U.S. Senators Claim Apple Has Avoided Paying Billions in U.S. Income Taxes Ahead of Tim Cook Testimony

A Senate subcommittee has released a 40-page memo accusing Apple of not paying billions of dollars in federal taxes through "extensive tax-avoidance strategies".

Apple CEO Tim Cook, CFO Peter Oppenheimer, and Apple's head of tax operations Phillip A. Bullock will appear in front of the U.S. Senate Permanent Subcommittee on Investigation tomorrow. The company issued a statement earlier today in a preliminary defense against the Subcommittee's accusations.

Subcommittee

The subcommittee, which previously explored tax avoidance by other multinational corporations using offshore subsidiaries, found similar practices at Apple. In addition, the subcommittee review discovered an unusual tax scheme: Apple’s claim that two key offshore companies are not tax residents of Ireland, where they are incorporated, or of the United States, where Apple executives manage and control the companies. One of those Irish subsidiaries has paid no income taxes to any national tax authority for the past five years.

"Apple wasn’t satisfied with shifting its profits to a low-tax offshore tax haven," said Sen. Levin. "Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere. We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed."

The full forty-page memorandum (PDF) goes into some detail on the company's tax strategies, and we will likely hear much more about this at tomorrow's hearing.

Note: Due to the political nature of the discussion regarding this topic, the comment thread is located in our Politics, Religion, Social Issues forum. All MacRumors forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Top Rated Comments

japanime Avatar
107 months ago
Note to senators: Do your job first. Close the loopholes that Apple and the others are LEGALLY using to their advantage. Until then, you haven't earned the right to whine and moan.
Score: 49 Votes (Like | Disagree)
hobo.hopkins Avatar
107 months ago
The investigators are still not claiming that Apple broke any laws - just that they took advantage of tax loopholes. There's an easy way to "fix" this problem: fix the tax code. Expecting companies to not take advantage of loopholes and blaming them for exploiting them is just ridiculous and doesn't actually solve anything.
Score: 39 Votes (Like | Disagree)
RBMaraman Avatar
107 months ago
Meet Apple's new CEO: Tim Crook.

Seriously, there are really two major issues here: The US tax code is in need of a serious overhaul to close loopholes and align practices, and Apple's practices need to be further investigated globally for any potential illegal activities. Yes, Apple appears to have broken no laws here, while doing an excellent job of showing how greedy, unethical and dishonest a company can be and still be loved by the consumer.

I spent almost four years working at Apple, watching as the company moved from a customer focused culture under Steve Jobs to a focus on reduction in quality, cutbacks on customer service and anyways that can be thought of to increase profits under Tim Cook.

I love my Apple products enough to voice my concerns with Apple's current leadership.
Score: 26 Votes (Like | Disagree)
roland.g Avatar
107 months ago
So Obama and the U.S government are so broke, have spent all of our tax dollars, don't like the sequester, and can't wrap their heads around the idea of cutbacks rather than increased spending, and have somehow come up with the brainchild that their easy out solution is to target the one company with the largest cash reserves in an effort to win their own Powerball. Sadly enough even if they charge Apple with tax evasion and force them to pay these "billions" they owe, they'll be broke again in no time cause all Obama wants to do is spend spend spend!!
Score: 24 Votes (Like | Disagree)
Four oF NINE Avatar
107 months ago
This corporate tax avoidance by the biggest FORTUNE 500 corporations has got to stop. Figure it out, Washington!
Score: 18 Votes (Like | Disagree)
burnside Avatar
107 months ago
We all gotta pay taxes. If Apple doesn't want to pay them to the Feds, then maybe they should setup shop next door to Foxconn and not in Cupertino.
Score: 17 Votes (Like | Disagree)

Top Stories

iOS 14 on iPhone feature emergency

Apple Releases iOS and iPadOS 14.7.1 With Fix for Touch ID Apple Watch Bug

Monday July 26, 2021 9:48 am PDT by
Apple today released iOS and iPadOS 14.7.1, minor bug fix updates that come just a week after the release of iOS 14.7, software that introduced new Apple Card features and support for the MagSafe Battery Pack. The iOS and iPadOS 14.7.1 updates can be downloaded for free and the software is available on all eligible devices over-the-air in the Settings app. To access the new software, go to...
iPad mini pro feature 2

iPad Mini 6 to Feature 8.3-Inch Display With No Home Button and Narrower Bezels

Monday July 26, 2021 12:26 pm PDT by
The sixth-generation iPad mini that's in the works will have an 8.3-inch display, according to display analyst Ross Young. That will be larger than the current 7.9-inch display, with the larger size due to the removal of the Home button and a narrower bezel design. Rumors about the iPad mini 6 have been picking up in recent weeks ahead of its prospective launch this fall. Apple analyst...
iphone 12 pro gold

