Thursday, October 13, 2011

Warren Buffet might owe billions in taxes

Story from Which states in past years, Buffet sometimes have billions in Unrecognized Tax Benefits. Just to make sure I didn't get it backwards, I did some research, and here is one from
Tax planning strategies that reduce tax liabilities on tax returns generate “tax benefits,” which may or may not be recognized in financial statements. When a firm recognizes a tax benefit on a tax return and records an offsetting liability in the financial statements to account for the contingent liability associated with that tax position, we refer to the tax benefit as being “unrecognized.” The liability for unrecognized tax benefits is also commonly referred to by tax practitioners as the tax contingency or the tax cushion.
So there you go, Buffet, who claims he didn't pay enough tax (and want to pay more), have taken tax benefits that his firm think IRS might not allow. And that is what we call a hypocrite.

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