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The IRS Hits Symantec with a $1 Billion Tax Bill

ScuttleMonkey posted more than 8 years ago | from the i-don't-feel-quite-so-bad-now dept.

337

GnoWay writes "Macworld is reporting that the IRS has charged Symantec Corporation with about a 900 million dollar tax bill due to the charge that Symantec and Veritas (purchased by Symantec last year) under-reported the value of intellectual property which they had transferred to their two Irish subsidiaries. Another $100 million is connected to Symantec's 2003 and 2004 reports."

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News source (0, Troll)

charlesnw (843045) | more than 8 years ago | (#15151839)

Why was this posted on Macworld? Talk about off topic...

Re:News source (2, Insightful)

creimer (824291) | more than 8 years ago | (#15152075)

Why not? With the ability to run Windows in a virtual machine or as part of a dual-boot on Intel Macs, even Mac users will need a antivirus program to practice "safe computing" while playing Minesweeper.

Re:News source (3, Informative)

toleraen (831634) | more than 8 years ago | (#15152149)

I have no idea. [symantec.com]

boring (0, Offtopic)

Shut the fuck up! (572058) | more than 8 years ago | (#15151841)

boring

Ouch...will they sell off Norton? (1)

IflyRC (956454) | more than 8 years ago | (#15151846)

That's quite a big hit for Symantic. Anything think they might start selling off software titles? Norton is one of their big money makers so I doubt that will happen but I would definitely NOT want to be a Symantic employee right now.

Re:Ouch...will they sell off Norton? (2, Insightful)

jim_v2000 (818799) | more than 8 years ago | (#15151890)

Norton Antivirus is small fries. The big money comes from Symantec's corporate antivirus.

Re:Ouch...will they sell off Norton? (0)

Anonymous Coward | more than 8 years ago | (#15151938)

actually SAV is small fries too. The big money is in ESM, EV, Live State and other security products.

Re:Ouch...will they sell off Norton? (4, Funny)

badmammajamma (171260) | more than 8 years ago | (#15152002)

Actually that's small potatoes too. The big money is in porn.

Re:Ouch...will they sell off Norton? (5, Funny)

Tackhead (54550) | more than 8 years ago | (#15152067)

> Actually that's small potatoes too. The big money is in porn.

If a $900M bill from the IRS doesn't count as getting fucked, I don't know what does.

Re:Ouch...will they sell off Norton? (1)

creimer (824291) | more than 8 years ago | (#15152108)

That $900 million figure was probably a mistake. Wouldn't be the first that a decimal point got move over a few notches. One of these days the IRS should upgrade their DOS machines.

Re:Ouch...will they sell off Norton? (1)

Alex P Keaton in da (882660) | more than 8 years ago | (#15152247)

900 million does sound like a lot for taxes on IP... There must be more to the story...

-------

Chuck norris was writing an email, and then he realized it would be faster to just run

Re:Ouch...will they sell off Norton? (1)

smoker2 (750216) | more than 8 years ago | (#15152259)

fucking's not porn, it's natural.

Trying to get away with shifting corporate property with a tax liability of $900M out of the country is pornographic.

I've a feeling this story could run, enron, enron.

Re:Ouch...will they sell off Norton? (1)

easter1916 (452058) | more than 8 years ago | (#15152158)

Hey, all this potato talk is negative stereotyping... just because the Irish subsidiary was involved! ;-)

No (2, Interesting)

WebHostingGuy (825421) | more than 8 years ago | (#15151894)

It will be tied up in Tax Court (where you appeal decisions like this) for years.

Re:No (5, Insightful)

voice_of_all_reason (926702) | more than 8 years ago | (#15152172)

It will be tied up in Tax Court (where corporations appeal decisions like this) for years.

Fixed.

(we peons simply go to directly pound-me-in-the-ass-prison -- do not pass go, do not collect dropped soap)

Re:Ouch...will they sell off Norton? (0)

Anonymous Coward | more than 8 years ago | (#15152031)

Rumor is that Sony is offering five or six times that amount to them to just pretend that Sony malware isn't.

taxing IP (4, Funny)

bbsguru (586178) | more than 8 years ago | (#15151848)

I just had a thought. Do I owe anything?

