AAPL Stock: 118.03 ( -0.85 )

Printed from

HP loses battle over $190m IRS bill for shady tax dealings

updated 02:02 pm EDT, Tue May 15, 2012

Company fails to convince court of innocence

A US Tax Court judge has ruled against HP in a lengthy legal case that centers around $190 million in tax payouts to the Internal Revenue Service. The agency years ago disputed the company's tax returns, accusing the company of exaggerating deductions through a complex series of international investments, known as foreign tax credit generation, to slash tax payouts in the US.

The scheme was said to utilize a Dutch tax shelter, known as Foppingadreef, that was engineered by a division of American International Group and financed by a number of European banks, according to a Reuters report. HP allegedly used derivative trades to inflate its capital losses and bolster foreign tax credits.

Judge Joseph Goeke ruled that HP's investment in the tax shelter "is more appropriately characterized as debt, rather than equity, for Federal income tax purposes."

After selling its stake in Foppingadreef, HP posted a $15.5 million capital loss and claimed $178 million in savings from foreign tax credits. The court found that both deductions are not allowed, and the company is not entitled to receive a refund for its payments.

by MacNN Staff




Login Here

Not a member of the MacNN forums? Register now for free.


Network Headlines

Follow us on Facebook


Most Popular


Recent Reviews

Ultimate Ears Megaboom Bluetooth Speaker

Ultimate Ears (now owned by Logitech) has found great success in the marketplace with its "Boom" series of Bluetooth speakers, a mod ...

Kinivo URBN Premium Bluetooth Headphones

We love music, and we're willing to bet that you do, too. If you're like us, you probably spend a good portion of your time wearing ...

Jamstik+ MIDI Controller

For a long time the MIDI world has been dominated by keyboard-inspired controllers. Times are changing however, and we are slowly star ...


Most Commented