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?