Re:taxing IP (5, Funny)

Anonymous Coward | more than 8 years ago | (#15151874)

under-reported the value of intellectual property

I doubt it, hell, you might need a rebate

Re:taxing IP (0)

Anonymous Coward | more than 8 years ago | (#15152052)

Rebate? He should get tax exempt status!

Re:taxing IP (1)

truckaxle (883149) | more than 8 years ago | (#15151900)

Maybe you should see if you qualify for an earned income credit! :)

Re:taxing IP (0)

Anonymous Coward | more than 8 years ago | (#15151951)

Nope, all your "IP" is down the toilet.

Re:taxing IP (1)

pfurlong (174363) | more than 8 years ago | (#15151953)

Well, how many systems do you have at home that are using IP? Please be sure to include both TCP, UDP, and any other protocols.

I'm hoping to seriously under-report my IP usage.

Re:taxing IP (3, Funny)

Enzo the Baker (822444) | more than 8 years ago | (#15152045)

Depends on whether it's your two cents' worth, or someone is giving a penny for your thoughts.

Re:taxing IP (1)

saddino (183491) | more than 8 years ago | (#15152049)

Yes, but only if you sell it to someone.

Re:taxing IP (1)

Jupix (916634) | more than 8 years ago | (#15152268)

Hmm.. Come to think of it, yes you do! Please transfer $500 to my Paypal account immediately.

Thanks,
IRS

It's okay. (4, Funny)

Rob T Firefly (844560) | more than 8 years ago | (#15151854)

Luckily, Norton Internet Security filtered out the IRS' notice before anyone at Symantec could read it. I won't tell if you won't...

Unrelated (5, Funny)

liliafan (454080) | more than 8 years ago | (#15151857)

In unrelated news, the IRS has reported sudden loss of all their backups, and serious infection from computer viruses.

What's "intellectual property" (2, Funny)

Anonymous Coward | more than 8 years ago | (#15151861)

Is that like a smart building?

Re:What's "intellectual property" (1)

UberHoser (868520) | more than 8 years ago | (#15151922)

The reverse of the White house

Lets Hope... (0)

Anonymous Coward | more than 8 years ago | (#15151867)

Lets hope they go bankrupt and sell off all the programs that were good... before they became totally bloated. :)

Re:Lets Hope... (1)

PastAustin (941464) | more than 8 years ago | (#15152016)

Lets hope they go bankrupt and sell off all the programs that were good... before they became totally bloated. :)


Good programs? Are you sure we're talking about the same company?

Values of Non-Physical Objects (5, Interesting)

SeanDuggan (732224) | more than 8 years ago | (#15151883)

A billion dollars for intellectual property? Gosh, that's like charging $750 for copying one song [dmusic.com] ... Seriously, though, how does one value these things? For that matter, what intellectual property is this? The article is rather vague.

Re:Values of Non-Physical Objects (4, Informative)

William_Lee (834197) | more than 8 years ago | (#15152020)

Seriously, though, how does one value these things? For that matter, what intellectual property is this? The article is rather vague.

It's IP based off an acquistion of a company called Veritas that the public financial market valued at over $10 billion in total. What appears to have happened here is that Symantec doesn't believe that something they bought in the deal is worth anything near what the IRS is claiming it is worth. I'm no CPA but I'm guessing it's related to how Symantec is calculating the goodwill involved in the acquistion.

Re:Values of Non-Physical Objects (2, Insightful)

Tim C (15259) | more than 8 years ago | (#15152163)

Same way most people decide on the value of a physical object - some combination of how much it cost to produce it, the worth to the person in question, what they could sell it for, how much they're prepared to pay, and so on.

Just because it can be easily reproduced doesn't mean that it was free to create the first copy or that it has no resale value.

Gosh, that's like charging $750 for copying one song...

That's a punishment and a deterrent. When something illegal is easy to do, hard to detect and widely regarded as not really being that big a deal, the punishment tends to be on the harsh side, or even out of all proportion. It's meant to act as a deterrent, the idea being that if it's so easy, so unlikely that you'll get caught and doesn't seem to hurt anyone, a sledgehammer punishment is the only thing that will stop prospective transgressors.

I'm not saying that it's right, or just, but that's the theory behind it as I understand it.

