Over the weekend, I aired some grievances that I've had with The New York Times and its tax shaming. One commenter on the thread mentioned a Times article on AIG from a few months back that exposed that companies tax dodgy ways. I had a chance to dig it up today, but it's worth noting that article was written by DealBook's Andrew Ross Sorkin and it was published a week after AIG reported over $19 billion in profit for the 4th quarter. A phony profit that ARS sniffed out right away:
[I]f you dug into the numbers, it quickly became clear that $17.7 billion of that profit was pure fantasy — a tax benefit, er, gift, from the United States government. The company made only $1.6 billion during the quarter from actual operations. Yet A.I.G. not only received a tax benefit, it is unlikely to pay a cent of taxes this year, nor by some estimates, for at least a decade. The tax benefit is notable for more than simply its size. It is the result of a rule that the Treasury unilaterally bent for A.I.G. and several other hobbled companies in 2008 that has largely been overlooked. This rule-twisting could deprive the government of tens of billions of dollars, assuming the firm remains profitable. The tax dodge — and let’s be honest, that’s what it is — also will most likely help goose the bonuses of A.I.G.’s employees, some of whom helped create many of the problems that led to its role in the financial crisis.
A series of Treasury Department rulings since 2008 let GM use $18 billion in losses — from the "old GM" that was left behind in bankruptcy — to offset any profits. GM spokesman Jim Cain said the automaker pays "significant" state income taxes, but because of its prior losses doesn't incur federal tax liability. "We did not pay federal income tax last year," he said. [...] GM disclosed Thursday that its effective global tax rate for 2012 will likely be 12 percent to 13 percent, equal to the just-reported first quarter. That 2012 rate is up from a previous estimate of 10 percent. The automaker's chief financial officer, Dan Ammann, said the rate could still change "due to variations in country-specific profitability and tax liability." GM had credits totaling $16 billion at the end of 2011, which means it can offset about $48 billion in future income.