Scofflaws

The McCourts, who own the Los Angeles Dodgers (so she says; he says he's the owner and she's not), jointly pocketed income totaling $108 million from 2004 through 2009, according to documents Jamie McCourt recently filed in the couple's divorce case in Los Angeles County Superior Court.

On that sum, they paid zero federal and state income tax. Jamie suggests that some tax breaks will apply this year too.

This reminds me of the old line about how true scandal lies not in what's illegal, but what's legal. It's certainly an edifying window into the lengths some people will go to avoid paying taxes.

The court papers indicate that the McCourts deliberately structured their business at least partially to allow them to live tax-free.

Frank McCourt's lawyer, Marc Seltzer, didn't directly dispute Jamie's characterizations of the couple's tax planning or the details of their finances. He did, however, call her document filings "selective" and complained by e-mail that she made public "information which most people would respect as private."

According to Jamie, the McCourts employed two mechanisms to live tax-free. One was to claim enormous tax losses from their business, which was mostly commercial real estate before they bought the Dodgers. These could be carried forward, offsetting income year after year until they were finally netted out. Jamie's documents say that in 2008 the net loss carry-forward from previous years was $109 million -- in other words, the McCourts could have earned that much without paying a penny of income tax.

A year later, the loss carry-forward had increased to $135 million, which makes it sound as if 2008 was one horrible year. Yet according to another document Jamie filed in court, one of Frank's partnerships paid him $23 million that year.

Did the McCourts really lose $135 million in the years before 2009? Probably not in the sense that you or I suffer a loss when a dollar bill slips through a hole in our jeans, or even when we sell that stock our brother-in-law described as "a slam dunk" for less than we paid for it.

"They're tax losses. I don't mean real losses," Jamie's lawyer, Bert Fields, told me.