[16-Jan-2020] DarksydePhil is filing for bankruptcy (general thread) - and has officially done so on January 31 2020, meaning a lot of his finances have become public

[JamFlowMan]

I hope he was being sarcastic because that would rank among the dumbest things he has ever said otherwise.

It was either and ATK or just stream question about how write offs work for your taxes and one example he gave was using the bathroom during stream.

 

[Salubrious]

What's so ridiculous about this is blowing that much on a mobile game. If it turned out he blew $40k going to Antarctica three times, I'd at least be able to nod and think, "Unwise, but understandable."

Maybe that's just my prejudices, though.

That's the most amazing part about all this.

Like M.C. Hammer. He went bankrupt, but at least we know what he spent his money on.

DSP, no joke, has made around 2 million dollars in the last decade. What did he do with any of it? He's paid like $50k total in principle on both condos. His Toyota is damn near still at the price he paid for it after 3 years. He went on like 2 trips to Seattle and nowhere else.

DSP has nothing to show for his eleven year legacy of luck boxing.

 

[BScCollateral]

I'm actually not sure, maybe he doesn't need this year's yet. One would hope that would be one of the few things he actually is owed by his so-called lawyer.

I'd be very surprised if he were required to provide his tax return for 2019. Going to the link:

"...for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed..."

I would read that to mean Phil has to show his tax return for 2019 only if he has filed for 2019 already. I don't think he's obliged to file for 2019 until April.

EDIT: Shouldn't that just be "your most recently filed tax return?" Clumsy writing.

 

[SaidNoOneEver]

He said at least once because he takes a shit break every stream he gets to write off the water used for the bathroom. Not even saying he's wrong but just one of those examples where Phil blurs the line between reality and parody.

I think its a fair assumption that every single item in that house and every bill is being written off as a business expense. He wouldn't be the first home-streamer to try that. I don't see any other way to get close to that $5k/mo number without it.

It was either and ATK or just stream question about how write offs work for your taxes and one example he gave was using the bathroom during stream.

Yep, many naive people believe that anything they use can be fully written off. That house tour video, for example: all the art he showed off on the walls? Now business expenses/write-offs. The cooking videos/streams? Everything in the kitchen, business expenses/write-offs (probably what gave him the idea to make the videos in the first place). The videos documenting his move to WA? All expenses can now be written off and claimed as business expenses. The list goes on and on. On DSP's planet everything that has ever appeared in one of his videos is a business expense. Hell I wouldn't be surprised if the pics of his restaurant meals on Twitter are being written off since his public persona is his "business".

It'll be a travesty if they let him get away with it all.

 

[SkippyLongbottom]

Hell I wouldn't be surprised if the pics of his restaurant meals on Twitter are being written off since his public persona is his "business".

Would make sense why his instagram is full of just: Food, TV, game shit, shit he sees when he's out.

 

[Prince Lotor]

I think its a fair assumption that every single item in that house and every bill is being written off as a business expense. He wouldn't be the first home-streamer to try that. I don't see any other way to get close to that $5k/mo number without it.



Yep, many naive people believe that anything they use can be fully written off. That house tour video, for example: all the art he showed off on the walls? Now business expenses/write-offs. The cooking videos/streams? Everything in the kitchen, business expenses/write-offs (probably what gave him the idea to make the videos in the first place). The videos documenting his move to WA? All expenses can now be written off and claimed as business expenses. The list goes on and on. On DSP's planet everything that has ever appeared in one of his videos is a business expense. Hell I wouldn't be surprised if the pics of his restaurant meals on Twitter are being written off since his public persona is his "business".

It'll be a travesty if they let him get away with it all.

Phil wrote his Wrestlemania 29 tickets off as a business expense because "I'm Vlogging it." He's very likely written-off most of the things he has vlogged. His and Leanna's plane ticket's to go house hunting? Filmed it and put it on YouTube, tax write-off, totally a business expense dood.

Can someone who understands this better explain this? Phil says "a 'Pass Through Business Entity' allows you to claim business expenses without having a business, and that's what i've been doing Federally, but these dumbfuck kids wouldn't know that because they're idiots." This was during the 'It's NAHT a business' phase. . .then why did you have to register a business Phil?

This doesn't seem to be what a 'Pass Through Business Entity' means at all from what I looked at. It seems it's a term for a certain set of business structures, for example a Sole Proprietor is one type.

