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[TheMercenary]

Buffett's Berkshire Owes $1 Billion In Back Taxes

Billionaire investor Warren Buffett triggered a major debate over taxes recently when he wrote in The New York Times that he should be paying more to the federal government. He called on Washington lawmakers to up tax rates on the rich.

But it turns out that Buffett’s own company, Berkshire Hathaway, has had every opportunity to pay more taxes over the last decade. Instead, it’s been mired in a protracted legal battle with the Internal Revenue Service over a bill that one analyst estimates may total $1 billion.

Yes, that’s right: while Warren Buffett complains that the rich aren’t paying their fair share his own company has been fighting tooth and nail to avoid paying a larger share.

The story of Berkshire's years-long tax battle, which is generally known in business circles, took on new life this week when a group called Americans for Limited Government (ALG) reported that, according to Berkshire Hathaway’s own annual report, the company is embroiled in an ongoing standoff over its tax bills.

That report, in turn, was cited in an editorial in The New York Post.

“Obvious question: If Buffett really thinks he and his 'mega-rich friends' should pay higher taxes, why doesn’t his firm fork over what it already owes under current rates?” the Post opined.

“Likely answer: He cares more about shilling for President Obama -- who’s practically made socking “millionaires and billionaires” his re-election theme song -- than about kicking in more himself.”

Using only publicly-available documents, a certified public accountant (CPA) detailed Berkshire Hathaway’s tax problems to ALG. AlG President Bill Wilson cites the company’s own 2010 annual report, which states at one point that “At December 31, 2010… net unrecognized tax benefits were $1,005 million”, or about $1 billion.”

“Unrecognized tax benefits represent the company’s potential future obligation to the IRS and other taxing authorities,” ALG explained in its report. “They have to be recorded in the company’s financial statements.”

“The notation means that Berkshire Hathaway’s own auditors have probably said that $1 billion is more likely than not owed to the government,” the ALG report explained.

That $1 billion represents about 0.2 percent of the company’s $372 billion in total assets, according to ALG.

As Wilson points out, “On one hand Buffett advocates for paying more taxes, but when it comes to his own company’s taxes, he has gone through great lengths to pay less. That’s rich.”

http://www.newsmax.com/Headline/buff...o_code=CF64-1#