Printed from http://www.electronista.com

HP loses battle over $190m IRS bill for shady tax dealings

updated 02:02 pm EDT, Tue May 15, 2012

Company fails to convince court of innocence

A US Tax Court judge has ruled against HP in a lengthy legal case that centers around $190 million in tax payouts to the Internal Revenue Service. The agency years ago disputed the company's tax returns, accusing the company of exaggerating deductions through a complex series of international investments, known as foreign tax credit generation, to slash tax payouts in the US.

The scheme was said to utilize a Dutch tax shelter, known as Foppingadreef, that was engineered by a division of American International Group and financed by a number of European banks, according to a Reuters report. HP allegedly used derivative trades to inflate its capital losses and bolster foreign tax credits.

Judge Joseph Goeke ruled that HP's investment in the tax shelter "is more appropriately characterized as debt, rather than equity, for Federal income tax purposes."

After selling its stake in Foppingadreef, HP posted a $15.5 million capital loss and claimed $178 million in savings from foreign tax credits. The court found that both deductions are not allowed, and the company is not entitled to receive a refund for its payments.



By Electronista Staff
Post tools:

TAGS :

toggle

Comments

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

toggle

Most Popular

Sponsor

Recent Reviews

ActvContent Sync Smartband

Smartbands of all sorts are hitting the market. Some build on the buzz around fitness trackers, while others offer simpler features fo ...

RocketStor 6324L Thunderbolt 2 eSATA bridge

Like it or not, the shift to Thunderbolt is underway. The connection is extremely flexible, allowing for video and data to co-habitate ...

Patriot Stellar Boost XT 64GB USB 3.0 drive

A vast selection of USB memory sticks means that consumers can often find exactly the size drive they need in a configuration that can ...

Sponsor

toggle

Most Commented

 
toggle

Popular News