Walmart Dodged US Tax on $2 Billion by Routing Cash Through Multiple Countries, Whistleblower Says (qz.com) 226
Walmart, the world's biggest retail company, underpaid US taxes on nearly $2 billion worth of offshore cash, according to whistleblower documents filed by a former Walmart executive to the Internal Revenue Service (IRS) in 2011, and recently obtained by Quartz. From the report: The firm avoided nearly $200 million in taxes on that money and "dramatically" overstated its foreign tax credits in 2009 and 2010 by routing payments from Luxembourg to the United States via the United Kingdom and not declaring they came from a tax haven, the whistleblower wrote. If Walmart claimed all the tax credits, it could have improperly avoided paying close to $600 million in total via the maneuvers, according to the files. The whistleblower argued in the documents that the company should owe all that money to the IRS. A second former executive, who shared the files with Quartz, confirmed the whistleblower's allegations. Walmart denied any wrongdoing. "The transactions brought to our attention were appropriately reported to and audited by the IRS," a spokesman said in an emailed statement. "The tax years covering this matter were closed by the IRS more than seven years ago." The spokesman declined to say whether the company explicitly told the IRS that the money originated in Luxembourg, rather than the United Kingdom.
Good to hear .. (Score:2)
that he got a job outside of the federal Govt
Tax Fraud is normal - almost all do it (Score:5, Informative)
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FIFY.
Re:Tax Fraud is normal - almost all do it (Score:5, Insightful)
The IRS does not have enough well paid international tax investigators to chase things like this down.
That's deliberate. Newt Gingrich's moment of brilliance was when he realized that he didn't have to eliminate organizations like the FDA, EPA and IRS, all he had to do is to make their enforcement divisions a budget line item that could be squeezed to nothing. The IRS enforcement division used to be able to the fines levied on further investigations, now it goes into the General Fund and they're limited to an ever-shrinking budget and management by hostile political appointees (another Gingrich change IIRC) that has demoralized those employees that haven't been laid off.
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It's interesting. A single fine in excess of $100M could fund a few people for an entire tenure, which would then result in more fines.
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The problem is not who, where, or how fines are levied or used.
The problem is that fines are involved. Any time money is in the picture a perverse incentive is created for government to abuse their power and for wealthy people to buy privilege.
Criminal Prosecution, and a point system where businesses get some leeway for minor infraction. To many minor infractions or a single major one gets the owner or board put on trial where a guilty verdict renders only 1 penalty. 100% of the current remaining assets
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Patriotism (Score:2)
Re: Patriotism (Score:2)
Well, you cannot even spell Walmart, so you would probably fit right in with the crowd that shops there.
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Didn't they have some similar name on South Park?
Was that with 2 'l's, or noels?
Sorry, Christmas is coming up so I needed a joke.
More sarcasm, but I can't help it (Score:5, Funny)
- their vehicles never drive on any public highway
- they never call on public fire, police, or rescue departments
- they don't use the internet in any way
- they take no water from public water systems or use commercial services that do
- they never take a case to a public court
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It's a standard legal concept you only pay taxes where they are accrued. There are some exceptions like many nations have reciprocal social security style agreements to allow your accrual outside to count inside, but that's a different issue.
Any US help in another country is to help that other country per treaty or just US interest, in the spread of dictatorial impulses. Walmart's US taxpaying portion covers it. Walmart's foreign benefit accrues by being in that land.
I can't tell if you are the stupid on
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Morons coming? (Score:3)
And yet... (Score:5, Insightful)
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For now.
Give it time.
Simplify measurement (Score:2)
They should tax only a company's in-country sales revenue instead of profits because profit is too easy to manipulate and shuffle around the world and time.
It's much harder to hide in-country sales revenue than profits.
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I think he is saying that if the US Federal Government had that money they would cause bloody mayhem around the world. I don't think he knows how the world works. The US Federal Government has an infinite supply of money.
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I think he is saying that if the US Federal Government had that money they would cause bloody mayhem around the world. I don't think he knows how the world works. The US Federal Government has an infinite supply of money.
