Even the heavy hitters try to cut corners when it comes to paying taxes. Volkswagen is already in trouble for installing devices on its vehicles that would help it pass clean-air standards around the world. It turns out that a portion of VWs taxes are tied to company car CO2 emissions. The lower the emissions, the lower the company is taxed. Apparently, low emissions elicit tax breaks from federal authorities.
Originally, VW had announced that it discovered unexplained inconsistencies with respect to the CO2 it vehicles were putting out. Perhaps it brings into question the philosophy of “too big to fail.” The company has set aside $2.1 billion US dollars to fix the CO2 problem, and another $7.4 billion to fix its tax problems.
It looks like VW has the cash on hand to deal with its challenges. So, it is jail time a matter of getting caught—or is it a matter of not being able to ‘pay the piper’ when he comes knocking? At VWs level, they have the lawyers and financial advisers to straighten out the mess. If you’re a typical individual, it pays to have a tax professional from the Law Offices of Darrin T. Mish, P.A. in your corner when the going gets tough.
Check out more IRS News stories by clicking that link or contact us or call (813) 295-7648 for a consultation.