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The First Marblehead Corporation Message Board

  • jenniferremington1990 jenniferremington1990 Aug 15, 2013 11:10 PM Flag

    Will cooler heads prevail?

    Clearly the IRS audit was front and center on this call. It has been a known issue for 4 years now (look at disclaimers on all press releases / financial statements since 2010) but bringing it up on this press release stirred up the bees nest.

    If you look at the case it's pretty clear: they paid taxes on expected income from trusts that they never received after hey sold the trusts. Common sense says they are owed the money back but people are always worried that the IRS doesn't operate with common sense.

    So if the IRS comes after them it will go through a lengthy appeals process that will drag out 3+ years at least. Just look at the mass tax issue.

    Earnings were weak but there were a lot of one time issues that came into play:
    *paid higher taxes of $1.6 million qtr on qtr
    *paid $1 million in severance
    *the student loan interest issue delayed the beginning of the peak lending season per CEO so that means this just gets deferred to the next qtr.

    The bigger pluses:
    Up to 1100 approved schools
    Added auburn (22k students)
    Sounds like lending partners are coming imminently.

    Will cooler heads prevail?

    Ill be looking to buy back tomorrow

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