Articles Posted in Tax avoidance

A new technology called “zapper” enables a cash register to create a second false record of all transactions allowing under-reporting of sales receipts by retailers. Now the tax man is paying attention and use of the hardware and software may be illegal.

The program tricks  tax authorities with a second set of books that look convincing. Zappers,  have already been banned in 20 states.

The use of zappers is illegal and may be subject to criminal penalties. However, according to a New York Times report, governments worldwide have yet to find effective means of prosecuting their use.

The European Commission has made preliminary findings that Apple has benefited from illegal state aid after arranging deals with Irish officials in secreat, resulting in Apple paying less than 2% corporate tax for several years.

The Commission says it will publish its preliminary decision this week which  will explain why it believes that two tax agreements between the US computer, software and mobile phone maker and the Irish government – in 1991 and 2007 – were considered as illegal forms of state aid.

Apple has been in Ireland for 34 years. The company says the agreements set up with the Irish government are not illegal. The company denies wrongdoing.

U.S. corporations including Burger King, Medtronic Medical Devices and Chiquita Banana  and many others that  have merged with foreign firms and shifted their headquarters to avoid U.S. taxes, may not only come under scrutiny by the IRS but also by consumers who recognize that this activity is unpatriotic and damaging to our nation.

Some conservatives point out that publicly traded companies have a primary responsibility to the shareholders and saving loads of tax dollars meets this responsibility.  Balances against that, costs to the U.S. treasure are massive. The Joint Committee on Taxation stated that the nation will lose $20 billion in tax revenue in less than 10 years. Others think the losses will be much higher.

As Congress is in its typical gridlock mode, there is a force which could change the course of the corporate deserters and that is the buying and boycott power of the American consumer. Burger King, which presently pays about 35% in taxes, when there are no losses, might be able to reduce that to about 7% if it shifts its operations to Canada. However, given that most of the Burger Kings are in the U.S., if there was a consumer boycott, stock prices would plummet and sales would stagnate, offsetting by far any tax advantages.

During the past year, a dozen major U.S. corporations including medica group Liberty Global, Chiquita Banana and Pfizer have started shifting their headquarters and tax base overseas, according to Reuters. Several have re-based their operations to London including Aon Plc, CNH Global N.V., Delphi Automotive, Esnco, Liberty Global and Noble Corporation. Continue reading