Supposing you're correct in your assumption the US gov't has an infinite supply of money... well at the very least, they little need, nor long regret, the missing Walmart tax money.
Unless; it is a matter of principle, an admittedly odd word when used to describe government motivations, and the Walmart must be taught a fucking lesson.
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They didn't need it. The IRS didn't even pursue the case. This was form 2011. Not sure why this is being brought up now.
Re: Good for them. (Score:2)
No it doesnâ(TM)t. It only has the ability to go infinitely in debt by print Federal Notes and exchanging them for debt.
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No it doesnâ(TM)t. It only has the ability to go infinitely in debt by print Federal Notes and exchanging them for debt.
Much of that debt is held by the Federal Reserve. The Fed pays any interest collected back to the treasury. So the treasury basically get interest free loans that never need to be repaid. That may not be literally "printing money", but it is functionally the same.
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No it doesnâ(TM)t. It only has the ability to go infinitely in debt by print Federal Notes and exchanging them for debt.
Much of that debt is held by the Federal Reserve. The Fed pays any interest collected back to the treasury. So the treasury basically get interest free loans that never need to be repaid. That may not be literally "printing money", but it is functionally the same.
What about debt that is held by foreign entities? That interest flows outside the country, not to the treasury.
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Same thing. They can buy whatever they want.
Re:Hope Walmart keeps the money (Score:5, Insightful)
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Re:Hope Walmart keeps the money (Score:4, Insightful)
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So the US government can set a rule requiring that the New York Times not run negative stories about President Trump (or Obama)? That doesn't seem right.
Maybe you didn't really mean that the rules can be anything that they'd like, but that would require getting deeper into what rules they can and cannot make.
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150 odd countries where the USA has interfered, usually by backing overthrowing the legitimate government to favour various corporations, which costs money though the CIA has been known to self finance by selling arms and drugs.
Don't let the door hit you on the way out. (Score:2)
Yeah, but the question is What does the US do to earn the money they claim?. And in the case of foreign earnings of US corporations, the answer is they don't do a lot.
It lets them continue existing as a business.
If corporations don't want to follow the rules in America they can always sell or close their business. They are free to try and set up a new one in a different country with rules they like better.
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U.S. companies are not owed existence as a legal entity.
Re:Hope Walmart keeps the money (Score:4, Informative)
The US is not owed money made by US companies' foreign branches just because the US makes a claim on it.
Let's go with that; that foreign profits are off limits. The US is still owed tax on domestic profits, fair?
There is a subtle bit in the article about those foreign profits being misrepresented to gain tax credits on domestic profits. Tax credits may be fair game (for whatever reason that congress decided), but misrepresentation isn't.
Re:I don't understand (Score:5, Insightful)
Because some people aren't self-interested assholes, and are interested in looking out for the well-being of others? Do you find that idea to be alien to you?
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May be a Trump voter who believes in the Trump way of using and screwing. Use them for personal gain until they're no longer useful to use, then screw 'em. (I'll leave it to the audience to figure out which meaning of "screw" I mean).
Things like empathy, karma and other things are foreign co
Re:I don't understand (Score:5, Insightful)
Says the guy complaining over the Internet which was funded by taxpayer dollars. People really are spoiled and stupid.
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Re:I don't understand (Score:4, Insightful)
What in the world are you talking about? Taxes go to pay for all of the things that the government does. If the government has more money, more money can be spent on things to make our lives better.
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These guys are "Libertarians" (a.k.a. white suburban males). They don't need no gubmint!
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Libertardians think the Magical Mystical Free Market Fairy will wave her magic wand and provide for all their needs.
Re: I don't understand (Score:2)
By that logic, the govt should be the possessor of all money. Just imagine all the good it could do for us!
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By that logic, the govt should be the possessor of all money. Just imagine all the good it could do for us!
Just imagine all the wars and prisons we could afford if the government had more money.
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By that logic, the govt should be the possessor of all money. Just imagine all the good it could do for us!
It's not that simple. Governments collect taxes to provide things that private interests would not support, or at best, would not do so without public money.
Can you really run a military as a for-profit business? Drop a bomb on someone, send them a bill?
