The IRS is auditing how Google avoided federal income taxes by shifting profits into offshore subsidiaries, which has allowed it to cut its tax liability by over $1 billion. In the second quarter, Google's effective tax rate was 18.8%, less than half the average combined U.S. and state statutory rate of 39.2%.
See "Google Faces IRS Audit Over Shfting (sic) Profits to Offshore Subs," TaxProf Blog (October 13, 2011).
By Derek Young, Associate Editor, Wealth Strategies Journal
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