Companies Find Loopholes For Oversea Deposits
Many large firms hold large amounts of money overseas, and although this money is held overseas some of these companies are making usage of that money in the United States. Several companies have been finding loopholes in the IRS and have been legally borrowing money using their oversea assets to buy back their own stocks or to run daily company activities. The money being taken out is short term, so the laws binding the money are different than those for long term. With even more loopholes companies do not have to pay taxes on this money, and as more companies are depositing their money oversees such practices become more common. Companies that do this do not need to disclose this information, thus the public is not aware of how many companies use such tactics.
It is difficult for the IRS to close all possible loopholes, as our country advances more methods are being exploited to decrease cost and increase profit of companies. Although it may be very difficult to close all loopholes the IRS should try its best to close loopholes that they know exist, especially if the loopholes are used in an unfair manner by large corporations.
Written by: Jessica Ho
Source: The Wall Street Journal
Linebaugh, Kate. (2013) How Firms Tap Overseas Cash. The Wall Street Journal. Retrieved from: http://online.wsj.com/article/SB10001424127887323361804578388522312624686.html?mod=WSJ_business_whatsNews