Volume 4, Number 8 What’s News— Forget Inversions, These 20 Huge, Profitable Companies Already Pay Zero Tax For full article, click link above. Why undergo the bad press and potential Congressional backlash of an inversion—not to mention the risk President Obama will call the deal ‘unpatriotic’—if you already pay no tax? It would be like going out for a big meal right after Thanksgiving Dinner. It has long been true that inversions are only one tax tool in the arsenal of big and sophisticated companies. In September 2012, the Senate Permanent Investigations Subcommittee examined Microsoft and Hewlett-Packard tax avoidance strategies. Much of it is about off-shoring. But many big U.S. companies pay no taxes or have effective tax rates of 0%. So do you need to go offshore to pay 12%? Nope, not if you can pay zero at home. Do they want less than zero, maybe a refundable credit? Take Merck, which had a negative effective tax rate during the second quarter of 7.5%. It got money back despite the fact that its income before taxes soared 52% to $1.9 billion during the quarter. Merck earns profits in countries with lower tax rates. In its regulatory filing, Merck pointed to the “beneficial impact of foreign earnings” as part of the reason for the low effective tax rate. Perhaps more importantly, Merck got a tax benefit in the quarter from an option exercise connected with rival AstraZeneca buying Merck’s interest in a partnership. Financial moves connected to the deal resulted in Merck getting a one-time tax benefit. Last year, Merck’s effective tax rate was 18%. From S&P Capital IQ & USA Today research, here are 20 companies in the S&P 500 reporting 0% (or lower) effective tax rates during the second calendar quarter of 2014: Company - Q2 2013 ($ mils) 1. Merck - $2,004 2. Seagate Tech. - $320 3. Thermo Fisher - $278.5 4. General Motors - $278 5. Public Storage - $276.8 6. Iron Mountain - $271.6 7. Newmont Mining - $1780 8. Eaton - $171 9. Avalonbay - $158.1 10. Kimco Realty - $89.5 11. Prologis - $81.2 12. Boston Properties - $79.1 13. Apartment Investment - $77 14. Plum Creek Timber - $55 15. Citrix Systems - $53 16. Crown Castle - $53 17. Macerich - $16.1 18. News Corp. - $13 19. Essex Prop. - $6.3 20. First Solar - $4.5	Click on any headline below to read more: Top Stories of August 2014 FOREIGN ACCOUNTS Dear Mr. President, Why I'm Leaving America Thinking about leaving the U.S.? Here’s one dual Canadian-U.S. family's compelling account of why a million Americans in Canada feel unfairly treated in U.S. tax filings.  Canadians File Suit To Block FATCA And Prohibit Handover Of U.S. Names To IRS FATCA, America's global tax compliance law, has ramped up worldwide and signed 80 nations to hand over American depositors. But a constitutional challenge filed in Canada may mean that Canadians are not going to take it sitting down.  Lionel Messi Tax Evasion Case (Secrecy = Willfulness) Impacts U.S. & U.K. Taxpayers Too Lionel Messi still faces a tax evasion trial, and it is all about a shell game of secrecy. Offshore bank clients in the U.S. and U.K. should pay attention, as the cover-up can be worse than the crime. 10 Signs Your Tax Missteps Are 'Willful' Triggering IRS Penalties Or Jail Tax crimes involve willful conduct, which makes sense. But you might be surprised at what the IRS can say your actions reveal about what you knew.  DISPUTES Robert Redford Sues New York Over $1.6 Million Sundance Tax Bill Robert Redford is suing New York state over taxes from selling a share in Sundance TV. Anyone who has been caught between two taxing powers should tune in.  The Real 'Fifty Shades Of Grey' Is Dealing With IRS Dealing with the IRS has more shades of grey—and more danger—than the subject of the movie. Plus, the consequences of missteps include penalties or even jail.  TAXABLE INCOME Shocking Report Says Nonprofits Owe $875 Million In Taxes To IRS A treasury report says nonprofits owe nearly $1 billion in taxes to the IRS. How come?  Who Scalps Ticket Scalpers? IRS Ticket scalping is definitively illegal. But that doesn't mean the IRS doesn't want a piece of the action.  Paying In Cash? Careful, It Can Mean Jail Cash is king. Yet the IRS can investigate, especially if you use cash to avoid income and employment taxes.  Hidden Cash Or Hidden Bitcoin Discovery Is Windfall To IRS Too If you find hidden cash or hidden Bitcoin, guess who is entitled to a big slice? Uncle Sam. ESTATE TAX New Clues In Philip Seymour Hoffman's Costly Estate Plan Philip Seymour Hoffman didn't believe in marriage. Still, would he have married to save $15 million in taxes?  IRS CONTROVERSY Despite Yearlong Investigation Of IRS, DOJ Just Learned Of Lost Emails From News Media It has been a year into a DOJ and FBI investigation of IRS targeting. Still, though, the DOJ admits it didn't know Lois Lerner's emails from 2009-2011 were "lost" until June 13, 2014 from the news media.  TAX DEDUCTIONS Supersizing Warren Buffett's $2.8 Billion Tax Deduction Buffett is generous but not foolish. His donations of stock are tax savvy, generating big deductions and avoiding taxes on sale.  HUMOR 'Teenage Mutant Ninja Turtles' Is Surprisingly All About Taxes Taxes are behind Teenage Mutant Ninja Turtles in more ways than you might think. From their birth to their longevity, taxes played a big part.
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