For those who say publicity does not work….Google is under tax investigation

Posted on

Some like to say no tax campaigning works.

I know that's not true. Real change is happening. But for those in doubt, some long term readers of this blog will know that I have been involved in the tax investigations of Google that have no made that company a notorious tax dodger since their outset. And now Jesse Drucker at Bloomberg (a great journalist with whom I have worked on this issue) reports:

The U.S. Internal Revenue Service is auditing how Google Inc. avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.

The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad, said the person, who requested anonymity because the audit isn’t public. The IRS has requested information from Google about its offshore deals after three acquisitions, including its $1.65 billion purchase of YouTube, the person said. The transfer overseas of these kinds of rights rights has enabled Google to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago.

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.

Campaigning doesn't just work. It has the power to hurt pockets. And that's why so many say it doesn't work. They're paid to deflect attention from the fact it's working, very well.