The 10-page overview of tax principles and law in the middle -- a history of how a program to block the use of offshore tax havens begun by President Kennedy was riddled with loopholes introduced by Congress -- is almost impenetrable.
Yet you need to wrap your mind around how Subpart F of the U.S. Tax Code was undermined by the so-called check-the-box and look-through rules in order to understand how Apple, by the subcommittee's calculations, was able to legally avoid paying U.S. taxes on $44 billion of income over a four-year period.
In one two-year span, according to the report, Apple was able to make $35 billion in income disappear through the check-the-box loophole and avoid paying $12.5 billion in U.S. taxes, or $17 million a day. The trick, as illustrated by the chart above, was to have billions in profits and dividends from overseas operations made payable to Apple Operations International, Apple's Irish subsidiary that by the company's own description is, for tax purposes, resident neither in the U.S. nor in Ireland.
Apple CEO Tim Cook and two of his fellow executives -- CFO Peter Oppenheimer and Phillip Bullock, head of Apple's tax operations -- could face some tough questions today when they appear before the subcommittee. The hearings are scheduled to begin at 9:30 a.m. ET in Room 1o6 of the Dirkson Senate Office Building. The Apple guys are in the second of three panels, so the precise timing of their testimony is unclear.
C-Span is planning to cover the hearings gavel to gavel. I expect the cable networks will be dipping in and out as well.
Should be an interesting day.
Unable to fill U.S. orders, it will make the device unavailable in 25 more countries on Friday
Last week, for reasons I'd rather not examine too closely, I spent the better part of an hour waiting outside an Apple retail outlet in center city Philadelphia only to be told, 50 minutes before the store was scheduled to open, that its promised overnight shipment of iPad 2s had not arrived.
It was an MOREPhilip Elmer-DeWitt - Mar 22, 2011 1:41 PM ET
You don't need a translator to follow Friday's 17-country launch of the iPhone 4
One of best things about the movie Babies -- a documentary look at the first year of life in four very different countries -- is that you know what the parents are saying to their children even if you don't understand a word.
It's the same these days with the overseas launches of new Apple (AAPL) products. See MOREPhilip Elmer-DeWitt - Jul 30, 2010 12:38 PM ET
Judging by press reports and YouTube videos, the grand opening of Ireland's first Apple Store was like any other -- except with an Irish accent.
The faithful queued up by the hundreds and waited for hours, fortified by coffee and biscuits. Staffers in orange, black and blue whooped and hollered up and down the line. And when the doors finally opened at 9 a.m. on the upper ground floor of Belfast's MOREPhilip Elmer-DeWitt - Sep 21, 2008 6:21 AM ET
The iPhone has been very good to O2 in the U.K.
Apple's (AAPL) British-accented partner reported yesterday that the iPhone has become its fastest selling device, helping the U.K. division of Telefonica (TEF) achieve its strongest quarter on record. Sales were up 9.5 percent in the last quarter of 2007 -- the first to show the effects of the iPhone. O2 did not provide sales figures for the iPhone alone, but MOREPhilip Elmer-DeWitt - Feb 28, 2008 11:57 AM ET
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