Healthcare // Analytics
Commentary
10/16/2007
03:33 PM
Paul McDougall
Paul McDougall
Commentary
Connect Directly
RSS
E-Mail
50%
50%
Repost This

Oracle Quiet As IRS Probes Quarter Billion Tax Write Off

The IRS is investigating whether Oracle used some accounting tricks to manufacture a quarter billion dollar loss and claim a $78 million refund. So far, Oracle won't talk--is it too busy trying to buy BEA?

The IRS is investigating whether Oracle used some accounting tricks to manufacture a quarter billion dollar loss and claim a $78 million refund. So far, Oracle won't talk--is it too busy trying to buy BEA?As first reported by InformationWeek on Monday, the tax agency is looking into whether the software maker improperly used the transfer of arcane assets known as promissory notes to a business partner to create a tax loss of more than $200,000,000 in 2003.

As a result of the loss, Oracle was able to collect a $78 million tax refund that year.

Sources say Oracle reported on its 2003 tax form that the loss was incurred because it was forced to sell stock in three companies it controlled at a price that was 24% less than face value.

Not so fast, the IRS says. Investigators doubt that a stock transfer actually took place and they've got a letter from a bank that helps prove it. The feds think the purported stock deals may have been nothing more than a tax shelter for a big corporation.

The stakes are high. When a public company has to revisit numbers of this size, earnings restatements sometimes follow. There's also the fact that, at a time when it's trying to consolidate half the software industry, Oracle might just want to have the government on its side.

Antitrust laws and all that.

For those reasons, I find it puzzling that Oracle won't explain its side of the story. I've called and e-mailed the company's PR folks several times--but, as Phil Collins once said--there's no reply at all.

Oracle, the government might want its $78 million back--so what's up with these stock deals?

Comment  | 
Print  | 
More Insights
Big Love for Big Data? The Remedy for Healthcare Quality Improvements
Big Love for Big Data? The Remedy for Healthcare Quality Improvements
Healthcare data is nothing new, but yet, why do healthcare improvements from quantifiable data seem almost rare today? Healthcare administrators have a wealth of data accessible to them but aren't sure how much of that data is usable or even correct.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Elite 100 - 2014
Our InformationWeek Elite 100 issue -- our 26th ranking of technology innovators -- shines a spotlight on businesses that are succeeding because of their digital strategies. We take a close at look at the top five companies in this year's ranking and the eight winners of our Business Innovation awards, and offer 20 great ideas that you can use in your company. We also provide a ranked list of our Elite 100 innovators.
Video
Slideshows
Twitter Feed
Audio Interviews
Archived Audio Interviews
GE is a leader in combining connected devices and advanced analytics in pursuit of practical goals like less downtime, lower operating costs, and higher throughput. At GIO Power & Water, CIO Jim Fowler is part of the team exploring how to apply these techniques to some of the world's essential infrastructure, from power plants to water treatment systems. Join us, and bring your questions, as we talk about what's ahead.