Pass-Through Entity Definition & Example

A pass-through entity is a special business structure that is used to reduce the effects of double taxation.

investinganswers.com

What are pass-through businesses?

Most US businesses are taxed as pass-through (or flow-through) entities that, unlike C corporations, are not subject to the corporate income tax or any other...

www.taxpolicycenter.org

Edit so no double post: Phil got free internet from this hotel, he paid for an internet upgrade package and claimed it as a business expense on his Federal taxes

Phil claimed $600 Wrestlemania tickets as a business expense on his Federal taxes because he vlogged it

Phil decided to pay for a more expensive hotel room because 'Oh hell, it's a business expense anyways.' Keep in mind this was over 2 years before he finished finally paying off his first bout of credit card debt.

 

[SaidNoOneEver]

Phil wrote his Wrestlemania 29 tickets off as a business expense because "I'm Vlogging it." He's very likely written-off most of the things he has vlogged. His and Leanna's plane ticket's to go house hunting? Filmed it and put it on YouTube, tax write-off, totally a business expense dood.

It's not just tax write-offs, he's claiming it all in his bankruptcy filing as business purchases to protect it from the creditors. He's clearly abusing the system to claim his personal property belongs to his "business" so it won't be sold to pay his creditors and by doing so inflating his business expenses so his personal income falls below the threshold for Ch. 7.

 

[James Smith]

I'm actually not sure, maybe he doesn't need this year's yet. One would hope that would be one of the few things he actually is owed by his so-called lawyer.

(A)The debtor shall provide—
(i)
not later than 7 days before the date first set for the first meeting of creditors, to the trustee a copy of the Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such return) for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed; and

If he has actually filed his 2019 taxes he has to provide a copy of 2019's return. If not he has to provide a copy of 2018's return assuming it got filed and so on if it hasn't.

Remember how in early 2019 he told us he owed $17K in taxes for 2018's income? That requires a minimum of $75,000 taxable income.

He now gets to explain how with the exact same averaged out monthly gross income his business has half the net income.

Should have waited a few more weeks to file for bankruptcy to avoid that (to push the creditor meeting until after 2019's return was filed), sucker. A real attorney would have told you that.

 

[actually]

Remember how in early 2019 he told us he owed $17K in taxes for 2018's income? That requires a minimum of $75,000 taxable income.

So, he listed that still owes $15,000 in federal taxes from 2018's tax year. Taken that as an exact number and using his $500/month tax payment plan that was listed, and assuming he started paying in May, that's at least 8 months of $500 payments, or $4000. That means his taxes were actually at least $19,000. If he actually put his mom's $4000 towards the taxes, that puts it at $23,000. What would that minimum income look like?

 

[James Smith]

That means his taxes were actually at least $19,000. If he actually put his mom's $4000 towards the taxes, that puts it at $23,000. What would that minimum income look like?

TL;DR He either told the IRS (and therefore will be telling the bankruptcy court)

• had the income we think he did and is spending about $1500 per month on his business, or
• he had a lot higher income than we think he did, made a large partial tax payment toward 2018's taxes on his own, and is actually spending $5K per month on his business

I think it's more likely to be the first option.

Here is a breakdown of the required net business income to reach a business income of about $19,000 and of about $23,000.

Current Gross Business Income Estimate	$117,576	$117,576
QBI and FICA Deduction for Following Net	$18,762.75	$22,225.74
Required Other Business Expenses for Following Net	$16,313.25	-$649.74
Net Business Income	$82,500	$96,000
Income Tax	$7,321.70	$9,529.83
FICA (Both Shares)	$11,656.88	$13,564.37
Total Tax	$18,978.57	$23,094.20

I included the amount of business expenses that would be required for each of these two scenarios to be functional. As you can see the high end of net business income doesn't make sense because he has negative business expenses. The low end of net business income makes more sense with a measly $1,359.44 of other business expenses per month.

2018's business income estimate is probably missing about $2,000 of tips. Here are the two charts with that income included:

Current Gross Business Income Estimate	$119,576	$119,576
QBI and FICA Deduction for Following Net	$18,762.75	$22,225.74
Required Other Business Expenses for Following Net	$18,313.25	$1,350.26
Net Business Income	$82,500	$96,000
Income Tax	$7,321.70	$9,529.83
FICA (Both Shares)	$11,656.88	$13,564.37
Total Tax	$18,978.57	$23,094.20

Now the high end of net business income has expenses of $112.52 per month and the low end of net business income has expenses of $1526.10 per month.