If I were them (3, Funny)

Anonymous Coward | more than 8 years ago | (#15151884)

I'd call one of those tax-help agencies. They can usually settle for pennies on the dollar.

Symantec now fighting real wars, not just digital (-1, Troll)

0110011001110101 (881374) | more than 8 years ago | (#15151887)

So Symantec just bought the latest gov. issue robot that can see through walls, has a "mysterious" force field, nuclear capabilities, and the mission to destroy all infidels!!

Yay symantec! George Bush salutes you!

Poor Peter.... (1)

Itninja (937614) | more than 8 years ago | (#15151892)

I can't wait to see a box with a shirtless Peter Norton on the front.
That's pretty freakin' hot if you ask me.

This won't stick. (2, Insightful)

Quasar1999 (520073) | more than 8 years ago | (#15151903)

I'm sure that the IRS and the evil company that didn't pay their taxes will come to some agreement, and it will be way less than a billion dollars. Companies always find a way out of messes like this. Of course, it'd be neat if Symantec were to declare that they were bankrupt, and then reopen under the name Norton, without paying a dime... Only in America... :P

Don't Be So Certain... (2, Interesting)

Black-Man (198831) | more than 8 years ago | (#15152168)

They obviously pushed their IP to the Irish subsidiary's specifically to avoid the IRS. And they got caught. Sure, they will settle, but they WILL pay in this post-Enron world.

Haha (0, Troll)

Odin_Tiger (585113) | more than 8 years ago | (#15151914)

pwned. [grisoft.com]

Thanks IRS - way to bring down the market (0, Troll)

us7892 (655683) | more than 8 years ago | (#15151915)

Hey IRS - thanks for bringing down their stock price by 40 cents. Hit all us stockholders in the pocketbook. How about working on a payment deal without going for the headlines?

Re:Thanks IRS - way to bring down the market (2, Insightful)

jellomizer (103300) | more than 8 years ago | (#15151984)

So you want the government to Tip Toe (More) around public traded companies because of fear of shacking the stock prices. As a stock holder I would like to know if the companie I have stock in may have to pay a huge dept to someone else. Plus you also do realize stock prices rise and fall all day. I have seen cases where a company makes their exceeds their their projections are even higher. And still their stock gets hammered. Just remember Stock only is money when you sell it. Before that it is just the current value of of it. Once you buy stock your money is gone. When you sell it again then you get what it is worth at the time back.

Re:Thanks IRS - way to bring down the market (1)

Pope (17780) | more than 8 years ago | (#15152004)

Riiight, because you immediately sold all your stock as soon as it went down.

Re:Thanks IRS - way to bring down the market (-1, Troll)

Anonymous Coward | more than 8 years ago | (#15152029)

Stockholders are morons, assholes, parasite. Hitting them in the pocket book is a good start. But hitting them in the head with a nailed bat is what they really deserve.

Re:Thanks IRS - way to bring down the market (0)

Anonymous Coward | more than 8 years ago | (#15152187)

I think you meant lobbyists and lawyers.

Not to mention everyone who thinks that Microsoft is responsible for everything bad that happens in the world.

Rolling blackouts in Texas? Microsoft's to blame.
Gasoline over $3/gal? Microsoft's to blame.
Linux sucking ass? Microsoft's to blame.

Yada, yada, etc.

Re:Thanks IRS - way to bring down the market (2, Insightful)

suitepotato (863945) | more than 8 years ago | (#15152227)

Thanky you for insulting the millions of people who work honest jobs, have investments for the future to provide for their retirement and families, and contribute to the world every day. Good going.

Re:Thanks IRS - way to bring down the market (0)

Anonymous Coward | more than 8 years ago | (#15152245)

Brilliant assessment (read sarcasm here). Actually, most (a huge majority), of stock holders are average people who work for a living. They have 401k and retirement holdings which are mostly comprised of mutual funds. The majority of mutual funds available to 401k's are stock funds of some sort. Almost all of Symantec's stock is owned by institutional investors (that would be funds, banks, private funds, etc...), then comes private investments, as well as the lowley employees themselves. I suppose if the average Joe is a moron, asshole, or parasite, then you are right on the mark; and if you are an average Joe, feel free to hit yourself in the head with that nailed baseball bat... nobody here will stop you ;)

Re:Thanks IRS - way to bring down the market (0)

Anonymous Coward | more than 8 years ago | (#15152115)

How is that the IRS's fault? Symantec made the huge mistake. Go blame Symantec. If you don't trust the company, don't buy their stock.

