“What do you mean?”
“Taxes, LuAnn. We do have the issue of taxes.”
“But I thought all that money was mine to keep. The government couldn’t touch it. That’s what all the ads say.”
“That’s not exactly true. In fact the advertising is very misleading. Funny how the government can do that. The principal is not tax-free, it’s tax-deferred. But only for the first year.”
“What the hell does that mean?”
“It means that for the first year the winner pays no federal or state taxes, but the amount of that tax is simply deferred until the next year. The underlying tax is still owed, it’s just the timing that’s affected. No penalties or interest will accrue of course, so long as payment is made on a timely basis during the next tax year. The law states that the tax must be paid over ten years in equal installments. On one hundred million dollars, for example, you will owe roughly fifty million dollars in state and federal income tax, or one half the total amount. You’re obviously in the highest tax bracket now. Divided by ten years the tax payment comes to five million dollars per year. In addition to that, generally speaking, any money you earn from the principal amount is taxable without any type of tax-deferred status.
“And I must tell you, LuAnn. I have plans for that principal, rather grand plans. You will make a great deal more money in the coming years; however, it will almost all be taxable income, dividends, capital gains, interest from taxable bonds, that sort of thing. That ordinarily would not present a problem, since law-abiding citizens who are not on the run from the police under an assumed name can file their tax returns, pay their fair share of tax, and live quite nicely. You can no longer do that. If my people filed your tax return under the name LuAnn Tyler with your current address and other personal information, don’t you think the police might come knocking on your door?”
“Well, can’t I pay tax under my new name?”
“Ah, potentially a brilliant solution; however, the IRS tends to get quite curious when the very first tax return filed by someone barely out of her teens has so many zeros on it. They might wonder what you were doing before and why all of a sudden you’re richer than a Rockefeller. Again, the result would probably be the police, or even more likely the FBI, knocking on your door. No, that won’t really do.”
“So what do we do?”
When Jackson next spoke, the tone that reached LuAnn’s ears made her tighten her grip on Lisa.
“You will do exactly as I tell you, LuAnn. You are ticketed on a flight that will take you out of the country. You will never return to the United States. This little mess in Georgia has bestowed upon you a life on the move. Forever, I’m afraid.”
“But—”
“There’s no but to it, LuAnn, that is the way it will be. Do you understand?”
LuAnn sat back against the leather seat and said stubbornly, “I got enough money now to where I can handle myself okay. And I don’t like people telling me what to do.”
“Is that right?” Jackson’s hand closed around the pistol he had lifted from his briefcase. In the darkness he could have swung it up in an instant: mother and child obliterated. “Well, then why don’t you take your chances on getting out of the country by yourself. Would you like to do that?”
“I can take care of myself.”
“That’s not the point. You made a deal with me, LuAnn. A deal I expect you to honor. Unless you’re a fool you will work with me and not against me. You will see that in the long run your and my interests are the same. Otherwise, I can stop the limo right here, toss you and the child out, and I’ll phone the police to come and pick you up. It’s your choice. Decide. Now!”
Confronted with that option, LuAnn looked desperately around the interior of the limo. Her eyes finally settled on Lisa. Her daughter looked up at her with big, soft eyes; there was complete faith there. LuAnn let out a deep breath. What choice did she really have?
“All right.”
Jackson again rustled the papers he held. “Now, we have just enough time to go over these documents. There are a number of them for you to sign, but let me discuss the principal terms first. I will try to be as simple in my explanation as possible.
“You have just won one hundred million dollars and change. As we speak, that money has been placed into a special escrow account set up by the Lottery Commission under your name. By the way, I have obtained a Social Security number for you, under your new name. It makes life so much easier when you have one of those. Once you execute these papers my people will be able to transfer the funds out of that account and into one over which I will have complete and total control.”
“But how do I get to the money?” LuAnn protested.
“Patience, LuAnn, all will be explained. The money will be invested as I see fit and for my own account. However, from those investment funds you will be guaranteed a minimum return of twenty-five percent per annum, which comes to approximately twenty-five million dollars per year. Those funds will be available to you all during the course of the year. I have accountants and financial advisors who will handle all of that for you, don’t worry.” He held up a cautionary finger. “Understand that that is income from principal. The one hundred million is never touched. I will control that principal amount for a period of ten years and invest it however I choose. It will take several months or more to fully implement my plans for the money, so the ten-year period will commence approximately in the late fall of this year. I will provide you with the exact date later. Ten years from that date, you will receive the full one hundred million dollars back. Any of the yearly income you’ve earned over the ten years is of course yours to keep. We will invest that for you as well, free of charge. I’m sure you’re ignorant of this, but at that rate, your money, compounded, less even an exorbitant personal allowance, will double approximately every three years, particularly when you don’t pay any taxes. Under practically any reasonable projection, you will be worth hundreds of millions of dollars at the end of the ten-year period, risk-free.” Jackson’s eyes sparkled as he rattled off the figures. “It’s positively intoxicating, isn’t it, LuAnn? It just beats the hell out of a hundred dollars a day, doesn’t it? You’ve come a long way in less than a week, you truly have.” He laughed heartily. “To start you off, I will advance you the sum of five million dollars, interest-free. That should be sufficient to keep you until the investment earnings come rolling in.”
LuAnn swallowed hard at the mention of the gigantic sums. “I don’t know nothing about investing, but how can you guarantee me so much money each year?”
Jackson looked disappointed. “The same way I could guarantee that you would win the lottery. If I can perform that magic, I think I can handle Wall Street.”
“What if something should happen to me?”
“The contract you will be signing binds your heirs and assigns.” He nodded at Lisa. “Your daughter. However, that income would go to her and at the end of the ten-year period so would the principal amount. There’s also a power of attorney form. I took the liberty of already having filled in the notary panel. I’m a man of many talents.” He chuckled lightly. From out of the darkness, Jackson extended the packet of documents and a pen to her. “They’re clearly marked where your signature is required. I trust that you are satisfied with the terms. I told you from the start that they would be generous, didn’t I?”
LuAnn hesitated for an instant.