 

[Schrödinger's Kat]

I would read that to mean Phil has to show his tax return for 2019 only if he has filed for 2019 already. I don't think he's obliged to file for 2019 until April.

I agree with you, but Phil sure seems to be in a hurry to get his 2019 taxes filed before the 341 hearing. He could put this off until April 15 if it wasn't necessary. Someone told him to get his taxes done before his meeting, otherwise he'd being waiting til the last minute as he does with everything.

He now gets to explain how with the exact same averaged out monthly gross income his business has half the net income.

This could be it. His 2018 tax return is going to show he makes a shitload of money, and totally doesn't qualify for Chapter 7. But, maybe he's decided to write off all that gacha spending in 2019, showing a substantial reduction in income and just enough to qualify.

That is why he's rushing to get that tax return done. He knows based on 2018 return, he'll be forced into Chapter 13. He needs to show he made no money in 2019, and his tax return is the first thing they'll look at. Its one of the reasons why I've been so optimistic that he's not getting Chapter 7, he can't hide his tax returns.

Is he smart enough to pull off this scam? This is pretty elaborate for him. Yeah, he's a scammer of wheelchairs, but this is like full blown conspiracy to commit tax evasion and bankruptcy fraud, not something you'd expect from an idiot like Phil. I believe he's dumb enough to deliberately fuck up his filing numbers and hope it gets rubber-stamped through, but to blatantly falsify your tax return at the same time is seriously risky, especially when you've got an army of autists that want to take you down.

This kinda shit haunts you sometimes years down the road, and then you end up owing tens, if not hundreds of thousands to the IRS not to mention possibly jail time once it surfaces. The IRS has algorithms to look for this kind of behavior. Shit, just having out of the ordinary bank transactions can be enough to trigger an audit.

 

[Dizzyuntildeath]

I hope they grill him over his expenses and write offs, he seems the type to throw his receipts in the trash. It will be entertaining to see him stumble through as his brain scrambles to come up with several on the spot lies that will equate to "look just trust me, I spent that money, it happened". If bankruptcy trustees are as inquisitive as the tax man, this is going to be a very unpleasant experience for Phil. His entire house of cards collapses when two conditions are met: they access his PayPal history (unless he's set up a dummy account recently in anticipation of this, and even that would raise questions), they ask for proof of his business expenses. My family runs a store with roughly a million in inventory, and even on bad years, can never even come close to $5000/month in operating expenses, let alone a one time spike of $9000. It has me truly curious as to what he thinks his operating expenses are, how he figured what he considers is an expense, and what idiot goes over his books and says "looks good to me!"
There are two possibilities here for the last one: his accountant is an asshole that knows he is scamming the system and pocketing that sweet, sweet $1250 and sending off his return without telling Phil, "uh, hey buddy, a few of these things don't add up, if they look twice at this, they'll want proof"
Or, his accountant has serious brain damage.
There is no way his expenses could possibly total $60,000 a year as that small of a business, with that low of an overhead. Anyone with experience handling business accounts will be coming at Phil with some seriously difficult questions to answer, and since I doubt he's left a paper trail, it's going to go very poorly.
And then if the taxman catches the scent of blood in the water...
Phil better be the best liar on the planet, or the luckiest fuck on the planet.

 

[MarilynMonster]

This is a very interesting video What Does Your Chapter 7 Trustee Really Think About Your Case https://www.youtube.com/watch?v=SHsaVy_i9AM and sadly I'm pretty sure his trustee meeting will be very boring, it's literally just to confirm his identity and that the info in the filing is correct and they usually last 5 minutes. According to that video though cases like dave's are how trustees make their money, they are on the look out for cases like dave's. Who knows, even if they realize he's lying about his expenses and such they may allow his bankruptcy to go through so they can sell his house and make some money.

 

[Schrödinger's Kat]

His entire house of cards collapses when two conditions are met: they access his PayPal history (unless he's set up a dummy account recently in anticipation of this, and even that would raise questions), they ask for proof of his business expenses.

He'll be expected to cough up bank statements, at least 2 month's worth, at a minimum, in addition to his tax returns. Since he only has PayPal account and a BofA checking account, the trustee will definitely want to see both. He was probably hoping he could hide the PayPal account which would have avoided him a lot of trouble.

