Around the Net
Source: IRS Auditing Google
- Bloomberg Businessweek, Thursday, October 13, 2011 12 AM
In other Google news, the IRS is reportedly auditing how the search giant avoided federal income taxes by shifting profit into offshore subsidiaries. “The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad,” reports Bloomberg Businessweek, citing a source. The IRS has apparently requested information from Google about its offshore deals after three acquisitions, including its $1.65 billion purchase of YouTube.
By transferring these kinds of rights overseas, Google has been able to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago. This time around, “While Google’s potential liability isn’t clear, similar deals between companies and offshore arms are often the subject of disputes over hundreds of millions of dollars in taxes,” Bloomberg Businessweek reports, citing comments from Daniel Frisch, an economist at Horst Frisch, which advises businesses on transfer pricing -- the allocation of income between units in different countries.
