Taylor Energy billionaire used oil spill cleanup to avoid taxes for over a decade
If you guessed $1 billion multiplied by zero, you are correct! Ms. Phyllis Taylor has reportedly paid $0 in income tax while pulling in almost half a billion dollars in income between 2004 and 2018. By the way—she most likely didn’t pay any income tax between 2019 and 2021, either.
First off, Phyllis’ husband, Patrick Taylor, died shortly after Hurricane Ivan. While the company was hiding the leak, Phyllis took 95% ownership over the company and used the tax-free inheritance laws to her advantage by over-valuing the company and its assets so that when she sold off the company in 2008 (before even beginning to pretend to start cleaning up the mess her company made), she pulled in a reported $1.2 billion but was able to report “a loss of $211 million.”
You can’t tax a loss. Now, how about that $444 million? Well, when the government made the deal with Taylor Energy to put $666 million in a trust for the cleanup, ProPublica explains:
That was a lot of money — more than half of the proceeds from the company’s sale — but it came with a silver lining. Because Taylor Energy was set up as a sole proprietorship, its income and losses flowed through to Phyllis’ personal taxes. She could write off the costs of the cleanup against her own income.
She’s allowed to legally do this and as you can imagine, using a big pile of money dedicated to cleaning up your dirty deeds to offset your taxes is just what the demon doctor ordered. Since that time, environmental groups, the Coast Guard, and other investigators have shown Taylor Energy’s versions of what is happening 450 feet beneath the surface to be lies. Taylor Energy has continued to sue all parties involved, including the government—asking for the remaining money in the Trust to be released back to Taylor Energy.
At the same time, the Trump administration’s Interior Department worked on getting rid of some of the government oversight put into law after the Deepwater Horizon oil spill. ProPublica estimates that Ms. Phyllis Taylor’s “reserve pool of losses exceeded $330 million,” by the end of 2018 meaning that it is very likely she will never have to pay income taxes ever again.