There are two possibilities here for the last one: his accountant is an asshole that knows he is scamming the system and pocketing that sweet, sweet $1250 and sending off his return without telling Phil, "uh, hey buddy, a few of these things don't add up, if they look twice at this, they'll want proof"
Or, his accountant has serious brain damage.

Maybe Phil is not writing those expenses off his taxes at all, and his bankruptcy filing is just all bullshit. Phil is probably stupid enough to do this and think no one would notice.

Attorneys and accountants are good and figuring out when someone is lying, and it would seem unlikely they'd risk their careers for an idiot like Phil. $1250 is nothing to an attorney, that's like a day's work.

Its more likely Phil is just ignoring their advice or he isn't giving them truthful information to work with.

Since Phil hasn't filed 2019 taxes yet, his bankruptcy attorney doesn't have a clear, accurate picture of his 2019 income, so that is probably why she's asking for him to get it done before his hearing. She's probably expecting to see that he only earned $50,000 in 2019 which would corroborate his bankruptcy filing. And his tax attorney is aware of the kind of normal expenses Phil has, so if it suddenly increases by 300%, he may balk at it and ask him for specifics and receipts. His tax attorney will potentially be on the hook to explain the situation if Phil gets audited.

 

[Freshtodeath]

I don't think he can write off the gacha as business expenses. For example, professional poker players aren't allowed to write off their buy ins to tournaments and stuff like that. Otherwise they'd be able to basically gamble for free. He would have to argue that he is streaming WWE maybe but he isn't. Here is an article from 2020 about gambling and taxes

 

[harbinger]

So, he listed that still owes $15,000 in federal taxes from 2018's tax year. Taken that as an exact number and using his $500/month tax payment plan that was listed, and assuming he started paying in May, that's at least 8 months of $500 payments, or $4000. That means his taxes were actually at least $19,000. If he actually put his mom's $4000 towards the taxes, that puts it at $23,000. What would that minimum income look like?

It should be pointed out that he’s most likely paying penalties and interest on his 2018 taxes since he’s failed to pay on time. I don’t know if it would be enough to skew the numbers that much though. We also have no proof the $4000 tip from his mother went towards taxes. He admitted that the $17k from Emerald 7 didn’t go towards his taxes. It’s just as possible the $4k was invested in that shiny Hulk Hogan.

 

[millais]

I wonder what his relationship with his parents is like as all the bankruptcy proceedings pick up speed. Is he being ahnest with them about the true nature of his financials, or are they also getting the misleading version he's feeding to Rochelle.

 

[Wing Zero]

I wonder what his relationship with his parents is like as all the bankruptcy proceedings pick up speed. Is he being ahnest with them about the true nature of his financials, or are they also getting the misleading version he's feeding to Rochelle.

I doubt he's even mentioned it to them. Phil still seems convinced that this bankruptcy is gonna solve everything so i'm sure the last thing he wants to hear is his parents rightfully yelling at him for being a stupid dumbass if he can just wipe away the debt with no consequences and pretend nothing bad happened.

 

[DiabeticSP]

Well, supposedly Phil's parents told him to just stop paying his mortgage. So clearly he hasn't mentioned any of this to them at all.

I'm more curious what he's told Kat.

Bitch ain't getting her cruise or whatever the fuck it was he promised her.

 

[Kaede Did Nothing Wrong]

This is a very interesting video What Does Your Chapter 7 Trustee Really Think About Your Case https://www.youtube.com/watch?v=SHsaVy_i9AM and sadly I'm pretty sure his trustee meeting will be very boring, it's literally just to confirm his identity and that the info in the filing is correct and they usually last 5 minutes. According to that video though cases like dave's are how trustees make their money, they are on the look out for cases like dave's. Who knows, even if they realize he's lying about his expenses and such they may allow his bankruptcy to go through so they can sell his house and make some money.

lol in that video at 10:27 is like talking directly to phil. "so before you file, that's the time to identify potential problems. and if you talk to an attorney and they say 'ah don't worry about it, not gonna be a problem.' don't believe that. you want to be very very careful. again if you have any kind of assets- and I always tell my clients, you know, whatever your property value is- what you think it is- you want to have from 3 or 4 different sources... because what I find is the trustees are going to look for an agent who is going to come in on the high side of what the value of the property is..."