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Tax Notes Today Quotes David Rosenbloom: EBay Accepts 'Buy It Now' Tax Price on $9 Billion Repatriation

May 1, 2014, Tax Notes Today

Tax Notes Today spoke with H. David Rosenbloom concerning the $3 billion tax bill paid by eBay Inc. for repatriating $9 billion during the first quarter of 2014, making it one of the largest repatriations in recent years. For the complete article, please visit Tax Notes Today's website (subscription required).

Excerpt taken from the article "EBay Accepts 'Buy It Now' Tax Price on $9 Billion Repatriation" by William R. Davis for Tax Notes Today.

H. David Rosenbloom of Caplin & Drysdale speculated that eBay may have repatriated the earnings to address "pressing needs in the United States such as executive compensation and stock buybacks."

Companies with large offshore earnings make regulatory statements about their intentions of keeping the earnings overseas for investment, and auditors often acquiesce, Rosenbloom said; however, those companies can repatriate the cash whenever they want.

"There's the downside of needing to accept the previously ignored U.S. tax cost as an earnings hit, but if [the companies] want cash badly enough, they swallow hard and go for it," Rosenbloom added. He said that that is likely how eBay got to the point where it had to repatriate $9 billion.

"Everyone in the tax community thinks the world turns according to the tax laws," Rosenbloom said. He said that instead, financial accounting is what "ultimately determines compensation and, of course, compensation determines everything else."



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