Can you imagine a fire department that would say "no, we won't stop your house from burning, it's not profitable"?
If your house is being robbed while you're in it, do you need to pull out your credit card when you call 911?
People of good will are going to di
Re:I don't understand (Score:5, Insightful)
If Walmart and other extremely wealthy cheats would pay their due, rates would go down for you and your neighbor.
It's especially egregious when Walmart cheats given how it has mis-used the social safety net as a payroll subsidy.
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If Walmart and other extremely wealthy cheats would pay their due, rates would go down for you and your neighbor.
And on what basis do you say that? I don't believe, for one second, that if Walmart and other large corporations were to "pay their dues," that my taxes would go down.
Re:I don't understand (Score:4, Insightful)
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Re:I don't understand (Score:5, Insightful)
This may be something a few people don't believe but there is right and wrong. When you lack ethics this sound silly. What these companies do sounds illegal, it is definitely unethical. Its why Europe is ascending and the U.S. is failing. These companies get rich off of us and then have the nerve to not pay their fair share. They keep the captive market the way it is in order to prevent any real competition.
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Whisteblowers are entitled to 10-30% of the monies collected. So if it is $2 billion they might get $200-$600 million in compensation.
Re:I don't understand (Score:5, Insightful)
Unlike Libertardians some of us actually LIKE civilization. Clean air, drinkable water, safe food, streets, and the like. That takes money, and taxes are where the money comes from. If you don't want to pay taxes you can always go live in the Unabomber's hut or move to Somalia, the rest of us will pay our fair share.
Re: I don't understand (Score:2)
Unlike you, libertarians know the difference between anarchy and government. Where do you think the funding comes from to pay for the government which is intended to secure our liberties?
Re:I don't understand (Score:5, Insightful)
Setting up these tax dodges takes legal knowledge, help of representatives in other countries, shell companies, perhaps access to and clout with tax inxpectors. None of that comes cheap. Your €100k in profits might not even pay to set up all of that. If you have €100M, the expense makes sense. So the shopkeeper ends up paying 25% on his profit, the corporation perhaps 2%. And if you think that difference offsets the amount of cash that changes hands under the counter in a small business, think again. It doesn't, especially in countries where cash is on the way out.
Should the corporate tax be lower? Perhaps. But in that case lower the tax across the board, and close these loopholes.
Re: So? (Score:4, Insightful)
Re: So? (Score:2)
Poor people in the use donâ(TM)t pay Federal income taxes.
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So not only did you not read the article, you couldn't even comprehend the summary? They fraudulently avoided $200 million in taxes.
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Please pay more attention to the meaning of words.
If they did something fraudulent in order to avoid the tax, then they did "have to" pay it, and it was tax evasion.
I hope they don't let you near any SQL or anything.
Re: So? (Score:4, Interesting)
I don't think I can argue your point contesting that it was not fraud, I think you're right. But I think there is something to say about people being upset, regular (middle class) folk are largely bearing the tax burden, and legal or not, when you see how grossly unfair it feels, us regular (middle class) folk tend to sperg.
The funny part though, which I cannot back by numbers, is most of our being upset is looking at large numbers. "They didn't pay an amount I'll never, ever earn in my lifetime", but in the grand scheme of things, maybe that large amount is liken to me saving $30 on taxes because I saved receipts some sending my kids to daycare...
So maybe the word "unfair" isn't justified, maybe it's just not being able to adequately relate...
For me at least, if it's money I owe, 100k might as well be a gazillion dollars. At some point the numbers stop being linear, and start feeling unimaginable.
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But I think there is something to say about people being upset, regular (middle class) folk are largely bearing the tax burden, and legal or not, when you see how grossly unfair it feels, us regular (middle class) folk tend to sperg.
Why is it grossly unfair for Walmart to avoid paying tax to the American government on sales made in Europe?
Perhaps it is Europeans that should be upset about America's extraterritorial tax collection.
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I'm not sure it's unfair, but it is grossly uneven.
as a citizen, can I decide where to pay tax? (cheat point, I'm actually Canadian)
but that aside, it's not an equal playing field, if you argue the point you're probably profiting.
