://www.bozemandailychronicle.co...r.it&utm_medium=twitter&utm_campaign=bozchron


we have warned against using the awful tax advice given by most timeshare "donation" companies, but it usually falls on deaf ears.

hope this opens some eyes...and I REALLY hope they dont dig into client records to trigger audits for folks that took these illegal deductions!

 

[team2win]

DOJ talk a lot

You will learn probably in this case, just because the DOJ says something, doesn't mean its actually true. They are basing charges loosely on existing laws. What they can end up proving is a different matter altogether.
My simple scenario could be, if a timeshare is selling on tax records for a certain amount and there is an average because of DEVELOPER sales, then as you know the value will be higher. Pretty simple, which now means inflated deduction will be legit. Because the DOJ doesn't like it, doesn't mean this will be prosecutable. This will be a long thread.. lol..

As many have said, who is really responsible for putting a tax deduction on their irs tax form.

Apparently, the US Justice Department does not agree with you...

 

[Jason245]

You will learn probably in this case, just because the DOJ says something, doesn't mean its actually true. They are basing charges loosely on existing laws. What they can end up proving is a different matter altogether.
My simple scenario could be, if a timeshare is selling on tax records for a certain amount and there is an average because of DEVELOPER sales, then as you know the value will be higher. Pretty simple, which now means inflated deduction will be legit. Because the DOJ doesn't like it, doesn't mean this will be prosecutable. This will be a long thread.. lol..

As many have said, who is really responsible for putting a tax deduction on their irs tax form.

Inflated deductions are not legit. Read the tax code.

Sent from my SAMSUNG-SM-N910A using Tapatalk

 

[theo]

Inflated deductions are not legit. Read the tax code.

Exactly so. Fair market value is very clearly and specifically defined in the tax code, whether or not people like, acknowledge, or choose to accept that indisputable fact.

There are two very separate and distinctly different issues here. The DOJ effort and focus will undoubtedly be directly upon James Tarpey and the likely completely bogus (...ahem) "appraisals", some reportedly conducted by a family member (his sister, to be precise).

I agree that the matter will likely be settled out of court without trial (but with substantial penalties imposed). However, I will also speculate that Tarpey's "donation and (...ahem) "appraisal" operation will ultimately be shut down entirely, by mutual agreement, unless legitimate appraisals are adopted (...for the very first time).
We shall see...

The distinctly separate issue of inflated and ineligible deductions claimed by taxpayers is within the IRS purview and will presumably be pursued separately and actively by the IRS against those "participating" taxpayers, all of them very easily identified from Tarpey's own records, particularly in view of the millions of dollars in lost tax revenue resulting from improper deductions based upon completely bogus (...ahem) "appraisals". Again, we shall see...

 

[sue1947]

You will learn probably in this case, just because the DOJ says something, doesn't mean its actually true. They are basing charges loosely on existing laws. What they can end up proving is a different matter altogether.
My simple scenario could be, if a timeshare is selling on tax records for a certain amount and there is an average because of DEVELOPER sales, then as you know the value will be higher. Pretty simple, which now means inflated deduction will be legit. Because the DOJ doesn't like it, doesn't mean this will be prosecutable. This will be a long thread.. lol..

As many have said, who is really responsible for putting a tax deduction on their irs tax form.

The value of your timeshare is what somebody will pay YOU for it. If you have to pay somebody to take it away, it has no value. Rationalize all you want, but it doesn't change that very basic economic fact.

Sue

 

[dioxide45]

The value of your timeshare is what somebody will pay YOU for it. If you have to pay somebody to take it away, it has no value. Rationalize all you want, but it doesn't change that very basic economic fact.

Sue

But that isn't how they appraise residential real estate. An appraisal for residential real estate is done by using comps. Looking at recently completed home sales of similar homes in the same neighborhood or area. The ultimate value is what you end up selling it for. That might be more or less than it is appraised for at any given time.

I guess the issue is are the appraisals inflated or are they realistic. That is really up to the DOJ to determine and sue DFC if they deem they are providing appraisals that put an unrealistic value on the timeshare.

Also, even with an appraisal, can the person donating their timeshare really be able to take the deduction for the appraised value when the true value was determined to be less than zero since they had to give it away and pay fees to do so.

 

[VegasBella]

The thing is, county assessors are also supposed to use fair market value. They often don't... but they claim that's what they use. You can dispute their assessed value of your home or timeshare on the basis that what they've assigned is not market value and you provide evidence of comparable properties. (Good luck with that - I tried arguing that the timeshare I bought resale for $5k wasn't worth the $20k the tax man said it was and I lost. But I'm fairly certain that if I "donated" that timeshare and claimed a $20k deduction I'd also get dinged by the tax man.)

