Tomorrow's major tax story -- the Senate tax story, actually -- was supposed to be the IRS. The Senate Finance Committee, led by Montana's Max Baucus, is conducting the next hearing into the "targeting" of Tea Party groups that applied for tax exemptions. But now comes the Senate Committee on Investigations and its report on how Apple skirted tax law for decades.
According to figures supplied by Apple, over a four year period from 2009 to 2012, as explained further below, Apple used a number of those tax loopholes to avoid Subpart F taxation of offshore income totaling $44 billion. During that time period, Apple generated two types of offshore income that should have been immediately taxed under Subpart F: (1) foreign base company sales (FBCS) income, which involves the sales income Apple directed to Ireland for no reason other than to concentrate profits there, and (2) foreign personal holding company (FPHC) income, which involves passive foreign income such as dividends, royalties, fees, and interest. Apple avoided U.S. taxation for the entire $44 billion through a combination of regulatory and statutory tax loopholes known as the check-the-box and look-through rules.
I've posted the whole memo on the Senate's findings, and Nelson Schwartz has a preview of what Tim Cook will say.
Every other topic in Congress is bleeding into the conversation about tax reform. Throw this report onto that pile.