Bergen Bar Tax Bulletin: Vol. 37, No. 12

By: Theodore M. Davis, Chair, Tax Law Committee

Current Items:

1) The Maltese Pension Falcon
2) Santa’s Wishes

1) It’s almost Christmas and you’re still stuck at home with this new virus threat. What to do, oh, what to do! Now, who doesn’t love Humphrey Bogart, Sidney Greenstreet, Peter Lorre, and Mary Astor? If you’re guessing Casablanca you would be close. In the fall of 1941 director, John Houston put together a dazzling cast to create what is perhaps the first noir classic detective story where Bogie plays Sam Spade. By now you of celluloid addictions may be able to guess “The Maltese Falcon.” In this detective thriller, Sam Spade gets more than he bargained for when a case is brought to him by beautiful and secretive Mary Astor playing Miss Wonderly. Sam’s partner is soon murdered and Peter Lorre shows up demanding he locates a valuable statuette. In 1539, the Knight Templars of Malta paid tribute to Charles V of Spain by sending him a golden falcon encrusted from beak to claw with the rarest jewels. But Pirates seized the galley carrying this priceless token and the fate of the Maltese falcon remained a mystery. Of course, none of this is true but it is a great backdrop for the film. Now I will bet you have no idea where Malta is. It is actually an island country located in the central Mediterranean Sea. It played a strategic role in World War II and these days a wonderful vacation spot. I won’t spoil the mystery by telling you how the movie comes out. But by this time you must be asking yourself what does this have to do with the tax law. So here it comes: this December, United States and Malta signed a competent authority arrangement (CAA) confirming their understanding of the meaning of “pension fund” for purposes of US and Malta income tax treaties. According to an IRS announcement, this agreement was entered into after IRS discovered that US taxpayers with no connection to Malta were misconstruing the pension provisions of the treaty to avoid income tax on the earnings of and distributions from personal retirement schemes established in Malta. The agreement provides a fund, scheme, or arrangement that is not operated principally to provide pension or retirement benefits if it allows participants to contribute property other than cash and does not limit contributions by reference to income from employment and self-employment activity. It seems these retirement pension plans were a lot like the bejeweled Maltese falcon just a figment of someone’s imagination. Bogie would have loved the task of tracking down these mystery pension plans. Do see the Maltese falcon if you can. Much better than this bulletin.

2) I make no claim to this version of The Night Before Christmas ….

A Covid Christmas
Twas the night before Christmas, but Covid was here,
So we all had to stay extra cautious this year.
Our masks were all hung by the chimney with care
In case Santa forgot his and needed a spare.
With Covid, we couldn’t leave cookies or cake
So we left Santa hand sanitizer to take.
The children were sleeping, the brave little tots
The ones over 5 had just had their first shots,
And mom in her kerchief and me in my cap
Had just settled in for a long winter’s nap.
But we tossed and we turned all night in our beds
As visions of variants danced in our heads.
Gamma and Delta and now Omicron
These Covid mutations that go on and on
I thought to myself, “If this doesn’t get better,
I’ll soon be familiar with every Greek letter”.
Then just as I started to drift off and doze
A clatter of noise from the front lawn arose.
I leapt from my bed and ran straight down the stair
I opened the door, and an old gent stood there.

His N 95 made him look pretty weird
But I knew who he was by his red suit and beard.
I kept six feet away but blurted out quick
” What are you doing here, jolly Saint Nick?”
Then I said, “Where’s your presents, your reindeer and sleigh?
Don’t you know that tomorrow will be Christmas Day? “.
And Santa stood there looking sad in the snow
As he started to tell me a long tale of woe.
He said he’d been stuck at the North Pole alone
All his white collar elves had been working from home,
And most of the others said “Santa, don’t hire us!
We can live off the CERB now, thanks to the virus”.
Those left in the toyshop had little to do.
With supply chain disruptions, they could make nothing new.
And as for the reindeer, they’d all gone away.
None of them left to pull on his sleigh.
He said Dasher and Dancer were in quarantine,
Prancer and Vixen refused the vaccine,
Comet and Cupid were in ICU,
So were Donner and Blitzen, they may not pull through.
And Rudolph’s career can’t be resurrected.
With his shiny red nose, they all think he’s infected.
Even with his old sleigh, Santa couldn’t go far.
Every border to cross needs a new PCR.

Santa sighed as he told me how nice it would be
If children could once again sit on his knee.
He couldn’t care less if they’re naughty or nice
But they’d have to show proof that they’d had their shot twice.
But then the old twinkle returned to his eyes.
And he said that he’d brought me a Christmas surprise.
When I unwrapped the box and opened it wide,
Starlight and rainbows streamed out from inside.
Some letters whirled round and flew up to the sky
And they spelled out a word that was 40 feet high.
There first was an H, then an O, then a P,
Then I saw it spelled HOPE when it added the E.
“Christmas magic,” said Santa as he smiled through his beard.
Then suddenly all of the reindeer appeared.
He jumped into his sleigh and he waved me good-bye,
Then he soared o’er the rooftops and into the sky.
I heard him exclaim as he drove out of sight
“Get your vaccines my friends, Merry Christmas, good-night”.
Then I went back to bed and a sweet Christmas dream
Of a world when we’d finished with Covid 19.

Merry Everything and a Better New Year……Ted

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