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Accounting News Roundup: Grilling Apple; IRS, Round 2; Bush Tax Cut Fail | 05.21.13

Apple Avoided Taxes on Overseas Billions, Senate Panel Finds [WSJ]
Apple Inc. paid no corporate income tax to any national government on tens of billions of dollars in overseas income over the past four years, Senate investigators found, a revelation that fuels the debate over whether the U.S. tax code needs an overhaul. The disclosure follows a lengthy examination of the technology giant's tax practices by the U.S. Senate's Permanent Subcommittee on Investigations, which is expected to air its findings at a hearing on Tuesday. Apple Chief Executive Tim Cook is preparing to testify at the hearing, and is expected to propose changes to a tax code that provides American companies strong incentives to keep overseas earnings bottled up at foreign subsidiaries. Apple used technicalities in Irish and American tax law to pay little or no corporate taxes on at least $74 billion over the past four years, according to the Senate panel's findings. The investigation found no evidence that Apple did anything illegal. Aides to the subcommittee said they have never seen a company use a subsidiary that didn't owe corporate income taxes to any country.

Apple's Tax-Dodging Techniques Do Indeed Sound Quite Spectacular [BI]
E.G.: "A
pple Operations International, has no employees and no physical presence, but keeps its bank accounts and records in the United States and holds its board meetings in California. It was incorporated in Ireland in 1980, and is owned and controlled by the U.S. parent company, Apple Inc.  Ireland asserts tax jurisdiction only over companies that are managed and controlled in Ireland, but the United States bases tax residency on where a company is incorporated. Exploiting the gap between the two nations’ tax laws, Apple Operations International has not filed an income tax return in either country, or any other country, for the past five years.  From 2009 to 2012, it reported income totaling $30 billion." 
Apple Willing To Pay More Taxes To Get An Efficient System [Forbes]
"[Apple] recognizes these and other improvements in the US corporate tax system may increase the Company’s taxes. Apple is not opposed to such a result if it occurs in the context of an overall improvement in efficiency, flexibility and competitiveness. Apple believes the changes it proposes will stimulate the creation of American jobs, increase domestic investment and promote economic growth."
Ireland says not to blame for Apple's low tax rate [Reuters]

 Ireland said on Tuesday it was not to blame for Apple Inc's low global tax payments after the U.S. Senate said the company paid little or nothing on tens of billions of dollars in profits stashed in Irish subsidiaries. The Irish government, which has seen the luring of U.S. multinationals with low taxes as a key part of its economic policy since the 1960s, said its system was transparent and other countries were responsible if the tax rate paid by Apple was too low. "They are issues that arise from the taxation systems in other jurisdictions, and that is an issue that has to be addressed first of all in those jurisdictions," deputy prime minister Eamon Gilmore told national broadcaster RTE on Tuesday.
U.S. Multinationals Paid More Than $100 Billion in Foreign Income Taxes [TF]
Hey, it's something!
Senate Holds Hearing Today on The IRS Scandal [TaxProf]
Don't forget to set your DVRs.
The Bush Tax-Cut Failure [Economix/NYT]
Bruce Bartlett: "
It is hard to find even a reputable conservative economist willing to say anything good these days about President Bush’s tax and economic policies."
Big rig carrying fruit crashes on 210 Freeway, creates jam [LAT]
Best headline of the day.
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