BP taking $10 billion tax credit from Gulf spill

[Roland99]

Source: MarketWatch

Oil giant BP PLC will reduce its contribution to U.S. coffers by roughly $10 billion due to a tax credit the company is claiming it incurred from the Gulf of Mexico oil spill.

BP said Tuesday that it is incurring a charge of $32.2 billion from the Gulf response, and as such, it is claiming a $9.9 billion taxation credit.

Asked in a conference call Tuesday about whether it has discussed the tax credit with President Barack Obama's administration, outgoing BP Chief Executive Tony Hayward said, "We have followed the IRS regulations as they're currently written."

White House officials weren't immediately available for comment. The Internal Revenue Service said it's not allowed under federal law to discuss individual taxpayer issues.

Read more: http://www.marketwatch.com/story/bp-taking-10-billion-tax-credit-from-spill-2010-07-27

[Uncle Joe]

1. Got corporate supremacy?

Thanks for the thread, Roland.

[saigon68]

17. NICE BONUSES COMING SOMEONE'S WAY

[wordpix]

42. no wonder Tony got such a good bonus this year

[FiveGoodMen]

2. "When all goes right, it's our money. When there's trouble, it's your loss."

America is too fucking stupid to live.

[Oregone]

3. So their cleanup is 1/3rd subsidized by YOU!

:rofl:

[Xipe Totec]

6. You really think they spent $32 billion on cleanup?

I bet they spend less than $10 billion, so it's 100% subsidized.

Maybe more.

[Oregone]

7. No idea on their figures...maybe they are counting the spewed oil as loss too

[Jackpine Radical]

9. So they lowball the estimated barrels spilled when it comes to

making reparations,

then suddenly discover the spill was actually a couple of orders of magnitude larger when it comes to claiming the losses.

Goddam, I love capitalism. I love corporations.

[Statistical]

18. They are including the $20B fund (which hasn't been paid yet) in $32B charge.

Companies can write off a loss when it occurs not when they actually pay for it.

[Xipe Totec]

30. They must be including the $12B cleanup cost (which hasn't been paid either)

They've spent $1B - $2B tops.

So right now, they're $8B ahead.

[Statistical]

39. Likely true.

Accounting in sometimes "weird" compared to everyday finances (personal checking account).

However a company which is aware of a definitive future loss is required to report it at the time they are aware not when they actually make a payment.

Sadly a parallel would be Exxon. They took a charge decades before they actually paid the victims of the Valdez spill.

[wordpix]

43. exactly---where are the payments to those suffering losses, Tony?

That includes the state, parishes, the people, the $20 B you haven't paid...not to mention the penalties you're about to pay for non-permitted toxic releases to air and water.

[dipsydoodle]

31. Its not necessarily been spent

- its a provision against expenditure which is normal accounting practice. Getting an accountant to explain to you would be best.

[Xipe Totec]

32. Explain what, that they get $10B in tax breaks in advance, against potential future losses?

Yes, please, by all means let's get an explanation. It will make me feel so much better.

[dipsydoodle]

33. Like I said

get an accountant to explain.

[Xipe Totec]

34. As if an explanation would make this any better.

[joeglow3]

40. I am a CPA and have no clue what you are talking about

From a tax standpoint, they would not meet the economic performance rules of IRC Sec. 461 until they actually paid cash (within 2.5 or 8.5 months of year end, depending on the type of expense).

[Soylent Brice]

4. holy fuck. a loophole the size of a gulf spill.

unfuckingbelievable.

[Dreamer Tatum]

27. It's not a loophole. Do unemployed people pay income tax on spent savings?

Not saying I like it. It is what it is.

[Greyskye]

5. K & R for visibility

[harun]

8. They haven't paid 10 billion in Federal taxes to get back. Exxon pays no Federal taxes.

[Uncle Joe]

10. If it's truly a tax "credit," they won't have to pay 10 billion in taxes.

The government will send them a check for 10 billion.

[feslen]

11. hey it's our TAX dollars

At work!! *sarcasm*

Uncle Sam says, "We want YOU to clean up the Oil Spill and not the Big Oil Companies!"

