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Google Sues IRS for $83.5 Million Tax Refund
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King Icewind
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Nice little check to be written.
MikeTrike
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This amuses me. 
sfsuphysics
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So there's a statute of limitations of 3 years to claim a tax refund for all of us average joes, nearly a decade later google can sue and try and get one? Hope they lose this suit on principle alone.
Unless of course they did claim for one and simply have been going back and forth with the IRS.
Unless of course they did claim for one and simply have been going back and forth with the IRS.
Twisted Kidney
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This is just part of the process in corporate tax.
American corporate tax code is a cluster fuck, it still isn't completely understood by anyone. Hence all of the court activity to decide what clause regarding a clause regarding an exemption from a clause that changes an applied clause to a different clause that is then applied to the first clause.
American corporate tax code is a cluster fuck, it still isn't completely understood by anyone. Hence all of the court activity to decide what clause regarding a clause regarding an exemption from a clause that changes an applied clause to a different clause that is then applied to the first clause.
leeleatherwood
[H]ard|Gawd
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Probably this, I am sure lawyers have been bickering back and forth about it for years.
I always laugh at how little the corporations have to pay with all the loopholes in place after successful lobbying. Having them fight for the right to deduct an extra $83.5 million is laughable, but if successful will put them at an insanely low tax bracket, "legally". So all corporations are equal (35% corporate tax break) but some are more equal than others (loopholes down to <10% corporate tax actually paid, lower than what the average middle class citizen pays.)
wonderfield
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Corporations tend to pay a lower percentage of income, but they also tend to pay substantially more in terms of dollars than most any individual non-corporation tax-paying entity. A person, in other words.
ReconSniper
[H]ard|Gawd
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Lets be honest though, we all would have to contribute to pay Google back. It's not as if the Prez will cancel a vacation to spend that money on Googles request. More like we get hit a little harder this year.
There is no such thing as an insanely low tax bracket in America.
Most people are taxed over 50% when you add all the new taxes invented over the last 2 generations.
But yeah, Google isn't paying what other large corps are. Most are at about 5-10% of gross sales, plus property taxes, inventory taxes, employee taxes, etc.
About 20% of the price of gasoline is due to US Fed Income Tax from double tier taxation. 10% is from the producer, 10% from the wholesaler.
LeninGHOLA
Vladimir Hayt
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That's not how it works, at all.
I think you should specify your not just talking Fed taxes but Fed+City+County+State
Correct. There are hundreds of taxes now, spread through community, local, county, state, Fed, and if you count our funding of the UN, world.
The Politicians figured out long ago that there are two things they needed to do to boost taxes over 50%:
Make more small taxes.
Do everything as a percent, and raise the percent slowly.
It's the same way you cook a frog. You put it in a pan of cool water, then put it on the stove. By the time he figures out he's being cooked, it's too late to jump out.
I find it laughable when people think the Democrats eliminated taxes for the poor. Sure sounded good, but they were the ones who came up with the Hundreds plan.
They knew they had to tax everybody, but they knew they couldn't be re-elected if they appeared to tax the poor.
They knew they had to tax everybody, but they knew they couldn't be re-elected if they appeared to tax the poor.
The authors and many commentators misunderstand how tax procedure works. Google is NOT suing to get money out of the IRS. This is NOT a tax refund suit (such suits are filed in the Court of Federal Claims or in a United States district court). Rather, Google is going to court to try to prevent the IRS from collecting tax it says Google owes.
The statue of limitations is the same 3 years as for everyone. In this case, that 3 year statute of limitations is only the time limit for the IRS issuing a notice of deficiency. However, when an IRS is conducting an audit, the taxpayer will often consent to extent the statute of limitations, especially in complex cases. This occurs because there is usually insufficient time to fully develop the audit case prior to the running of the statute of limitations. The taxpayer usually consents because if the statute of limitations is about to run and the taxpayer does not consent, the IRS will just file a notice of deficiency assuming the worst case scenario.
It's also important to remember that this is pretty much par for the course in corporate taxation. The tax law governing corporate transactions is far more complex and has far more grey areas than for most individuals. Even experts are often 50/50 on the correct result of a transaction. As a result, big companies are always battling out the correct tax with the IRS. Don't think reform is likely to change this. Corporate taxation will always be complex because corporate transactions are complex.
In other words, move along nothing to see here.
The statue of limitations is the same 3 years as for everyone. In this case, that 3 year statute of limitations is only the time limit for the IRS issuing a notice of deficiency. However, when an IRS is conducting an audit, the taxpayer will often consent to extent the statute of limitations, especially in complex cases. This occurs because there is usually insufficient time to fully develop the audit case prior to the running of the statute of limitations. The taxpayer usually consents because if the statute of limitations is about to run and the taxpayer does not consent, the IRS will just file a notice of deficiency assuming the worst case scenario.
