U.S. Treasury to Tighten Rules on Offshore Havens for Patents and Licenses

[papau]

Ever since the Bush folks in 2001 completed the close down of enforcement of IRS Code Section 482 that the GOP controlled Congress leaders pushed for starting in 1994, I have been screaming about the Corporation's getting away with single digit tax rates rather than the 35% that was in the law, all because of hiding profits overseas via Code Section 482 - transfer costs.

NOW THEY ARE GOING TO LOOK AT THEIR RULES AND SUGGEST MARKET VALUE AS IN WHAT YOU COULD SELL SOMETHING FOR IS THE CORRECT VALUE FOR patents, licenses, trademarks and other intellectual property transferred to a subsidiary from a parent company, so that the parrent could then charge itself in the US for the patents, licenses, trademarks and other intellectual property that it uses, paying paid the fees into a tax haven as it reduces its US Tax.

WERE THE CORPORATIONS LATE IN THEIR LAST BRIBE TO THE GOP? I MEAN THEY GOT THE TAX HOLIDAY THIS YEAR FOR BRINGING THOSE "OVERSEAS PROFITS" home - BUT THEN I BET THERE IS NO REAL PROBLEM THIS IS JUST A WARNING -The IRS will hold a public hearing on the regulations on Nov. 16 in Washington and these "TOUGH RULES WILL NEVER GET FINAL APPROVAL(if the next check to the GOP is recieved on time)"

http://www.bloomberg.com/news/economy/politics.html

U.S. Treasury to Tighten Rules on Offshore Havens for Patents and Licenses
Aug. 24 (Bloomberg) -- Computer and drug companies such as Microsoft Corp. and Pfizer Inc. may face a higher U.S. tax bill after the Bush administration said it would tighten rules on diverting profit to offshore tax havens.

The Treasury Department issued regulations this week limiting cost-sharing arrangements that allow companies to undervalue patents, licenses, trademarks and other intellectual property transferred to a subsidiary from a parent company. The new rules would require companies to value these assets at the same price they would charge a competitor to acquire them.

The Internal Revenue Service is increasingly questioning such transfer pricing, a legitimate business practice that can be abused when companies inflate or undervalue the price of goods sold between their international subsidiaries to reduce taxable income. Difficulties in valuing intellectual property have led to tussles between the IRS and companies, experts said.

The rule change was ``undertaken out of concern that existing regulations were outdated and that companies were using arrangements under the old regulations to strip income out of the U.S.,'' said Pamela Olson, former assistant secretary of tax policy at the Treasury Department and now a partner at the Skadden, Arps, Slate, Meagher & Flom law firm in Washington.
<snip>

[don954]

1. wow.. if this passed, it would be the single good act by Bush & Co.

[papau]

2. Don't hold your breath - hearings, rewrites, and all the while no

Code Section 482 enforcement - until a Dem is President - is the likely result.

I really do think that this is just a Rove shot across the bow of those corporations that are drifting away from the hard right GOP.

[Robert Oak]

3. WOW, outright theft

Thx Papau for bring this to my attention,.

[Robert Oak]

4. correct link

http://quote.bloomberg.com/apps/news?pid=10000103&sid=alG4UFNucA6g&refer=news_index

The link in Papau's post now gives an article on military base closings.