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Entries in NRN (445)

Friday
Sep022011

NRN - Must Reads from September 1, 2011

Thursday
Sep012011

NRN - Warren Buffett's Company $1 Billion Behind In Tax Payments... 

Please consider blogging and spreading the information below from Bill Wilson, the President of Americans for Limited Government. The hypocrisy exposed by Warren Buffett is unbelievable...

From NetRightDaily.com:

Warren Buffett's Billion-Dollar Tax Hypocrisy

By Bill Wilson — Writing for the New York Times recently, Berkshire Hathaway chairman and chief executive Warren Buffett called for taxes to be increased on the so-called "super-rich," suggesting that he and his elite billionaire and millionaire friends are itching to pay more.

Buffett wrote, "Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering."

Of course, if that's the case, why doesn't Buffett's company settle its own ongoing tax disputes with the Internal Revenue Service (IRS)? As Americans for Limited Government (ALG) has reported exclusively — a story given national attention by a New York Post editorial — according to Berkshire Hathaway's own annual report, the company has been embroiled in an ongoing standoff over its tax bills.

Using only publicly-available documents, a certified public accountant (CPA) detailed Berkshire Hathaway's tax problems to ALG researcher Richard McCarty.  Now, the American people have a better idea of how much in back taxes the company could owe Uncle Sam.

According to page 56 of the company report, "At December 31, 2010… net unrecognized tax benefits were $1,005 million", or about $1 billion. McCarty explained, "Unrecognized tax benefits represent the company's potential future obligation to the IRS and other taxing authorities.  They have to be recorded in the company's financial statements."

He added, "The notation means that Berkshire Hathaway's own auditors have probably said that $1 billion is more likely than not owed to the government."

$1 billion is not an insignificant chunk of change, even for Buffett, representing about 0.2 percent of the company's $372 billion in total assets.

So, on one hand Buffett advocates for paying more taxes, but when it comes to his own company's taxes, he has gone through great lengths to pay less.  That's rich.

As the report chronicles, "We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service ('IRS') for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years."

McCarty pointed to a prior tax fight the company fought.  "Apparently, this is not the first time that Berkshire Hathaway has tangled with the IRS. They fought a 14-year battle over the dividends received deduction. That case was just resolved in 2005," McCarty said.

Although the prior case was settled in Buffett's favor, it demonstrates a decades-long pattern of behavior by Buffett to minimize his taxes.  That's the important part of the story.

In politics, you don't get to divorce your actions from your words, and if Buffett does not understand that, he ought not to step into the political arena.  It led radio host Mark Levin, commenting on Buffett's seeming tax avoidance hypocrisy, to ask, "Is Warren Buffett stupid?"

Leaving Buffett's poor political instincts aside, since he says he wants to pay more, why not just pay it? The answer is likely that Buffett's actions show that he does not actually want to pay more, he wants you to pay more.

Bill Wilson is the President of Americans for Limited Government. You can follow Bill on Twitter at @BillWilsonALG.


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Wednesday
Aug312011

NRN - Must Reads from August 30, 2011

Friday
Aug192011

NRN - Must Reads from August 18, 2011

Friday
Aug122011

NRN - Must Reads from August 11, 2011