- WASHINGTON (Reuters) - Fallen
energy-trading giant Enron did not pay U.S. income taxes in four of five
years through 2000, receiving tax refunds totaling close to $400 million
in the period, the head of a tax watchdog group said on Thursday.
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- Robert McIntyre, director of Citizens for Tax Justice,
a labor-backed tax research group, said he had analyzed Enron's financial
reports for 1996 through 2000, the most recent year for which they were
available.
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- He said he found Enron had used hundreds of subsidiaries
in tax-haven countries, as well as deductions for stock options, to avoid
paying taxes.
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- ``They made more money after taxes than before taxes,''
McIntire said. Other companies have used similar techniques, he said.
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- The Citizens for Tax Justice did a similar study in 1998
of half the Fortune 500 companies. ``Out of 250 companies, we found 24
that didn't pay taxes over 3 years,'' McIntire said. ''So that's about
10 percent of them.''
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- An Enron spokesman had no comment, other than to say
that in 2001 the company paid $60 million under the corporate alternative
minimum tax.
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- SENATE FINANCE COMMITTEE PROBE
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- The Senate Finance Committee is investigating whether
Enron has been complying with federal tax laws, said spokesman Mike Siegel.
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- ``Clearly the chairman, (Montana Democrat Sen. Max) Baucus,
as well as other members on the committee, are interested in whether Enron
had been in compliance with federal tax laws, and to that extent, we are
communicating with the proper federal authorities to gather the facts,''
Siegel said.
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- ``Once the facts are known, we will proceed accordingly,''
he added, but said there were no hearings scheduled at this time. The committee
is one of more than a half-dozen on Capitol Hill that are investigating
various aspects of the Enron collapse.
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- An IRS spokesman, speaking on condition of anonymity,
said the agency could not comment on reports it is looking at Enron's tax
filings.
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- ``If we were, we couldn't say so. If we're not, we can't
say we're not,'' he said. IRS regulations on taxpayer privacy apply to
companies as well as individuals, he said.
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- Once a Wall Street titan, Enron's stock slid dramatically
last fall and it filed for bankruptcy on Dec 2. Its spectacular demise
has sparked Capitol Hill inquiries as well as investigations by the Securities
and Exchange Commission and a criminal probe by the Justice Department.
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- HUNDREDS OF SUBSIDIARIES McIntire said he had found Enron
listed 880 subsidiaries in tax haven countries such as the Cayman Islands
and Mauritius. ``They list them in fine print in the annual report,'' he
said.
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- In the year 2000, Enron got a tax refund of $278 million,
he said. This was the largest of the refunds in the study. Of the five
years he examined, only in 1997 did Enron pay taxes, the records showing
a payment of $17 million, McIntire said. Altogether, the tax refunds over
the five years added up to $381 million, he said. McIntire said the company
may have benefited from provisions that weakened the corporate alternative
minimum tax after 1997.
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- ``That probably had an impact,'' he said. ``Some of the
things they were doing aren't covered by the minimum tax, like (deductions)
for stock options.''
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- Before its collapse last fall, Enron led a business lobbying
campaign on Capitol Hill to scrap the corporate alternative minimum tax.
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- Under the first version of the economic stimulus bill
that passed the Republican-majority House of Representatives, Enron would
have received a $254 million refund. Lobbyists involved said that while
Enron favored repealing the alternative minimum tax, it was not pushing
for the refund provision.
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- However the House plan was blocked in the Democrat-majority
Senate and did not become law.
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