Warren Buffett’s Berkshire Hathaway, the most expensive stock purchase on the planet (December 2010), owes a tidy sum in back taxes. The company has been disputing their owed taxes since 2002, going all the way through 2009. Hilarious that a “government lawyer” alerted Richard McCarty at Americans for Limited Government of Buffett’s reluctance to pay up – which could mean a liability of tens of millions of dollars. Buffett has the money you and I do not have to delay, and to continue court battles, costing taxpayers millions as well, and he has been doing exactly that.
According to Bill Wilson at Americans for Limited Government, Berkshire Hathaway’s own company financial report says their own auditors intimate the company may owe as much as $1 Billion in back taxes.
Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”
Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.
McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004. The IRS examination team caught Berkshire Hathaway on at least some issues. Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”
He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to. Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is again threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”
McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years. One would expect they will find yet more issues.”
I’m not one to defend the IRS, but if Buffett’s delay tactics have been going on since 2002, it’s time someone win this battle. By the time Buffett pays up, millions will have been spent by the taxpayer to defend the IRS position.
Buffett likes “shared sacrifice,” especially when it is your shared sacrifice, not his. He supported Obama’s $787 Billion stimulus, said it should have been more and was “like half a viagra tablet mixed with candy.” He has never spoken about the abuse and misuse of those Stimulus Billions, knowing his own businesses could not survive with Barack Obama at the helm.
He wants taxes raised on the wealthy, saying his secretary pays more in taxes than he does. That sounds appalling until you understand how Buffett pays his taxes – how he uses every tax code advantage available to him. That’s as it should be, but Buffett fails to mention his accountant’s secrets and knows you and I would never figure it out:
For many years now Buffett has pointed out that he pays less tax than his secretary. How could the country’s most well-known billionaire, worth $50 billion, get away with that?
Here’s the significant reason — one that Buffett omits from his Op-Ed: He has traditionally drawn a tiny salary from his company Berkshire Hathaway and gives no dividends to shareholders like himself.
So, even if Buffett raised income tax rates on the wealthy, he might not pay significantly more in taxes. By keeping his wealth in his company, Buffett has discovered one of the best tax avoidance schemes ever invented. And Buffett never suggests that corporate loopholes that he’s personally taken advantage of for decades should be closed.
Buffett likes “shared sacrifice,” especially when it is your shared sacrifice, not his. He supported Obama’s $787 Billion stimulus, and said it should have been more. He has never spoken about the abuse and misuse of those Stimulus Billions, knowing his own businesses could not survive with Barack Obama at the helm.
On Buffett’s calendar is a fundraiser for the president. His BRK.A shares sold for a $120,000/share in December 2010. Closed at $104,000 yesterday.
Friends, this is nowhere in the mainstream media. Doing a search, I see only blogs and online magazines talking about Warren Buffett’s back taxes. An MSNBC headline tells us “Wealthy Europeans back Warren Buffett’s call for higher taxes,” but nothing on Buffett not paying up. I’ve found nothing in the New York Times, or the Washington Post.