The IRS Is Taking A Hard Look at Google’s Offshore Activities
As discussed in this article writtenby Jesse Druckerat Bloomberg, our internet overlords at Google have found themselves the subject of anIRS audit. It seems theService is heavily scrutinizing the web giant’s offshore activities, particularlythe manner in which Googlevalues software rights and other intellectual property it licenses to its foreign subsidiaries, as well as the transfer-pricing agreements between those same foreign subsidiaries and Google’s domestic operations.
Google has long taken advantage of the relative ease of transferabilityof many of its key patents and copyrights, moving these income-producingassets to tax havens, thereby shiftingmuch ofthe corresponding earningsaway from the U.S. and intofavorablejurisdictions. According to the article, Google has shaved nearly $1 billion per year off its worldwide tax bill by usingstrategies called the “Double Irish” and “Dutch Sandwich,” which, according toa quick search of Urbandictionary.com, are not nearly as perverted as they sound.
