 Using
a corporate tax loophole that has since been closed, International
Business Machines Corp. saved about $1.6 billion last
month, The Wall Street Journal reported in its
online edition yesterday.
IBM
said it had structured a $12.5 billion stock repurchase
to take advantage of funds it earned overseas without
making them subject to US corporate tax rates. IBM saved
about $1.6 billion in the move, the WSJ said, citing a
person familiar with the transaction.
According
to the report, Neither IBM nor the Internal Revenue Service
(IRS) was immediately available to comment.
On
31 May, or two days after IBM''s transaction, the IRS announced
plans to issue regulations making companies pay US taxes
when they buy back their stock, Its new regulations would
treat funds used for buybacks as repatriated earnings.
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