1/ EXCLUSIVE: Bristol Myers used an allegedly 'abusive' offshore shelter to dodge more than $1 billion in US taxes: nytimes.com/2021/04/01/bus…
2/ More than 15 years ago, the IRS attacked nearly identical offshore tax shelters used by GE, Merck and Dow Chemical. Here's a story I did for the WSJ: wsj.com/articles/SB115…
3/ A legendary tax lawyer who worked on the Merck shelter quoted Al Capone: "A good lawyer with a briefcase can steal more than ten men with machine guns."
4/ Nevertheless, even as courts repeatedly sided with the IRS, Bristol Myers set up virtually the identical offshore arrangement in 2012.
5/ The tax shelter was assisted by accounting firm PWC and law firm White & Case, which each wrote lengthy opinion letters, both unusual in an important respect. Details in the story: nytimes.com/2021/04/01/bus…
6/ Years later, the IRS came across the Bristol Myers arrangement and declared it violated an anti-abuse provision in the tax code governing how partnerships shift around taxable income.
7/ I came across all of this because of a brief, accidental disclosure. Please read to the end for details.
8/ Broadly speaking, yesterday's Biden tax plan is aimed at the appeal of such offshore tax arrangements by increasing the minimum overseas tax for big companies.
9/ This dispute could easily go on for a decade and conclude with Bristol Myers paying a tiny percentage of the amount in dispute. Or none at all.
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