Re:Thanks IRS - way to bring down the market (1)

voice_of_all_reason (926702) | more than 8 years ago | (#15152213)

Actually, since you're a part of the company, you are responsible as well, correct? Enjoy your hard time.

Like the above poster said... stocks, bonds -- bad news.

Re:Thanks IRS - way to bring down the market (1)

Guppy06 (410832) | more than 8 years ago | (#15152242)

I suppose you were pissed at the FTC when Enron went under.

Valueing intellectual property? (3, Insightful)

Buzz_Litebeer (539463) | more than 8 years ago | (#15151919)

How do you VALUE intellectual property? Is it what someone ELSE might pay for it, or what you say it is worth?

If you go off of what someone ELSE might pay for it, then songs should be nearly free or much discounted vs what they are currently.

If you go by what you value it to be, then you can make the value arbitrary since you are the one who applies value to it right?

WTF? How do they make these determinations.

My thoughts exactally (1)

nurb432 (527695) | more than 8 years ago | (#15151934)

Unless you are selling, and have a *real* dollar value, its all just shady accounting practices.

I hope this puts them out of business.

Re:Valueing intellectual property? (2, Informative)

pizzaman100 (588500) | more than 8 years ago | (#15151944)

Rambus [yahoo.com] is worth 4.7 Billion, so it's definitly worth something.

Re:Valueing intellectual property? (3, Informative)

Daniel_Staal (609844) | more than 8 years ago | (#15151960)

The same way you assign a value to anything else in a capitalist system: by what the market price for it is. (Or would be, if it were on the market.)

That price is influenced both by what people are willing to pay for it and what you are willing to sell it for. If the two go to far out of wack, you either get obcene profits or bankrupsy. (Depending on which way they are out of wack.) In the former case, someone else should enter the market, and start a price war. In the latter, you are being forced out.

Re:Valueing intellectual property? (1)

Phoenix666 (184391) | more than 8 years ago | (#15152081)

yeah, but the marginal cost of production of IP is zero, so in a true free market without government interference the market price should and would be competed to the point where profit is zero, or a price of zero. that's why invoking "market economics" to justify the price or cost or loss of intellectual "property" is disingenuous and goofy.

Re:Valueing intellectual property? (1)

GlassHeart (579618) | more than 8 years ago | (#15152263)

The problem with your viewpoint is that it becomes a massive hole for money laundering. If for whatever nefarious purpose Microsoft sells you the rights to Windows for $100, and Dell then has to pay you $50 per computer sold, they have effectively transferred billions of dollars to you despite the apparent transaction sum. What the IRS is doing here is trying to assess the true value of the transaction, while your rant on how things ought to be really doesn't accomplish much toward that necessity.

Re:Valuing intellectual property? (2, Interesting)

Duodecimal (938540) | more than 8 years ago | (#15152110)

The flaw in that argument is that the free market can only reach prices for scarce resources. Resources that are not scarce (information, ideas) and must be protected by statutory 'rights'. And the only way to enforce a statutory right is to violate a natural or property right (i.e., what I do with my recordable media in my DVD writer).
So, my initial irritation with the IRS deciding to extort a huge chunk of money is offset by knowing that a corporation that lives by the sword is getting cut by it too.

Re:Valuing intellectual property? (1)

Duodecimal (938540) | more than 8 years ago | (#15152153)

Erm, something ate two whole clauses from two consecutive sentences. To rephrase:

The flaw in that argument is that the free market can only reach prices for scarce resources. Resources that are not scarce (information, ideas) and must be protected by statutory 'rights' have no free market value. And the only way to enforce a statutory right is to violate a natural or property right (i.e., what I do with my recordable media in my DVD writer) by having the local justice monopoly (government) grant a useage monopoly (copyright, patent).

That's not free market.

So, my initial irritation with the IRS deciding to extort a huge chunk of money is offset by knowing that a corporation that lives by the sword is getting cut by it too.