[Poll_Blind]

12. Fuck BP in their goaty ass. n/t

PB

[defendandprotect]

13. BP should be shuttered -- out of business -- in jail --

[flyarm]

14. Ever lose a home in a natural disaster? You are capped at how much credit you can take off your

taxes..and it is pretty damn low..

How do I know..I lost a home in an Earthquake..

Why are these fuckers allowed to take WAYYYYYYYYYY..more than we the people..especially a foreign corporation?????????

How about how much we the people on the gulf are losing in our property values..and jobs , and businesses that have been fucked by BP..Just try getting credit for all our losses..ha..what a fucking disgrace!

[Towlie]

15. IRS not allowed to discuss it? Another example of the fallacy of treating corporations as people.

Corporations are not individuals, so a law against discussing individual taxpayer issues should not apply to them.

[Dappleganger]

16. Just tell them no tax credit until they completely fund that 20 billion amount they owe.

I am quite sure the good fishermen and oystermen of the Gulf have something nice to say about that tax credit.

[wordpix]

44. plus, let's let them know their estimated penalties in advance

if they can start writing off tax credits in advance of tax payments, we can start penalizing them based on advanced estimates, too. :grr:

[kpete]

19. BP to take $10 billion tax credit from spill

Source: Wall Street Journal

July 27, 2010, 10:46 a.m. EDT ·
BP to take $10 billion tax credit from spill


LOS ANGELES (MarketWatch) -- As part of its second-quarter earnings report, oil giant BP PLC said Tuesday that it will reduce its contributions to U.S. tax coffers by $9.9 billion, due in large part to the Gulf of Mexico oil spill. BP indicated in its report that it is taking a $32.2 billion charge against earnings for the Gulf response efforts, which allows them to take the tax credit. "We have followed the IRS regulations as they're currently written," outgoing BP Chief Executive Tony Hayward said in a conference call.


Read more: http://www.marketwatch.com/story/bp-to-take-10-billion-tax-credit-from-spill-2010-07-27

[Statistical]

20. Oh wow.

[704wipes]

22. Just WHEN did it go into the code and WHO put it there ??

Next logical question for me. Then I will know a lot.

[Statistical]

23. I think is is more just general corporate/business accounting.

BP suffered a $32 billion loss (charge). As a result they can claim tax deduction for that just like any other loss/charge. If a small business owner suffers a robbery and loses $2,000 they could similarly do the same thing. The tax code allows charges to be applied to taxes paid so BP is request a refund.

I just think nobody anticipated a company getting that big of a break. Imagine the Treasury having to write BP a check for $10B because they spilled oil in the Gulf. Most companies suffering that big of a loss would simply fail and as a result no company, no taxes, no tax credit.

[joeglow3]

24. I assume that is true and cannot dispute it

You can't let Congress (or the Service) arbitrarily pick items of income to tax and randomly exclude items of expense unless the code already specifies it (i.e M&E, lobbying, fines and penalties, etc.).

[wmbrew0206]

35. It is part of Generally Accepted Accounting Principals

It is an eye popping figure because the amount that is costing BP is so huge.

This is acceptable practice unless the federal government wants to step in not allow it in BP's case, which is unlikely.

[Dreamer Tatum]

26. Ummmm...it's accounting law. nt

[onehandle]

21. No time like the present to seize their U.S. assets.

Oh, what the heck... Nationalize oil and we'll call it even.

[wordpix]

45. time to get those penalties in order or just take over BP

[City Lights]

25. Fuck BP.

Ditto for their enablers.

:nuke:

[valerief]

28. Why do people protect these assholes? nt

[Jefferson23]

29. Yea for the oligarch's..hip hip hooray! n/t

[Electric Monk]

36. Privatize the profits, socialize the costs. That's how they work on that scale.

Just like Wall St.

[dogfacedboy]

37. Death To BP

[Mnemosyne]

38. And I get fucking audited for the long time home owners credit of $1200. knr n/t

[AngryAmish]

41. Sen. Kerry tries to avoid taxes, some people applaud. BP does same...

My cat's breath smells like cat food.