- I acted from conviction:’ PwC whistleblower speaks out
- Whistleblowers should be protected, not prosecuted
Wall Street Journal, How Google, GE and U.S. Firms Play the Tax ‘Audit Lottery’:
Buried
deep in American companies’ securities filings is an indicator for how
aggressively they are working to shield their income from the IRS and
other tax authorities.
The obscure entry—under the heading “uncertain tax positions” or
“unrecognized tax benefits”—is where companies account for tax breaks
that push the envelope. And they are adding up.
Exxon
Mobil reported that it had $7.8 billion of these uncertain tax
positions outstanding as of Dec. 31, including $1.5 billion from 2013
alone. Pfizer reported $6.1 billion, including $1.2 billion from 2013.
Google reported $3.1 billion at the end of September, up from $2.6
billion at the end of 2013.
All told, companies in the S&P 500 had amassed $188 billion in
unrecognized tax benefits by the end of their 2013 fiscal years—$21
billion of which was related to that year’s taxes, according a Wall
Street Journal analysis of figures from Calcbench Inc., a financial data
provider. The companies have added between $19 billion and $22 billion
of new uncertain tax positions each year since 2010.
Accounting rules define these tax benefits as ones that tax authorities have
strong grounds to reject, by the companies’ own analysis. Seeking those
breaks is perfectly legal, and since companies have already lowered
their profit numbers as if the taxes had been paid, there’s little risk
in rolling the dice. A win down the road will boost profits, while a
loss typically does no additional damage. Either way, companies often
get to use the disputed cash in the meantime. ...
Offshore Tax Crimes Scorecard: Bankers, Lawyers, Advisers
German state buys tax CD containing Swiss bank client data
Bank Leumi Admits to Assisting U.S. Taxpayers in Hiding Assets in Offshore Bank Accounts
Swedish TV documentary on Luxembourg tax leaks and PFI business
The Vatican Bank, Christmas Cheer, and FATCA (Tax Analysts Blog). “The pontiff is cool with tax transparency.”
Michael Hatfield (University of Washington), Taxation and Surveillance: An Agenda:
Among government agencies, the IRS likely has the surest legal claim to the
most information about the most Americans: your hobbies; your religious
affiliation; your reading; your travel; and your medical information are
all potentially tax relevant. Privacy scholars have studied the arrival
of Big Data, the internet-of-things, and the surveillance joint venture
of government and private companies, but neither privacy nor tax
scholars have considered how these technological advances could improve
tax administration. As government agencies and private companies
increasingly pursue what has been described as the “growing gush of
data,” the use of these technologies in tax administration will become
increasingly important to consider. This Essay provides an agenda of
items for discussion, debate, and research related to the development,
implementation, and effects of moving towards a surveillance-facilitated
tax system.
Tracy A. Kaye (Seton Hall), Innovations in the War on Tax Evasion, 2014 BYU L. Rev. 363:
Offshore
tax evasion is a global problem that requires a global solution.
Nevertheless, the United States unilaterally responded to the offshore
tax evasion problem by enacting the Foreign Account Tax Compliance Act.
FATCA requires foreign banks to report information about financial
accounts held by U.S. taxpayers directly to the Internal Revenue Service
and imposes a thirty percent withholding tax on certain U.S. payments
to any bank that will not cooperate. Yet, U.S. banks were not required
to report any information on nonresident account holders (except for
Canadians) to anyone. FATCA garnered worldwide attention. The European
Union expressed its concerns to the U.S. Treasury about the compliance
burden on the financial industry and the conflict with EU Member States’
laws on privacy and data protection. Treasury is resolving these issues
by negotiating bilateral agreements known as Intergovernmental
Agreements (IGAs) that will require reciprocity on the part of the
United States in the exchange of information. These IGAs are furthering
the movement toward global transparency as most FATCA partner
jurisdictions intend to require reporting on all nonresident accounts
rather than just U.S. accounts. This could lead to the development of a
multilateral platform for the exchange of information that is critical
to combating offshore tax evasion. This Article urges the United States
to adopt the regulations and legislation that are necessary before the
United States can provide its FATCA partners with the same information
that they have been asked to give the U.S. government. The United States
should play a leadership role in furthering global transparency and
take the steps required to no longer function as a tax haven for tax
evaders from other countries. The IGA with Mexico that entered into
force on January 1, 2013, is an appropriate vehicle for the United
States to demonstrate this renewed commitment to the exchange of
information.
Bloomberg: The Greatest Tax Story Ever Told, by Zachary R. Mider:
Bloomberg: The Greatest Tax Story Ever Told, by Zachary R. Mider:
The
only operetta ever written about Subpart F of the Internal Revenue Code
made its debut on a rainy Sunday evening in May 1990, in a Fifth Avenue
apartment overlooking Central Park. In bow ties and spring blazers,
partners of the law firm of Davis Polk & Wardwell dined on lobster
prepared by a Milanese chef. Then everyone gathered around a piano, and a
pair of professional opera singers, joined by the few Davis Polk men
who could carry a tune, performed what sounded like a collaboration of
Gilbert & Sullivan and Ernst & Young.
The 13-minute operetta, Charlie’s Lament,
told how the party’s host, John Carroll Jr., invented a whole category
of corporate tax avoidance and successfully defended it in a fight with
the Internal Revenue Service. The lawyers sang:
The Feds may be screaming,
But we all are beaming
’Cause we’ll never pay taxes,
We’ll never pay taxes,
Never pay taxes again!
But we all are beaming
’Cause we’ll never pay taxes,
We’ll never pay taxes,
Never pay taxes again!
The
first corporate “inversion,” as Carroll’s maneuver came to be known,
was obscure then and is all but forgotten now. Yet at least 45 companies
have followed the lead of Carroll’s client, New Orleans-based
construction company McDermott International, and shifted their legal
addresses to low-tax foreign nations. Total corporate savings so far: at
least $9.8 billion—money that otherwise would have gone to the U.S.
government.