bah@tippy.uucp (01/25/89)
This might be of interest to most readers of this group. From the Financial
Notes section of the Jan.16-20 edition of TWICE magazine. Quote----
"Commodore has been hit by the IRS for $74.1 million in back taxes for
overseas earnings in 1981-83. The computer maker says it will challenge
the claim, and notes that its tax credits more than cover the claim."-----
End of Quote.
Hate to think what this will do to CBM if the IRS wins this one (and they
rarely come out empty-handed).
Any comments from someone with inside knowledge of this situation?
Bob Hahn ....ihnp4!itivax!duncan!bahcmcmanis%pepper@Sun.COM (Chuck McManis) (01/27/89)
In article <12500004@tippy> bah@tippy.uucp writes: >"Commodore has been hit by the IRS for $74.1 million in back taxes for >overseas earnings in 1981-83. The computer maker says it will challenge >the claim, and notes that its tax credits more than cover the claim."----- >End of Quote. >Hate to think what this will do to CBM if the IRS wins this one (and they >rarely come out empty-handed). >Any comments from someone with inside knowledge of this situation? Well if anyone with inside knowledge of this situation did comment then the Securities and Exchange Commission would throw them in jail. See if CBM wins, their stock goes up, and if they lose it goes down a bit. If you _know_ how it will go (inside information) then you are bound by law to a) Not tell anyone, b) Neither purchase nor sell any CBM stock. That aside, as a person who follows Commodore fairly closely as both a stockholder and Amiga enthusiast. It is clearly apparent from their corporate structure that CBM is a _giant_ tax shelter. CBM takes every advantage of the tax laws that they can. Because of this the IRS is probably constantly feeling cheated out of revenue (personal supposition) and thus looking for a way to get some. My guess is that the IRS figured some interpretation CBM's laywers were using for a particular statute or paragraph in the tax code was faulty (or there may have been a recent tax court decision to support their view) and they could claim the other view and thus make them liable for back taxes. [You did notice that they picked the "C64 years" rather than the "Amiga years" in the CBM history didn't you?] So now both CBM and the IRS go to tax court and argue about their interpretations and a ruling is made and then we all find out about it. I doubt even if they "lost" they would have to pay 74 million. But only time will tell. --Chuck McManis uucp: {anywhere}!sun!cmcmanis BIX: cmcmanis ARPAnet: cmcmanis@sun.com These opinions are my own and no one elses, but you knew that didn't you.
jesup@cbmvax.UUCP (Randell Jesup) (01/27/89)
In article <12500004@tippy> bah@tippy.uucp writes: >"Commodore has been hit by the IRS for $74.1 million in back taxes for >overseas earnings in 1981-83. The computer maker says it will challenge >the claim, and notes that its tax credits more than cover the claim."----- >End of Quote. > >Hate to think what this will do to CBM if the IRS wins this one (and they >rarely come out empty-handed). Nothing really, since as it says, our tax credits more than cover the claim. (It's amusing that they filed at 11:59pm Dec 31 to beat the statute of limitations.) It would have no affect on the operation or cash flow of the company, I believe (what do I know, I'm a programmer). Don't worry. The investment community isn't (no change in stock price when this was announced.) -- Randell Jesup, Commodore Engineering {uunet|rutgers|allegra}!cbmvax!jesup
ugdill@cs.Buffalo.EDU (Peter Dill) (01/27/89)
In article <12500004@tippy> bah@tippy.uucp writes: > >This might be of interest to most readers of this group. From the Financial >Notes section of the Jan.16-20 edition of TWICE magazine. Quote---- > >"Commodore has been hit by the IRS for $74.1 million in back taxes for >overseas earnings in 1981-83. The computer maker says it will challenge >the claim, and notes that its tax credits more than cover the claim."----- >End of Quote. > >Hate to think what this will do to CBM if the IRS wins this one (and they >rarely come out empty-handed). I say mention of this in the Wall St. Journal a couple of weeks back. Appear- ently CBM claims that it is based in the Bahamas while the IRS is trying to tax it like it was in the US. Anyway the article mentioned that CBM has 128 million in tax credits from previous losses hanging around to use against any judgement , so expect Commodore's R+D budget to continue unabaited at 93 million :-). Peter Dill ugdill@sunybcs | "As a rule of course, we just ugdill@joey.cs.buffalo.edu |don't care ." v114nj32@ubvms.cc.buffalo.edu |- Logical Design of Digital | Circuits ..!{nike|watmath,alegra,decvax}!sunybcs!ugdill| C.M.Reeves --------------------------------------------------------------------------------
rminnich@super.ORG (Ronald G Minnich) (01/28/89)
In article <87117@sun.uucp> cmcmanis@sun.UUCP (Chuck McManis) writes: >figured some interpretation CBM's laywers were using for a particular >statute or paragraph in the tax code was faulty (or there may have been >a recent tax court decision to support their view) and they could claim >the other view and thus make them liable for back taxes. [You did notice >that they picked the "C64 years" rather than the "Amiga years" in the >CBM history didn't you?] So now both CBM and the IRS go to tax court well, according to a Forbes article some years ago about C= the company used to sell C64s to their Bahama-based PLC which would then import them into the US. There was some strange tax-break related to importing the machines from the Carribean, and thus the sell-resell game. Best part was that the machines, in Forbes words, "never left the warehouse in West Chester". Forbes thought C= was taking unnecessary chances with this one. "Does a billion-dollar company really need to do this?" Ah, tax laws. Ah, lawyers. ron
jbh@mibte.UUCP (James Harvey) (01/31/89)
In article <5370@super.ORG>, rminnich@super.ORG (Ronald G Minnich) writes: > In article <87117@sun.uucp> cmcmanis@sun.UUCP (Chuck McManis) writes: > >figured some interpretation CBM's laywers were using for a particular > >statute or paragraph in the tax code was faulty (or there may have been > >a recent tax court decision to support their view) and they could claim > >the other view and thus make them liable for back taxes. [You did notice > >that they picked the "C64 years" rather than the "Amiga years" in the > >CBM history didn't you?] So now both CBM and the IRS go to tax court > well, according to a Forbes article some years ago about C= > the company used to sell C64s to their Bahama-based PLC > which would then import them into the US. There was some strange > tax-break related to importing the machines from the Carribean, and > thus the sell-resell game. Best part was that the machines, in Forbes > words, "never left the warehouse in West Chester". Forbes thought > C= was taking unnecessary chances with this one. > "Does a billion-dollar company really need to do this?" > Ah, tax laws. Ah, lawyers. > ron That sounds like something Jack Tramiel would do. -- Jim Harvey | "Ask not for whom the bell Michigan Bell Telephone | tolls and you will only pay 29777 Telegraph | Station-to-Station rates." Southfield, Mich. 48034 | ulysses!gamma!mibte!jbh