Re:Valueing intellectual property? (1)

NewWorldDan (899800) | more than 8 years ago | (#15152133)

But the problem here is that no one is actually buying and no one is actually selling the property in question. Symantec "licensed" it to a foreign subsidiary. I'm not sure that any money actually changed hands. As far as I can tell (and the article is pathetic on the details) this is all about an entry in a ledger that the IRS feels is too small. There is no market for the "property" in question and no way to determine a price for it.

This is how I would do it. (0)

Anonymous Coward | more than 8 years ago | (#15152006)

How do you VALUE intellectual property?

I would subtract from the purchase price all of the tangible assets, then subtract the value of the "goodwill" (another valuation hocus pocus), and any other assets like securities and notes, etc... Whatever is left that would be value of the intellectual property - which is basically what you said: the price that the purchaser was willing to pay for it.

This will go to court and/or the IRS ( without the space it's "THEIRS" - funny) will just (maybe) settle for a smaller amount.

Re:Valueing intellectual property? (2, Interesting)

saddino (183491) | more than 8 years ago | (#15152027)

Both! Intellectual property is valued exactly like physical property: the price the market is willing to pay for it. If the price is too high, then the seller will lower the price. If the price is too low, then the seller will raise the price. The seller gets to set the price, and the market determines whether the price is correct or not.

For online music, the success of the 99 cents per song seems to indicate that yes, a compressed, digital song with DRM is worth about 99 cents. Was Skype worth $4 billion? Yes, because someone was willing to buy it for that much after the founders asked for it. Is a 20oz Coke in a vending machine worth $1.25? Sure!

What's the trouble?

Re:Valueing intellectual property? (1)

rainman_bc (735332) | more than 8 years ago | (#15152205)

Both! Intellectual property is valued exactly like physical property: the price the market is willing to pay for it.

No; not on your books. On your balance sheet, it's worth what you paid for it less ammortization, not what the market value is. When you report your assets, you report it at book value, not market value. That is per GAAP.

A transfer to a subsidiary is deemed a disposition. Normally this disposition would be valued at what a company paid for it, but because it's a disposition to a subsidiary, they have to prove the market value instead of simply being able to demonstrate it.

This will stay in tax court for years.

Re:Valueing intellectual property? (1)

everphilski (877346) | more than 8 years ago | (#15152141)

I'm assuming you work for a living? Do you get paid? Is your time worth something to you?

Time * what you are worth per hour = value.

There is a very basic formula for the value of something, regardless of its concreteness. If you put 40 hours into making a piece of IP, and you are worth $20 an hour, then your IP could be worth $800. But a more intelligent way of pricing it is by supply and demand, which was figured out thousands of years ago, this is economics 101.

Even beter, outdated IP value! (1)

RingDev (879105) | more than 8 years ago | (#15152197)

The issue stems from Symantic undervaluing the IP behind Veritas in 2000-2001. Now, I'm sure I'm not the only one on /. that had to deal with that worthless piece of crap software in that time frame. The IP value of Veritas wasn't worth the CD the software was burned on. I've seen more effective backup systems writen in 5 lines of bash script.

In any case, it hardly matters. Symantic and the IRS will argue, then settle for $20 mil.

-Rick

Re:Valueing intellectual property? (1)

Rude Turnip (49495) | more than 8 years ago | (#15152204)

In the most general terms, you look at the cash flows that IP is expected to generate and discount them back to the present at a risk-adjusted rate of return. You can also search the financial literature (news, SEC filings) to find similar transactions and try to figure out some sort of valuation ratio. Naturally, you would hire an independent valuation firm to actually figure this out, lest you want to appear biased.

New Tax Policy (1)

Vandilizer (201798) | more than 8 years ago | (#15151926)

Now don't forget boy's and girls if you learnt something this year to accurately estimate the Intellectual property that you have gained and if you have taught anyone then that you have spent and report it on your tax bill. Also if that knowledge increases with value over time that gain must also be reported as well.

Honestly I just don't know what to say ladies and gentlemen. I do not think I could afford that tax bill.

Re:New Tax Policy (0)

Volante3192 (953645) | more than 8 years ago | (#15151937)

Fortunatly, lobotomies are now tax deductable.

Re:New Tax Policy (2, Funny)

TykeClone (668449) | more than 8 years ago | (#15152059)

Fortunatly, lobotomies are now tax deductable.

