Legislative Update: Investigations subcommittee examines multinationals’ use of offshore entities 

September 20:   The Senate permanent investigations subcommittee today released documents related to a hearing examining U.S.-based multinationals’ shifting of profits offshore through provisions of the Internal Revenue Code and accounting rules.

Subcommittee Chairman Carl Levin (D-MI) called witnesses from the IRS, Financial Accounting Standards Board, multinational corporations, and an accounting firm.


Levin and ranking Republican Tom Coburn (OK) released an 81-page document of the subcommittee’s investigation. They wrote:


Current weaknesses in the tax code’s transfer pricing regulations, Subpart F, and Section 956, and in [FASB’s] accounting standard APB 23 relating to deferred tax liabilities on permanently or indefinitely invested foreign earnings, encourage and facilitate the shifting of intellectual property and profits offshore by multinational corporations headquartered in the United States.

The subcommittee posted text and other documents and testimony on its website.




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©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

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