Clearly, this guy should get a medal for hypocrisy and shilling for the man. Do as I say, not as I do, right Warren?
Report: Buffett's Berkshire Owes $1 Billion In Back Taxes:
"Yes, that’s right: while Warren Buffett complains that the rich aren’t paying their fair share his own company has been fighting tooth and nail to avoid paying a larger share.
The story of Berkshire's years-long tax battle, which is generally known in business circles, took on new life this week when a group called Americans for Limited Government (ALG) reported that, according to Berkshire Hathaway’s own annual report, the company is embroiled in an ongoing standoff over its tax bills.
That report, in turn, was cited in an editorial in The New York Post.
“Obvious question: If Buffett really thinks he and his 'mega-rich friends' should pay higher taxes, why doesn’t his firm fork over what it already owes under current rates?” the Post opined.
“Likely answer: He cares more about shilling for President Obama -- who’s practically made socking “millionaires and billionaires” his re-election theme song -- than about kicking in more himself.”
Using only publicly-available documents, a certified public accountant (CPA) detailed Berkshire Hathaway’s tax problems to ALG. AlG President Bill Wilson cites the company’s own 2010 annual report, which states at one point that “At December 31, 2010… net unrecognized tax benefits were $1,005 million”, or about $1 billion.”
“Unrecognized tax benefits represent the company’s potential future obligation to the IRS and other taxing authorities,” ALG explained in its report. “They have to be recorded in the company’s financial statements.”
“The notation means that Berkshire Hathaway’s own auditors have probably said that $1 billion is more likely than not owed to the government,” the ALG report explained.
That $1 billion represents about 0.2 percent of the company’s $372 billion in total assets, according to ALG.
As Wilson points out, “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.”
Here's the key section from Berkshire's report:
“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 report states. "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.”
Wilson also points 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,” Wilson reports..
“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,” Wilson writes.
And Buffett this week is at the center of another tax controversy, according to The Wall Street Journal. His recent decision to invest in Bank of America "represents another tax-avoidance triumph for the Berkshire chief executive," the Journal wrote in an editorial Wednesdy.
It turns out that U.S. corporations are subject to a top federal income tax rate of 35 percent, the second highest in the world. But Berkshire won't pay anything close to that on their investment in BofA preferred shares.
"Berkshire will hold the investment in a property-casualty insurance subsidiary. Such corporations can exclude from taxation 59.5% of the dividends they receive from an investment in another corporation," the Journal reported. "This exclusion is intended to prevent double- or even triple-taxation as money is earned by one company, paid to another company and then ultimately paid out to shareholders. The policy makes sense; we only wonder why the exclusion isn't 100%.
"With the exclusion for Mr. Buffett and his fellow shareholders, Berkshire will enjoy an effective tax rate of 14.175% on the $300 million in dividends it will receive each year from Bank of America," the Journal reported.
These new revelations about Buffett's tax practices have only furthered enraged conservatives at the hypocrisy being shown by the famed "Oracle of Omaha."
Writing in the conservative website Human Events, John Hayward added that analysts should look at the "value of the time IRS agents have invested trying to collect it – they don’t work cheap, and we pay their salaries – and the resources Buffett’s people have invested fighting back. All of which would have been saved if Buffett simply practiced what he preached, and willingly handed over his fortune to the brilliant and compassionate 'leaders' he commands the rest of us to support without resistance.
"Warren Buffett is no different from the other liars and frauds orbiting Barack Obama. His hypocrisy just runs billions of dollars deeper. When it comes to 'shared sacrifice,' you do the sacrificing, and they do the sharing," Hayward writes.
Maybe it is time for corporations to step up. More likely it's going to take serious tax reform across the board to un-do the decades of chicanery and favoritism that has allowed these glaring disparities in fairness to exist and grow to such obscene levels.
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