Apple’s skilled accounting team may have saved the company billions of dollars in taxes by hiding $44 billion of its enormous profits between 2009 and 2012, according to a new report by Senate investigators, following a probe backed by Sen. John McCain.
Apple CEO Tim Cook made his first appearance to testify on Capitol Hill on March 21 to answer allegations that the company developed a complex system for the purpose of sheltering billions of dollars in international profits from the IRS and international tax collectors.
Apple denies dodging U.S. taxes, and in fact, the investigators don’t say it has actually broken any laws. Nonetheless, the bipartisan panel of Senate investigators scolded Apple for taking advantage of offshore tax loopholes and increasing the tax burden of American citizens.
There has been much controversy surrounding Apple’s accounting tactics and this isn’t the first time the company has been accused of dodging taxes. In 2012, The New York Times reported on Apple’s elaborate system of hanging on to its profits while escaping taxes. The company has $100 billion stashed in Ireland, where it has negotiated a low corporate income tax rate with the government. However, to bring money back into the U.S. from Ireland would cost 35 percent in U.S. taxes. Thus, Apple’s decision to sell $17 billion in bonds and buy back stock makes sense.
Investigators found that since Apple is able to operate within the law and still make out like a bandit by taking advantage of multiple tax loopholes, tax laws must be reformed. But for now, Apple may continue to operate one step ahead of the law and reap the benefits — possibly even becoming the first trillion dollar company in the world before tax laws catch up with it.