Sweethearts Candy Blog's

Outgoing:  PriceWaterhouseCoopers

Incoming:  the New Tax Preparation Team

THIS JUST IN.  Bank of America, feeling the intense pressure put upon them by 20 adolescent protesters in San Francisco on April 15, have decided to capitulate to activist demands.  The protesters, from a massive organization called "US Uncut," have demanded that the bank pay income taxes even if it does not owe any.

US Uncut has pointed out that corporations need to pay taxes, lots and lots of taxes, all the time, regardless of what their Big Four CPA firms may tell them.  These taxes are needed so the lazy and unproductive can live at the high lifestyle they feel they deserve for merely taking up space and producing nothing of value.

Bank of America's New Tax Manager  Arrives for Work

Bank of America executives rapidly performed an internal investigation and found the problem:  their accounting firm, PriceWaterhouseCoopers was preparing their corporate tax returns in such a way as to comply with state and federal tax laws.  Obviously, too many MBAs and Masters in Taxation can spoil the broth.  Tax returns should not be prepared in accordance with bourgeois rules and laws, but in alignment with feelings, to meld with Aquarius rising, inspire harmonic convergence, manifest good karmic reverberations and above all, to pay lots of free and unearned moola to hippies and their modern equivalent, Democrats.

Effective immediately, PriceWaterhouseCoopers has been given their walking papers and a team of hippies has been hired to file amended corporate tax returns.  Trembling in fear, corporate executives everywhere are hoping this extreme measure will spare them the withering financial analysis and public condemnation that 20 left-wing sociology undergraduates can bring, in what can only be called a public relations disaster for the corporate banking giant.

Confronting Liberal Dogma

The Daily Kos, Moveon, the Democratic Underground, the Coffee Party and US Uncut want Bank of America and other corporations to pay income taxes that they don't legally owe.

The lefties are targeting various corporations as "tax dodgers" even though these corporations have complied with the tax laws and owe no tax.  How can you "dodge" a non-existent tax bill?

Aha, there's the error in your thinking, friend.  It shouldn't be Congress, the IRS or the states that decide a corporation's tax liability.  It should be left-wing college sophomores, old hippie burn-outs, Marxists and morons.  Well then, I have some questions for these Saul Alinsky wanna-bes.

1.  If one fills out Form 1120 and completes the required calculations and owes no tax, then what do you do?  What tax form does the corporate tax payer use to compute the non-owed tax, if not the one dictated by tax laws?  Has one been invented?

2. If the corporation legally owes no tax, how much should the extra-legal, non-owed taxes be?  Who decides how much?  Is there a formula, say, divide the corporation's Tax I.D. number by Saul Alinsky's I.Q., add Al Gore's address and multiply by Noam Chomsky's license plate?

3. Since the IRS or the states aren't owed the money, to whom are these extra-legal taxes to be paid?  To you personally?  To your organization?  To the Communist Party?

4.  Do you really thing it's a good idea to have uninformed political agitators deciding tax laws and usurping Congress?  What makes you think you are qualified to do so?  Why do you think you have any right to do so?

5. Do you think the fabric of hard reality can be altered by exhibitionism, i.e. dancing around like fools in the lobby of Bank of America in San Francisco, demanding taxes that are not owed?

I'd really like to know.

Update:  I found this Moveon.org video of leftists making asses of themselves at a Bank of America branch.  (Hat tip Legal Insurrection.)  Perhaps those scruffy little Marxists would deign to answer the questions I posed above?

Using Google, I found Bank of America's annual report on the internet.  Sure enough, it shows that US Uncut, the Daily KOS and Democratic Underground are all refuges for ignoramuses.  So much of their beliefs and philosophy is based on profound ignorance and error, so it should come as no surprise that they are equally ignorant and uninformed about corporate income taxes.

Bank of America actually LOST $2.2 billion in 2010, yet still reported $915 billion in income taxes.  Probably effecting this is a paper write-off of $12.4 billion in good will impairment, which is not deductible for taxes.  They reported a tax benefit (a theoretical refund) for 2009, but did report substantial amounts of tax expense for 2006, 2007 and 2008.  See the annual report here.  You will have to scroll through the report since it is a pdf file.