Soooo... someone who is assessing the value of a timeshare should be able to use the value that the county has assigned for property taxes. The sad FACT is that anyone assessing the value of a timeshare is going to have a hard time because the market for resales is so small - most people don't even know about it.

And that fact is the reason why developer sales are IMO fraudulent - because they will often deny that comparable resales exist. They will often outright lie about what the comps are.

 

[LannyPC]

developer sales are IMO fraudulent - because they will often deny that comparable resales exist. They will often outright lie about what the comps are.

They will lie about other things too. And of course they will deny that comparable resales exist (as well as conceal other important, pertinent facts that a potential buyer should know before buying a TS).

 

[rickandcindy23]

Just read about this in Timesharing Today. I admit to buying several from John whatever-his-name was, because I don't mind buying timeshares I want for ridiculously low prices, and at least I will pay the MF's. I am a safe bet for any timeshare I buy.

Dave M. called these types of companies out years ago for phony appraisals and the risk of actually using that appraisal for a tax deduction, and yet they continued in business until what???? What happened to make them finally look at the entire operation?

When I think of the crooks we have seen on eBay over the years, I tend to assume not one of these guys is legitimate.

Seeing Timeshare Exit Team on Glenn Beck's show every day of the week is making me sick to my stomach. So much so, I wrote a letter to Glenn Beck and will mail it Tuesday.

How is that company different than all of the others? Viking ship operation, or just a company who takes a lot of money and will be defunct in a few years. They say they negotiate with your timeshare company. Whatever. I am sure if you called them with a DVC contract, they would be happy to take it off your hands, and they will charge a fee in addition to taking it.

The commercial abbreviated:
Your fees go up each year; you don't have good trading power; you cannot get the week you want; and you are stuck with that timeshare forever, with no way out, and of course your kids will inherit it.

I want Glenn Beck and his advertising guy to know:

Q. Who are the evil people making me pay for my timeshare fees for years and why do fees go up?
A. For legacy resorts, it's people like you, on a board YOU can join, who hire and fire the management company, look at the budget, determine what major repairs need done this year, and take pride in the resort we all bought from a developer, now long gone, who sold us all a pile of lies. Things go up. We couldn't keep the fees at $210 per year per week any longer.

Q. Why do I not have good trading power? I cannot get the week I want, when I want?
A. Your week may not be prime season in a prime area, so why should you get Maui in July for your fall Colorado week? Reality.

Q. Why can't you reserve a week you want at your timeshare resort?
A. Have you paid fees on time? Did you call early enough? You cannot blame a resort if you take your time about reserving the week in your float season. Blame yourself for procrastinating and do better next year.

Q. My kids will be stuck with this week? I heard about it on a commercial!
A. Tell your kids they don't have to take anything in the will they don't want because there is no law in your timeshare contract that says that.

I wish I could file a complaint against them, but I haven't paid a dime, so of course I have no reason.

 

[mj2vacation]

Seeing Timeshare Exit Team on Glenn Beck's show every day of the week is making me sick to my stomach. So much so, I wrote a letter to Glenn Beck and will mail it Tuesday

Oh good, so he can free up some more ad space to shill for some other bs... Gold coins, oil wells, canned food.... What's the difference?

 

[Saintsfanfl]

Let's not confuse present property appraisal value or county property assessments with timeshare unit fair market value. There can be a big difference between the two when it comes to a timeshare unit. Here in Florida the county assessor will value the entire property. This assessment obviously completely ignores maintenance fees. Then the tax is spread to the units by management. The maintenance fees could be a million dollars and it wouldn't matter for the assessed value of the entire property. When it comes to the individual unit and what someone would be willing to pay for it then the maintenance fee definitely matters.

Timeshares are an exception. Fair Market Value on an individual timeshare unit has no real connection to the property tax value or real estate appraisal on the property as a whole. FMV is what has to be used for tax deduction purposes but with a timeshare unit you can't get there with a real estate appraisal.

On an unrelated side note, real estate appraisals can be a little inflated or deflated depending on what the person wants who is paying for the appraisal.

 

[sjuhawk_jd]

I wish the justice dept would go after the sale people who sell time share properties to senior citizen at those inflated prices.

