AIG IS NOW SUING THE U.S. OVER TAXES, INTEREST AND PENALTIES…

Posted on March 2, 2009. Filed under: News And Politics... |

 
This is what happens when you give to those who are undeserving.  Talk about biting the hand that feeds you…
 
AIG is suing the U.S. in a dispute over $306 million in taxes, interest and penalties.  Obama better get "Nobody Messes With Joe" Biden on this case.  AIG is defended their suit to the WSJ: “AIG is taking this action to ensure that it is not required to pay more than its fair share of taxes,” said a company spokeswoman. An IRS spokesman declined to comment.
 

AIG (or, more appropriately, PIG) wants to "ensure they don’t have to pay more than ‘their fair share’ "?  You have got to be kidding me!  They have taken more than their fair share from us.  The government saved them from bankruptcy and this is how we’re paid back.  They’ve been taking billions from us with no consequences whatsoever.  It should be us, the tax payers, that should have received this money!  OK, I think I’ve had enough.  When is the rest of America going to follow suit?

QueenBee

March 2, 2009, 8:49 am

Additional $30 Billion Doesn’t Stop AIG From Suing U.S.

Posted by Jesse Drucker and Liam Pleven – Wall Street Journal

In the midst of its negotiation with the federal government over revised terms of its bailout, American International Group Inc. sued the U.S. on Friday over a disputed $306 million in taxes, interest and penalties.

The suit steps up a battle with the Internal Revenue Service largely over AIG’s use of a controversial type of "tax arbitrage" transaction that authorities are challenging across the world.

With the company essentially suing its owner, the suit highlights the awkwardness of national control of AIG, which the government rescued from potential bankruptcy in September. If through litigation "you’re moving money from one pocket to another, why should we be paying lawyers to do that?" says David Weisbach, a tax law professor at the University of Chicago.

"AIG is taking this action to ensure that it is not required to pay more than its fair share of taxes," said a company spokeswoman. An IRS spokesman declined to comment.

In its lawsuit, filed in U.S. District Court in Manhattan, AIG for the first time laid out significant details about its role in the so-called "foreign tax generators" in dispute with the IRS. The general nature of the disagreement was previously disclosed in company securities filings and reported by The Wall Street Journal in May.

The foreign tax credit transactions detailed in the lawsuit took place in 1997, but AIG said in a securities filing that it also expects the IRS to challenge similar deals from more-recent years. The company paid the amounts in dispute and is now suing for a refund.

In a typical transaction, an AIG subsidiary would borrow money at favorable interest rates from an overseas bank and also earn investment income. It would pay foreign taxes and earn a foreign tax credit in the U.S. for those foreign taxes. Simultaneously, the subsidiary would pay dividends to the foreign bank that lent it the money. The foreign tax laws generally exempted those dividends from taxation to the foreign bank.

Tax authorities are concerned that the arbitrage of the two sets of tax laws allows companies to essentially double-dip, taking two tax benefits in two different countries simultaneously.

 

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