I pay personally nearly 50% of my gross earnings to tax or things disguised, but are actually taxes...
there is a magic gross earning number in Canada, something around 100k, where if you earn more its golden, no more than 50% taken, but it winds down to people earning as little as
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Tax avoidance != tax evasion. Get it through your thick head. It's perfectly legal to avoid paying tax that you don't have to pay.
Well of course it is. But that's not the point here.
The whistleblower(s) alleges that the company engaged in tax fraud, and described the process by which it was done. Walmart denies they did anything wrong. We'll see how this plays out. I predict Walmart will be the subject of investigation eventually, but not while Trump is in office.
Re: So? (Score:5, Insightful)
No one should complain when tax laws are fully and legally leveraged to reduce the tax burden. If you don't like it, change the law.
Only people like Walmart have enough money to change laws. We don't.
Re: So? (Score:5, Insightful)
Except according to the whistle blowers, it wasn't quite legal.
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Except according to the whistle blowers, it wasn't quite legal.
The statute of limitations on most financial transactions is seven years.
So even if it was illegal, it may be too late to do anything about it now.
Why did the whistleblower wait so long?
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Except according to the whistle blowers, it wasn't quite legal.
The statute of limitations on most financial transactions is seven years.
So even if it was illegal, it may be too late to do anything about it now.
Why did the whistleblower wait so long?
Perhaps because s/he is potentially implicated?
If there's hey-nonny-nonny like this from seven years ago, odds are there's stuff that's more recent. And maybe the whistleblower is not involved with it.
Should be a good show from here on. Bring the sodas, ShanghaiBill. I'll make the popcorn.
Re: So? (Score:4, Insightful)
No idea why the whistleblower waited so wrong. Sure, it may be impossible to pursue the matter if the statute of limitations ran out, but it's still criminal behavior so the AC's comment is still invalidated.
Think of it this way, if you were interviewing people and one of them said "I stole $20,000 from one of my employers but the statute of limitations expired so it's all good". would you hire him?
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Whistleblower says the opposite :"The transactions described in the documents are not illegal,"
Re: So? (Score:5, Informative)
Did you read the summary?
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If you don't like it, change the law.
The problem being is that lobbyist help craft laws in the US. Those lobbyist cost money. Those who avoid taxes can divert some portions of that savings to continued lobbyist efforts to continue those tax laws that benefit them. So, those who see the laws currently in place as unfair are denied a voice without some aggregate push. No aggregate push can come from the public without the public being made aware of the current problem.
Don't give me that "passes the savings" onto consumer bullshit. That's a complete fallacy. Corporations tend to hoard money that is saved
Is someone indicating the issue that the public ought to rally behind. So
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Re: So? (Score:2)
If I had a way to avoid hundreds of millions of dollars in taxes, I would do it too.
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I wouldn't. If normal people try to pull shit like this, they usually start digging 'til they find something to hang you for.
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So you enjoy paying more tax so a corporation can get richer? Because someone has to foot the bill eventually.
Good for you.
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Because the US government can always tell those US corporations that they're not US corporations any more.
Many US corporations would be delighted to lose their American domicile.
There are severe restrictions on renouncing American corporate registration.
Tax inversion [wikipedia.org]
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The US's approach to taxing foreign operations reminds me of Cherryh's Merchanter-Union novels where the Earth Company insists it owns all the far flung interstellar space stations and can't figure out why the inhabitants object and/or just ignore them.
Yeah, it's much better to be part of Union so you can be "adjusted" if you don't do as you're told.
Re:Sometimes reality is like fiction (Score:5, Informative)
No. Taxes. Payed. On. The. Planet. Earth. None.
What kind of organizations hide money to avoid paying taxes? Criminal organizations like the Mafia or drug cartels. They even use the same tactics. Hide the money overseas and move it around between accounts to cover their tracks.
So Walmart acts like the Mafia. That shows the people at the top of both organizations think alike.
You are an asshat.
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It would be far better for the US government to simply apply consumption tax at the point of sale
Why should the person buying the product be penalized? Many states already have a sales tax on purchased goods and services, and you want to add another tax on top of that?