Reading a highly condensed and consolidated financial report cannot provide you with an in-depth understanding of B of A's tax situation.  For one thing, taxes reported for financial statements can differ considerably from what is reported on the tax return.  The reason is that financial reporting for taxes is often highly theoretical.  The financial statements attempt to present the income tax expense based on GAAP (generally accepted accounting principles), and include timing differences between financial reporting and tax reporting.  For example, accelerated depreciation methods for machinery and equipment may be used for tax reporting, but straight line depreciation for financial reporting.  This results in "deferred" taxes, taxes that may not yet be due on the tax return.

Once again, to really understand what a corporation paid in taxes for any given year, you need the corporate tax return.

In any case, there is nothing in the annual report of Bank of America that implies that this corporation "pays no taxes."

Conclusions:  Leftists sources are full of bovine excrement regarding "corporations not paying taxes."  Their claims are anecdotal, general and offer no support or specifics.  For that reason, they can be discounted in their entirety.

Paying No Taxes and Loving It: Nyaah, nyaah, niyaah!  Feel the burn, libbies!  Har har har!

Zombie has an interesting presentation of the Tax Day protests in San Francisco.  Another phony left wing "populist uprising" is a group called US Uncut, who invaded a branch of Bank of America to put on a highly scripted song-and-dance demonstration.  Their message to B of A:  pay your taxes, because B of A doesn't pay any corporate taxes, they are tax dodgers, etc, etc.

The ignorant left often uses arguments that so-and-so corporation made 75 gazillion dollars in profits and yet paid no income taxes!!  Omigod, think of the free goodies those taxes would have bought for losers like us!  (Well the last sentence is implied if not expressly stated.)

Now I am a tax professional, but I don't know everything.  However, it seems to me that these claims against corporations are born of ignorance and hyperbole.  Corporations are heavily and regularly scrutinized by the SEC, the IRS and their outside auditors.  If these corporations were breaking the law regarding payment of taxes, they would soon be found out.

But let's say Bank of America and other corporations are not paying any taxes this year.  What would be some of the reasons?  Here are a few possibilities:

1.  Their "billions in profits" are actually their gross sales, not their net income.  Gross sales is not "profits."  Profit is what is left over after paying expenses, including salaries and taxes.  In all probability, ignorant leftists don't know the difference, couldn't count to five if they owned a Cray computer and as we all know, can't find their ass with both hands.

2.  The non-tax paying corporations actually have losses, not profits.  That means their expenses exceeded their income.  Corporations pay taxes on net profit (Sales minus cost of goods sold minus operating expenses = net profit).  In this lousy, Democrat produced economy, it is almost certain that many corporations are experiencing losses (which probably explains their massive layoffs of employees).  Again, refer to my comment above about liberals finding their asses with both hands.

3.  Corporations made a profit this year, but have accumulated losses from prior years.  Tax laws allow corporations to carry forward their prior year losses, and they may wipe out the current year profits and not owe any taxes because of it.

4.  Corporations have tax credits to offset their taxes.  Corporations get a credit for foreign taxes that they pay, so they are not taxed twice on the same income.

5.  Corporations file consolidated tax returns, that is, one tax return for the parent corporation and all of its subsidiaries.  Just because one of the corporations in a controlled group is profitable does not mean that all corporations in the same group are.  The losses of some of the corporations in the consolidation may be enough to offset the profits in others.  Moronic liberals may be focusing on only the profitable corporation while ignoring the unprofitable ones.

There is only one way to know the true story of whether Bank of America or any other corporation is not paying taxes, and that is to examine their tax return.  They generally file their taxes on Form 1120.  If anyone has a copy of Bank of America's tax return, I will be happy to take a look at it and see if I can explain it.  Warning:  it is likely to be quite thick.

Meanwhile, don't believe any hyperbole from ignorant liberals.  Even if they owned a Cray computer, they probably wouldn't even know how to plug it in.