Group urges IRS action against drug company
The liberal group Americans for Tax Fairness (ATF) is urging the Treasury Department and Internal Revenue Service (IRS) to take action against drug company Gilead Sciences because it has allegedly been shifting income offshore to avoid taxes.
“We urge the administration to bring the full force of your enforcement capabilities against Gilead to collect the tax dollars that rightfully belong to the American people,” ATF said Wednesday in a letter to Treasury Secretary Jack Lew and IRS Commissioner John Koskinen.
ATF issued a report last month that found Gilead’s untaxed offshore profits have increased in recent years even though most of its revenue has been generated in the United States.
“A particularly troubling fact is that Gilead’s purported offshore profits increased dramatically at the same time its U.S. sales revenues skyrocketed but its U.S. profits inexplicably dropped, suggesting Gilead may be improperly shifting a significant portion of its U.S. profits offshore to dodge U.S. taxes,” the group said.
ATF said it appreciated that the Obama administration is going after Facebook for apparently aggressively using transfer pricing to move profits overseas and said Gilead is engaging in “a similar highly aggressive use of transfer pricing.”
The group urged Treasury and the IRS to take action against Gilead before the European Commission (EC) acts and tries to get the company to pay taxes on the offshore income to Ireland.
“Instead of allowing massive profit shifting by an American company and then pleading with EC officials not to pursue collection of unpaid taxes to Ireland, ATF urges the United States to bring its full enforcement resources to bear to immediately investigate Gilead’s profit-shifting tactics so that the correct amount of income is reported—and the correct amount of taxes are paid— here in the first place,” ATF said.
The group also urged the administration to work with Congress to end the ability of American companies to defer U.S. taxes on their foreign earnings.
A Gilead spokesperson said the company currently has no comment on the letter.
– updated at 12:59 p.m.
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