IRS Audit’s Google

IRS Audit’s Google

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I just googled “IRS audit of Google” and found this blog post by Paul Caron:

Bloomberg, Google Tax Probe to Focus on Offshore Units, by Jesse Drucker:

The IRS is auditing how Google 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 isn’t 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. …

Google, owner of the world’s most popular search engine, has cut its worldwide tax bill by about $1 billion a year using a pair of strategies called the Double Irish and Dutch Sandwich, which move profits through units in Ireland, the Netherlands and Bermuda. Google reported an effective tax rate of 18.8% in the second quarter, less than half the average combined U.S. and state statutory rate of 39.2%.

This should please the Wall Street occupiers. Then again, maybe it wont. Maybe Google, like Apple, is exempt from their ire because, golly gee, they make some really cool shit.

About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

Comments

  1. HappyTaxDude says:

    Peter, you made me dribble my morning coffee in public when I read your concluding sentence. You should be a staff writer for Conan O’Brien. Your stuff is funnier. Take care.

  2. Thanks Happy. I love Conan.