Why just senior citizens, why not to all. Especially, when developers "Steal" it through ROFR for pennies on the dollars and then keep on reselling it for tens of thousands.

 

[T-Dot-Traveller]

Immoral perhaps -- but not illegal

Why just senior citizens, why not to all. Especially, when developers "Steal" it through ROFR for pennies on the dollars and then keep on reselling it for tens of thousands.

a moral issue perhaps - but not a legal one

 

[powerhour11]

I see that you are totally against this. I'm a business owner who sells discounted vacations involving a tour. I'm exploring the idea of timeshare "disposal" to enhance my offerings. I agree that having the owners file for deductions they aren't entitled to is bad. However I do think that there is a right way to do this. It's just an idea at this point, but what are your thoughts on Owner A transferring his timeshare to Company B. Since we all know there is no money to be made reselling timeshares due to the thousands of $1 units on eBay and elsewhere, I believe I can make money by renting them. Company B then rents out that unit to Traveler C. Company B then takes the profit from Traveler C and makes a charitable donation to the charity of Owner A's choice in their name. Unless I'm missing something, everybody wins. Owner A gets out of the burden of owning the timeshare as well as gets to take credit for donating to a charity of their choosing, along with whatever deduction that would entitle them to. Company B has a property that's free and clear allowing them to offer more products and services to more customers with virtually no over head aside from the next year’s maintenance that Company B is now responsible for. Traveler C gets to enjoy a week in a nice resort without the commitment of ownership. What am I missing? Please don't crucify me for having an idea, but I'm open to your thoughts.

 

[ronparise]

I see that you are totally against this. I'm a business owner who sells discounted vacations involving a tour. I'm exploring the idea of timeshare "disposal" to enhance my offerings. I agree that having the owners file for deductions they aren't entitled to is bad. However I do think that there is a right way to do this. It's just an idea at this point, but what are your thoughts on Owner A transferring his timeshare to Company B. Since we all know there is no money to be made reselling timeshares due to the thousands of $1 units on eBay and elsewhere, I believe I can make money by renting them. Company B then rents out that unit to Traveler C. Company B then takes the profit from Traveler C and makes a charitable donation to the charity of Owner A's choice in their name. Unless I'm missing something, everybody wins. Owner A gets out of the burden of owning the timeshare as well as gets to take credit for donating to a charity of their choosing, along with whatever deduction that would entitle them to. Company B has a property that's free and clear allowing them to offer more products and services to more customers with virtually no over head aside from the next year’s maintenance that Company B is now responsible for. Traveler C gets to enjoy a week in a nice resort without the commitment of ownership. What am I missing? Please don't crucify me for having an idea, but I'm open to your thoughts.

The issue is the tax deduction. what you are suggesting may pass the IRS smell test, but can tax deductions be assigned. , I, dont know, but it smells fishy to me

If these timeshares have value as rental properties, than they can be sold for real money, and if thats the case, Company B will pay individual A for them, and if A gets paid, he can give that money to a charity himself

The problem that needs to be solved is what to do with the timeshares that have no value. and your idea doesnt address that. Viking ships and fishy tax deductions do, but of course they are illegal

 

[T_R_Oglodyte]

It's just an idea at this point, but what are your thoughts on Owner A transferring his timeshare to Company B. Since we all know there is no money to be made reselling timeshares due to the thousands of $1 units on eBay and elsewhere, I believe I can make money by renting them. Company B then rents out that unit to Traveler C. Company B then takes the profit from Traveler C and makes a charitable donation to the charity of Owner A's choice in their name.

I don't think it's going to fly. First if Owner A no longer owns the timeshare, there is no basis to claim any deduction.

Second, even if you get over that hurdle, there is still no possibility of generating a deduction associated with the charitable use of personal property. The only deduction that is available is the donation of the ownership. That's clearly established by IRS.

Third, I seriously doubt that a charitable donation made by one party can be transferred to another party. If that were possible, there would an active market in which people with excess deductions would be selling them to people who are looking for deductions.

 

[dioxide45]

Another problem with the plan is that most timeshares people need to unload with this method have little rental value. Mostly likely, not enough to cover MFs. So how to do you expect to have any money in the end to donate? You would still have to pay MFs in order to have use of those weeks to rent. There is obviously a reason someone hasn't done this already, and this is probably a big part of it.

 

[DeniseM]

I believe I can make money by renting them.

If the free timeshares had rental value, they would not be free - you will find that most of the free timeshares cannot be rented for enough to cover the maintenance fees.

Then there is the tax fraud issue that others have already address.