It's also important to remember that this is pretty much par for the course in corporate taxation. The tax law governing corporate transactions is far more complex and has far more grey areas than for most individuals. Even experts are often 50/50 on the correct result of a transaction. As a result, big companies are always battling out the correct tax with the IRS. Don't think reform is likely to change this. Corporate taxation will always be complex because corporate transactions are complex.
In other words, move along nothing to see here.
Correcting my earlier post, while refund suits are usually in claims or district court, they are litigated in tax court in certain circumstances. Google may have paid the tax to protect itself from interest and penalties, but it could have chosen not to do so and go to tax court.
Here's an example of existing corporate tax:
This is just Federal Income Tax. It amounts to about 8% average of gross sales, ie - it's not 45% of a misleading loophole laden Net Income, it's a freakin' huge number in it's own right. There isn't a huge margin on oil sales, as it's very competitive with price changes constantly.
The Fed tried to increase this tax, but failed by a slim margin.
This is just Federal Income Tax. It amounts to about 8% average of gross sales, ie - it's not 45% of a misleading loophole laden Net Income, it's a freakin' huge number in it's own right. There isn't a huge margin on oil sales, as it's very competitive with price changes constantly.
The Fed tried to increase this tax, but failed by a slim margin.
Because the truth is highly technical and complicated. Doesn't make for very engaging reporting.
It's used as an incentive to do business. The government steers people toward certain behaviors by offering tax breaks. Buying businesses, houses, marriage, etc. Businesses get raped on taxes otherwise. My employees complain all the time about the things I can write off but they aren't paying for unemployment, workman's comp, sales taxes, etc. In the end doing business isn't the tax cakewalk everyone thinks it is.
Chunder
Gawd
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The IRS should say sure, right after you give us the billions you owe the people from your overseas tax evasions..
The term "Flat Tax" can mean many different things. But hate to break it to you, as long as the government exists, there will be an IRS. Some agency has to be responsible for collecting revenue. And even the simplest tax regime can be extremely complex when applied to complex activities.
You can make the argument that they owe in some sort of moral sense, but the IRS can't collect taxes that aren't legally owed. Google is a very well advised company and is unlikely to take any tax positions that have no foundation under the law.
On a side note, the IRS actually often does "horse trade" between different tax issues on audit.
The tax code is used to give the Fed more authority than the law would normally allow.
Everyone pay 10% of gross receipts. Period. Applies to non-profits, churches, everybody.
That would INCREASE the taxes of corps and the rich, and make the poor pay something to support our country.
The GNP is 15 Trillion, 10% would be 1.5 Trillion. Which is the same as current amount of the Federal Total Income, minus Social Security, which is a separate entity.
So the Fed would still collect the same, but they couldn't use the tax code to hand out favors to their buddies.
Everyone pay 10% of gross receipts. Period. Applies to non-profits, churches, everybody.
That would INCREASE the taxes of corps and the rich, and make the poor pay something to support our country.
The GNP is 15 Trillion, 10% would be 1.5 Trillion. Which is the same as current amount of the Federal Total Income, minus Social Security, which is a separate entity.
So the Fed would still collect the same, but they couldn't use the tax code to hand out favors to their buddies.
Tell that to people who lived before 1911 which is before the IRS and income tax existed.
As long as there is an income tax there will be an IRS. Remove the income tax and move everything into a sales tax and Poof IRS no longer needed........Federal Reserve however would take much more to kill.
Is this some sort of autistic justice?
This is one of the least likely political ideas I've come across. It's more likely the states have a new Constitutional convention and agree on several new amendments and repeal four or five.
If a corporation has $10 billion in gross receipts, I could see them taking very aggressive action not to comply with a "simple" $1 billion due.
Oh no, it could never pass. Tax codes are used generate campaign donations. They aren't going to give up on loopholes when it benefits the politicos.
But, it would generate the same income. Actually more if Churches and Non-Profits had to chip in. Think about it. Shouldn't Churches and Non-Profits help pay for schools, roads, and welfare?
Because the Democrats would lose at least 98% of their "talking points" if they told the truth.
The media for the most part are liberal Democrats.
When you take that into account, it is no wonder we have all this left wing propoganda spewing out of their mouths.
Retronym
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I always laugh at how there is a corporate tax in the first place.
Prior to the IRS, the Treasury did the same job. Before the income tax, import tariffs were the major source of tax revenue. There were plenty of fights over tariffs.
Sales tax is actually extremely complicated for businesses. You would absolutely need an IRS with a consumption tax.
This would result in many businesses being taxed in excess of 100% of net profit. It would greatly favor high margin industries over low margin industries. You also forget the tax gap. The government will never collect 100% of tax owed.
The tax code will always be used for favors. Even a completely "neutral" tax code isn't neutral with respect to the status quo.
Well, sales tax is approaching 10% and no retailers are collapsing, so I'd say you could adjust prices to compensate.
Your competition has the issue, and they will raise prices also.
Total sales are much easier to track than the current tax code with depreciation, holdovers, etc, etc.