(Photograph courtesy of NASA)
Jesse Drucker has written an informative investigative report about off-shoring activities designed to reduce tax liabilities. Apparently, if a corporation large enough to move certain financial activities off-shore -- such as Bristol Myers in this article -- and if that corporation retains its own accountants and lawyers to give it opinions that the off-shoring activity is "legitimate," "that can protect the company from accusations that it deliberately broke the law." (Apparently, we only know about this particular activity because reporters were able to pierce the redactions in a report which the I.R.S. posted a year ago in April, 2020 about the Bristol Myers activity which actually took place in 2012-2013.) Jesse Drucker, Slip-up Bared Tax Trick Used by Drug Giant / Bristol Myers Disputes $1 Billion I.R.S. Bill, New York Times, Friday, April 2, 2021, at A1.
This possibility of legalized chicanery, if you will, raised some questions about Bad Faith in my mind that went beyond what was reported here. Is there immunity "from accusations that it deliberately broke the law" if, hypothetically, a company deliberately hires accountants and lawyers for the purpose of giving it bogus opinions so that the company can shield itself from liability?
If there is a "bad faith" exception to this kind of immunity, what would it look like? Barring authorities on point, resort to general principles of good faith law like the principles governing insurance companies might well provide the answers.
In the interim, if anyone knows what provisions of statutes or regulations confer the kind of immunity at issue in the Tax Trick article, supra, please leave a Comment below or send me an EMail via my website and let me know. I have researched them myself, including via Westlaw, and I have come up empty so far. Thank you for any help you can give.
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