patrick.net

SFace says

As a controller, that is a stupid statement. Do you tell your boss no it cannot be done all the time. Accounting is based on entity concepts and related entity transactions are based on arms-length theories.

If you have revenues related to your US customers ( in any of the 50 states) and expenses to your US employees and vendors ( in any 50 states), how exactly are you carving the (pre tax profit or taxable income) items out and transferring to some other Entities oversees at some other foreign currency unrelated to the sale?

This is a boondoggle!

SFace says

Let's say the US entity has 2B in Gross Receipts and 10% operating margin or 200M in income. If they can allocate more favorably and achieve, 8% operating margin, taxable income is now 160M, or a difference of 40M. @ 35% that is 14M in tax. Good luck to the IRS to fight over and win om something that is well documented and supported from the transfer pricing study.

each entity serves its own market.. there are boundaries to which apple in US sells to US customers only.. Apple france sells to french customers only .. etc etc etc. Your not shifting any profits around to meet your targeted net income.

Transfer pricing at one time was used when we actually had production and plants on US soil and shipped goods overseas and billed the foreign entities for the goods... but that is history.. we dont do that anymore. Now it comes from Foxx Comm (Third Party arms-length agreement)..

Today, each global Apple sub gets the goods and a bill ....X units and the total bill to be paid to FoxxComm for the shipment as finished goods. And many others mfg. do the same.

SFace says

A big multinational company has billions in resources, it is fair to say the the IRS does not have the type of resource to proof otherwise as there are 10K multinationals but one IRS. This doesn't even count foreign multinationals like Sony, Fujitsu and Samsung which has the same issues. There is a lot of vertical and horiozontal integregation between a large multinational containing dozens to hundreds of entity. Why do you think GE's tax return is sonmething like 20K pages?

You have local US state auditors, IRS auditors, and your third party Independent audits ( segment reporting) ALWAYS reviewing the numbers.

The huge multi-nations invest in Oracle / SAP and other ERP systems to allow them to track all of there financial results.

In addition, you have internal controls in accounting, tax, and IT that prevent creating any tax scheme avoidance.

SFace says

Go to indeed.com and search title: "international tax". There are currently 650 postings just on jobs that is strictly for international tax alone.

As there are International Accounting jobs as they relate to FAS 52 consolidations staff. Someone has to do the work and oversee compliance.

But they also have State Tax Managers, Fed Tax Managers, and Sales/Property Tax managers. No sinners to be found here.

SFace says

What the NYT described is in fact true. I think you need to step back and think about how these things work carefully. These issues are mostly high level legal issues designed to be IRS audit proof, albeit controversial, thus the financial audits will agree with these positions.

your source in the NYT.. not what he writes about as FACTS! Its all politics.

David Kocieniewski is a business reporter who has been covering the nation’s tax system for The New York Times since 2010.

"Neither corporations nor the government make tax returns public, and the information most companies disclose in their regulatory filings is insufficient to determine how much they pay in federal taxes and how that compares to the official United States corporate rate of 35 percent." - David Kocieniewski

http://www.nytimes.com/2011/09/11/technology/rich-tax-breaks-bolster-video-game-makers.html?ref=davidkocieniewski

SFace says

You're "Mr. No", "can't do it", "not possible" The fact is they all take it to the legal limit. and the end result is the US always get the smallest portion possible for obvious reasons.

What does a sale (revenue) in the USA to a US Customer have anything to do with Ireland or any "Tax Heaven". Which "arbitrary revenue and expenses" in the US are you going to carve out to transfer to a foreign entity to reduce or defer taxes.. no such practice exist today.

SFace says

My source is my knowledge from reading thousand's of 10K's, undertand how business and corporate structuring works in careers that look closely in these things in client service, and M&A.

My suggestion is go work for a big corporation.. SF based SalesForce, Oracle, or McKesson. Nothing like real life experience know the processes and the people actually doing the work.

"Neither corporations nor the government make tax returns public, and the information most companies disclose in their regulatory filings is insufficient to determine how much they pay in federal taxes and how that compares to the official United States corporate rate of 35 percent." - David Kocieniewski

SFace says

I also sleep with someone that deals with this stuff. What the NYT descrribe is dead on accurate.

I banged enough accounting pussy, but we never talk about shop!

thomas.wong1986 says

your source in the NYT.. not what he writes about as FACTS! Its all politics

You are the best tap dancer I've seen since Fred Astaire in "Puttin on the Ritz". The question stands, where are all the rebuttals for the NYT article, or for earlier articles in Forbes, WSJ, and The Economist about the exact same accounting practices. How has the entire world missed all these political stories that are non facts in such major publications? Why don't you rebut the story in detail.

thomas.wong1986 says

your source in the NYT.. not what he writes about as FACTS! Its all politics

You are the best tap dancer I've seen since Fred Astaire in "Puttin on the Ritz". The question stands, where are all the rebuttals for the NYT article, or for earlier articles in Forbes, WSJ, and The Economist about the exact same accounting practices. How has the entire world missed that these were only political stories that are non facts in such major publications? Why don't you rebut the story in detail.

bob2356 says

How has the entire world missed all these political stories that are non facts in such major publications? Why don't you rebut the story in detail.

they are journalists... surely they must have spoken or can get info from public accounting firms tax advisors and publish it.

but that would kill the political goals of the left.

Had there been something shady going on.. the IRS, SEC, and foreign Revenue (tax) authority would be all over this... like a pack of wolves.. where is my money?

thomas.wong1986 says

I banged enough accounting pussy, but we never talk about shop!

I'm going to have to go with Thomas Wang on this one. By the transmissitive property of accounting rules, he must have caught a knowledge outbreak by now.