On top of which, there is no way this country could function if this was implemented. There would be nowhere near enough revenue for even basic functions.
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There's no automatic mechanism to raise the price of goods when the tax rate goes up; it can just cut into the profit margin a little more.
Sales taxes are regressive - the very poor pay the same amount as the ultra rich for a given item. We've evolved past that with income and wealth taxes.
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It's the duty of publicly-traded companies to minimize their income tax burden by all legal means possible.
No, it's the duty of publicly-traded companies to follow their charter. Most of them place maximizing shareholder value at the top of the charter, but that's not a law.
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The zeroth item on the list is operate for the public good.
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The zeroth item on the list is operate for the public good.
Maybe before Citizens United. But I believe those days can come again.
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Sounds good, except that It's the duty of publicly-traded companies to minimize their income tax burden by all legal means possible.
One problem with that: The large publicly traded companies are the ones buying those laws.
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One problem with that: The large publicly traded companies are the ones buying those laws.
If the government didnt have the power, it wouldnt be up for sale.
Re:We need to make this a serious crime. (Score:5, Informative)
Sounds good, except that It's the duty of publicly-traded companies to minimize their income tax burden by all legal means possible. And private ones and individuals also try to minimize their tax exposure
Actually that bit of fiction was introduced in the 1970s when the "Business Ethics" classes were inserted into the MBA programs. Prior to the 1980s almost every state's laws included the proviso that chartered corporations act "in the public interest". That's why prior to the 1970s corporations sponsored public parks, libraries, even things like electrification. It wasn't PR, it was part of doing their public duty.
Not everyone hides their income to avoid taxes. We could shelter more of our income, but we don't because we like living in a community that has good schools and safe streets and clean water. Paying for freeloaders like yourself is annoying, but not nearly as much as when one of the richest companies in the world want to foist the cost of their operations onto the back of the rest of us.
"Social good" is something modern MBAs consider (Score:3)
Sounds good, except that It's the duty of publicly-traded companies to minimize their income tax burden by all legal means possible. And private ones and individuals also try to minimize their tax exposure
Actually that bit of fiction was introduced in the 1970s when the "Business Ethics" classes were inserted into the MBA programs. Prior to the 1980s almost every state's laws included the proviso that chartered corporations act "in the public interest".
There may have been a court decision on acting in the shareholders best interest. As for what 1970s/80s MBAs were taught we'd really need to hear from a few of those, there is so much misinformation about what MBAs are taught. For more recent decades what I've seen taught is a more comprehensive stakeholder perspective, shareholders being only one stakeholder, employees another, the surrounding community being another, etc. Regional and global environmental concerns also being things to consider in modern M
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Remember Lee Iaccoca's marvelous Ford Pinto? They frequently burst into flames in a rear end collision because of the poor placement of a bolt. Iaccoca and his managers **KNEW** that the bolt would puncture the gas tank just above the hot muffler, testing found it even before production began. It would have cost $1.50 per car more to move the bolt, Ford's actuaries felt that lawsuits from survivors of the resulting infernos would cost $1.15 per car. The bolt stayed in place, and dozens of people died an
Re: We need to make this a serious crime. (Score:2)
At least some of the costs of a military deployment overseas (Korea, Germany, etc) is borne by the host state. Bring all the soldiers back and we are now responsible for all of the costs. What, you thought the military would cut back numbers? They won't.
Plus you lose the strategic advantage of having troops prepositioned and regular training with likely cofighters while also losing a good amount of power projection.
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The move in TFA was not legal. Next excuse please!
Re: We need to make this a serious crime. (Score:2)
That's not true. Profit above all is not the law of the land. That's a choice the corporate governance makes. They have used lies to trick you into thinking they are forced to derive profit at all costs. You fell for it. Now use Google and go disabuse yourself of that misinformation.
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To the people who still believe corporations pay taxes, congrats. The government is quite happy you are so deluded and subsequently "angry" at corporations for their very existence. Now here's a clue: Corporations do not pay taxes; people pay taxes--ALL of them...
all what you say may be true but what about when they use their enormous cash flow to circumvent the law, overpay their executives and shareholders, underpay their employees and overcharge their customers ...
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