Thursday, April 5, 2018
Bloomberg, Tax Law Quirk Could Help Apple and Microsoft Lower Their Bills:
The Internal Revenue Service is providing some relief for companies facing looming tax bills after they stockpiled trillions of dollars offshore free of U.S. income tax.
A timing quirk in the tax overhaul seemed to give companies such as Apple, Microsoft and Cisco — all of which began their fiscal years before Jan. 1 — the chance to reduce the foreign cash they’ll accumulate this year and lower their taxes. A press release issued by the IRS on Monday indicates that “if done in the ordinary course of business,” the move won’t be considered as tax avoidance, according to Stephen Shay, a tax and business law professor at Harvard Law School.
“The light is green for this planning, not red,” said Shay, a former top Treasury official. “It is great for those whose years beginning before 2018 are still open for the planning.”
While companies taking steps to shift their assets would still owe repatriation taxes, they wouldn’t have as much cash taxed at the higher rate -- "a major concession" by the IRS, said independent tax and accounting expert Robert Willens.