Report: iPhone 14 Pro Models to Feature Tough Titanium Alloy Chassis

Monday July 26, 2021 1:12 am PDT by
Next year's "iPhone 14" series is expected to feature high-end models with a new titanium alloy chassis design, claims a new investors report by JP Morgan Chase. According to the report, the use of titanium alloy will be one of the biggest changes to the case design in the 2022 iPhone series, and Foxconn will be the exclusive manufacturer of the titanium frames for the high-end models....
nothing ear 1 buds 1

Nothing 'Ear (1)' True Wireless Earbuds Launch to Take on AirPods Pro With ANC and Unusual Design for $99

Tuesday July 27, 2021 7:57 am PDT by
Nothing, a new brand from OnePlus founder Carl Pei, has today officially launched the "Ear (1)" true wireless earbuds after months of anticipation around the company's AirPods Pro rival. The Ear (1) features an in-ear design, Active Noise Cancelation, Bluetooth 5.2, IPX4 water resistance, and a charging case with Qi-compatible wireless charging and a USB-C port. Fast pairing is supported on...
apple mac business page

Apple Shares 11 Reasons Why Business Users Should Choose Macs

Monday July 26, 2021 11:35 am PDT by
Apple today updated its Apple at Work website with a new section dedicated to the Mac, which offers up 11 reasons why "Mac means business." On the webpage, Apple highlights the M1 chip as the number one reason why business users should choose a Mac, offering up an M1 overview [PDF] that explains the benefits of the M1 chip. The information isn't new, but it does provide a look at all of...
imac with accessories

Larger Redesigned High-End iMac Rumored to Launch Next Year

Monday July 26, 2021 3:45 am PDT by
Apple's larger redesigned iMac will arrive sometime in 2022 rather than later this year, according to the leaker known as "Dylandkt." On Twitter, Dylandkt claimed that Apple's "high end iMac" is not expected to release in the fourth quarter of 2021 alongside Apple's "M1X Macs" – a reference to Apple's redesigned MacBook Pro models – because "Apple simply does not want their devices to...
General iOS 14

iOS 14.7.1 and macOS Big Sur 11.5.1 Patch Security Vulnerability That May Have Been Actively Exploited

Monday July 26, 2021 11:55 am PDT by
Apple today released unexpected iOS 14.7.1 and iPadOS 14.7.1 updates to the public, and according to a newly released support document, the software addresses a serious security vulnerability that may have been exploited in the wild. Apple says that an application may have been able to execute arbitrary code with kernel privileges due to a memory corruption issue. "Apple is aware of a report ...
apple bitcoin hack

Is Apple Really Buying Bitcoin?

Monday July 26, 2021 3:07 am PDT by
A large number of websites and posts on social media are stoking rumors that Apple has purchased $2.5 billion worth of bitcoin in the company's first move into cryptocurrency, but is there any validity to the claims? Many people are citing the fact that Apple was looking for a Business Development Manager with experience in alternative payments, including cryptocurrency, earlier this year as ...
tesla red orange bg feature

Tesla CEO Elon Musk Takes Shots at Apple During Earnings Call

Monday July 26, 2021 4:53 pm PDT by
During a Tesla earnings call that took place today, Tesla CEO Elon Musk spent time sniping at Apple, reports CNBC. Musk criticized Apple's "walled garden" and made comments on the company's cobalt use. In a discussion about plans to allow Tesla competitors to use the Tesla electric vehicle charger network, Musk said that Tesla does not want to create a walled garden to "bludgeon" Tesla...
FaceID iMac REREREREMIX

Gurman: Face ID on the Mac Coming Within a 'Couple of Years'

Sunday July 25, 2021 7:09 am PDT by
Apple plans to bring Face ID to the Mac within the next "couple of years," respected Bloomberg journalist Mark Gurman said today in the latest edition of his Power On newsletter. In the newsletter, Gurman says that he believes Apple's ultimate goal is to shift all of its products to Face ID, including the lower-end iPhones such as the iPhone SE and the iPad Air, which feature Touch ID....