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IRS Auditing How Google Shifted Profits Offshore to Avoid Taxes

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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-13-11 09:00 PM
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IRS Auditing How Google Shifted Profits Offshore to Avoid Taxes
The U.S. Internal Revenue Service is auditing how Google Inc. (GOOG) avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.

The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad, said the person, who requested anonymity because the audit isnt public. The IRS has requested information from Google about its offshore deals after three acquisitions, including its $1.65 billion purchase of YouTube, the person said. The transfer overseas of these kinds of rights has enabled Google to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago.

While Googles potential liability isnt clear, similar deals between companies and offshore arms are often the subject of disputes over hundreds of millions of dollars in taxes, said Daniel Frisch, an economist at Horst Frisch Inc. which advises businesses on transfer pricing -- the allocation of income between units in different countries. In 2006, the IRS settled a case with drugmaker GlaxoSmithKline Plc (GSK) for $3.4 billion.

http://www.bloomberg.com/news/2011-10-13/irs-auditing-h...
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lunasun Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-13-11 09:07 PM
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1. Old news but glad to see the IRS finally heard about it - better late than never
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ProgressiveProfessor Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-13-11 09:26 PM
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2. Similar prior thread
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