Amazon Fighting $234M Tax Deficiency In Court

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It looks like Amazon doesn't agree with that $234 million tax bill it was slapped with late last year. According to court filings, the company is contesting IRS tax calculations for money transfers between U.S. operations and its European subsidiaries.

The case centers on the pricing of payments among company units, an issue on which the government has lost some multi-million dollar cases against big companies. "Transfer pricing" refers to how multinational corporations value goods and services moving across international borders from one corporate unit to another. The prices are frequently managed to reduce corporations' global tax costs.
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Wait they are going after Amazon, but not the billions Apple and Google are harboring overseas?
 
If only we could have Amazon replace the IRS. 2 day shipping on tax return checks ftw!
 
The IRS estimate method for this type of thing has been proven suspect in a court of law.
 
the irs needs to have a corporate unit that goes after all the abuses in corporate america
 
Well at least they aren't going after people for the moment. Poor people, middle class, instead for once they are going after someone with a lot of money. The man is temporarily busy.
 
Evil said:
Well at least they aren't going after people for the moment. Poor people, middle class, instead for once they are going after someone with a lot of money. The man is temporarily busy.
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They don't announce when they go after the little people.
 
Evil said:
Well at least they aren't going after people for the moment. Poor people, middle class, instead for once they are going after someone with a lot of money. The man is temporarily busy.
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If they stick it to Amazon, the government will be going after you indirectly, because Amazon's prices will rise to cover their obligations.

All taxes on business and corporate activity eventually filter down to the price you, the consumer, pays for the good or service. Corporations exist to make a profit, and they aren't suddenly going to accept a significantly reduced profit because of an increased tax burden. That cost is passed to you.
 
Good luck Amazon. Least they have the money to fight it.
When I was 19 I had a go around with the IRS, was a nightmare. I lended a hand for a couple weeks to a construction company my friend worked for. They payed me $694, well when the owner filed his taxes, it somehow scanned in the system I made $69,400 needless to say they wanted the taxes for that, and hounded me for 2 years before it ever got straightened out.
 
maxius said:
the irs needs to have a corporate unit that goes after all the abuses in corporate america
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Thank your lawmakers for having the numerous provisions (or loopholes as most call them) in the tax structures that said corporations heavily abuse. They could fix the problem in a few months if they really wanted to, but they don't.
 
maxius said:
the irs needs to have a corporate unit that goes after all the abuses in corporate america
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But then they'd also have to go after themselves, which would be as effective as all the checks and balances that the government has in place to keep itself in check.
 
"Transfer Pricing" is a serious tax avoidance scam. I watched a documentary on how one European company essentially raped some African countries copper reserves, making billions and paying essentially no tax in Africa.

The scam works like this. They mine all the copper, then sell it to a foreign subsidiary in a low/no tax jurisdiction at zero profit price (massivley below world commodity pricing). Often this is merely a paper transaction, in that it gets shipped directly from Africa to Western operations.

But first the no tax subsidiary sells it back at huge profit margin to other Western subsidiaries at ridiculous profit. Now all these other subsidiaries sell again at almost zero profit into western nations paying no tax their either.

All the profit is captured by the subsidiary sitting in the low/no tax country. No taxes for poverty stricken Africa where Billions in Copper were extracted, and no taxes in the Western countries where it is finally used. Billions made and almost all the taxes avoided. Enough layers in your shell corporations and enough lawyers and it is very hard to stop this scam.

You can also apply this to produced goods, not just resources. Amazon USA could export a Billion in books to Amazone Inc Holdings of Luxemburg, for zero profit and claim US export operations make no money. But hey Amazone in Luxemburg is really making money hand over fist (while actually doing nothing).
 
[Tripod]MajorPayne;1039517561 said:
If they stick it to Amazon, the government will be going after you indirectly, because Amazon's prices will rise to cover their obligations.

All taxes on business and corporate activity eventually filter down to the price you, the consumer, pays for the good or service. Corporations exist to make a profit, and they aren't suddenly going to accept a significantly reduced profit because of an increased tax burden. That cost is passed to you.
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Well that depends, it might cost Amazon more money to pass the cost along to you, via decreased sales revenue, than it would to eat the costs, in a competitive market.
 
Snowdog said:
"Transfer Pricing" is a serious tax avoidance scam. I watched a documentary on how one European company essentially raped some African countries copper reserves, making billions and paying essentially no tax in Africa.

The scam works like this. They mine all the copper, then sell it to a foreign subsidiary in a low/no tax jurisdiction at zero profit price (massivley below world commodity pricing). Often this is merely a paper transaction, in that it gets shipped directly from Africa to Western operations.

But first the no tax subsidiary sells it back at huge profit margin to other Western subsidiaries at ridiculous profit. Now all these other subsidiaries sell again at almost zero profit into western nations paying no tax their either.

All the profit is captured by the subsidiary sitting in the low/no tax country. No taxes for poverty stricken Africa where Billions in Copper were extracted, and no taxes in the Western countries where it is finally used. Billions made and almost all the taxes avoided. Enough layers in your shell corporations and enough lawyers and it is very hard to stop this scam.

You can also apply this to produced goods, not just resources. Amazon USA could export a Billion in books to Amazone Inc Holdings of Luxemburg, for zero profit and claim US export operations make no money. But hey Amazone in Luxemburg is really making money hand over fist (while actually doing nothing).
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It's a legal method of avoiding tax in an income tax system. Either support a Fairtax/flat tax system or deal with it.
 
Snowdog said:
You can also apply this to produced goods, not just resources. Amazon USA could export a Billion in books to Amazone Inc Holdings of Luxemburg, for zero profit and claim US export operations make no money. But hey Amazone in Luxemburg is really making money hand over fist (while actually doing nothing).
Click to expand...

You can legally conduct various scams with 2 entities located in the same country, too. Taxes are only tip of the iceberg. It's crazy.
 
sleepeeg3 said:
It's a legal method of avoiding tax in an income tax system. Either support a Fairtax/flat tax system or deal with it.
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So you have no idea about anything related to this.

Transfer Pricing scams are not legal. Changing the Tax system inside the USA to a flat tax (or other) system would not help at all, since the scam involves price manipulation, while selling between international entities.
 
[/B]
Snowdog said:
"Transfer Pricing" is a serious tax avoidance scam. I watched a documentary on how one European company essentially raped some African countries copper reserves, making billions and paying essentially no tax in Africa.

The scam works like this. They mine all the copper, then sell it to a foreign subsidiary in a low/no tax jurisdiction at zero profit price (massivley below world commodity pricing). Often this is merely a paper transaction, in that it gets shipped directly from Africa to
Western operations.

But first the no tax subsidiary sells it back at huge profit margin to other Western subsidiaries at ridiculous profit. Now all these other subsidiaries sell again at almost zero profit into western nations paying no tax their either.

All the profit is captured by the subsidiary sitting in the low/no tax country. No taxes for poverty stricken Africa where Billions in Copper were extracted, and no taxes in the Western countries where it is finally used. Billions made and almost all the taxes avoided. Enough layers in your shell corporations and enough lawyers and it is very hard to stop this scam.

You can also apply this to produced goods, not just resources. Amazon USA could export a Billion in books to Amazone Inc Holdings of Luxemburg, for zero profit and claim US export operations make no money. But hey Amazone in Luxemburg is really making money hand over fist (while actually doing nothing).
Click to expand...

And the problem with this? All companies and peoples basic purpose is to pay as little tax as possible.
 
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