Tax attorney Rob Wood discusses his Forbes article “If An Individual Pulled The Tax Gimmicks Of Apple And Other Big Companies, They'd Go To Jail” that points out the tax breaks given to corporations by America’s tax code. Using tax breaks available to corporations, a mere 30 companies have $1.2 trillion squirrelled away in offshore tax havens.
The rules for individuals and companies are different, Wood explains, and a number of large companies are taking advantage of “offshore gimmicks” to amass large amounts of money in offshore accounts. Individuals are not allowed to do this; individuals are required to declare offshore funds on income tax returns.
Tim Cook, Apple CEO, testified before Congress that large companies need to take advantage of these tax breaks in order to be competitive. But, as Wood points out, these breaks are not available to individuals, even those who use closely held corporations. Income attribution rules make these breaks unavailable except to publicly held corporations. Unless Congress changes the rules, that’s how things will remain.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.