But only the expense from them that are greater than 7.5% of your Adjusted Gross Income - and only if you are itemizing your deductions anyway.

Re:New Tax Policy (1)

aztec rain god (827341) | more than 8 years ago | (#15151966)

Whatever happened to the old Faber College motto:

"Knowledge is good"

Nothing New About Tax Evasion& Creative Accoun (0, Interesting)

Anonymous Coward | more than 8 years ago | (#15151942)

There is nothing new about tax evasion and creative accounting. The Securities and Exchange Commission (SEC) and the IRS have investigated numerous firms in the past year.

Show me an honest businessman, and I will show you a figment of your imagination.

The tax laws (as I understand them) are mainly for the middle class and lower classes. The rich and the corporations exploit a dizzying array of loopholes to avoid paying taxes. Most Americans do not earn enough money to qualify for these loopholes. Without the loopholes, the IRS tax guide would have exactly 3 pages: the front page, the tax formula, and the back page. The current IRS tax guide, packed with hundreds of detailed loopholes, requires more than 1000 pages.

The biggest unstated truth in the corridors of Congress is that 33% is the highest enforceable tax rate in America. Once the tax rate exceeds 33%, the rich move their money into offshore accounts that answer to no one. That goes double for George Soros.

Re:Nothing New About Tax Evasion& Creative Acc (4, Insightful)

qbzzt (11136) | more than 8 years ago | (#15152216)

Without the loopholes, the IRS tax guide would have exactly 3 pages: the front page, the tax formula, and the back page.

Not exactly. How do you define income? In other words, what is a business expense (I bought a widget for $15 and sold it for $25, so I made $10), and what isn't (I bought a widget for $15 and lunch for $5, then sold the widget for $25 - I still made $10)? What if I bought lunch to find widget buyers in the restaurant?

The whole concept of taxing income is flawed because income is abstract. It can be manipulated in multiple ways. It would be better to tax something tangible like property or sales - but that would lose politicians their power to play with the tax code to the benefit of their backers.

No problem.. (2, Insightful)

Anonymous Coward | more than 8 years ago | (#15151952)

They will just release another major virus soon and rake in the cash to cover this settlement with the IRS, no problem.

Just over $1B in revenue. (1)

gasmonso (929871) | more than 8 years ago | (#15151969)

With a revenue of just over $1B expected this quarter, that certainly is a bite in the ass. Looks like the cost of Norton AV is going up.

http://religiousfreaks.com/ [religiousfreaks.com]

Not really a billion (0, Offtopic)

Anonymous Coward | more than 8 years ago | (#15151972)

900 millions and 100 millions add up to 1000 millions, not 1024 millions.

Re:Not really a billion (1)

LiLWiP (918943) | more than 8 years ago | (#15152058)

Is that millions with a big dollar sign or a little dollar sign???

Symantic is now The Official Sponsor of... (-1, Troll)

AmazingRuss (555076) | more than 8 years ago | (#15151975)

...the War in Iraq.

For 3 or 4 days, anyhow, until that billion is burned.

Don't titter so...you and I are next.

Dependents (2, Funny)

LiLWiP (918943) | more than 8 years ago | (#15151997)

Luckily, Symantec can claim the millions/billions who use their live update as dependents, so this will really only end up being like a $20 tax bill when they are done filing. Thank GOD for TurboTax.

all thoughts (1)

jollyroger1210 (933226) | more than 8 years ago | (#15152001)

All thoughts should be taxable at 2 cents maximum......

$1 Billion Tax Collection (3, Funny)

digitaldc (879047) | more than 8 years ago | (#15152022)

Great! This money will be well spent by Congress, oh wait....
it is already gone, what a shame, before I could even finish my congratulations.

You expected any less (0)

Anonymous Coward | more than 8 years ago | (#15152032)

Microsoft needs some kind of help to ba able to market its' up and coming anti-virus software. This is just the government's way of throwing MS a bone!

Re:You expected any less (0)

Anonymous Coward | more than 8 years ago | (#15152113)

Take off the tinfoil hat. The conspiracy theory is getting old.

Symantec bought into Veritas's problems. (5, Informative)

black2d (839906) | more than 8 years ago | (#15152038)

From the article the 900 million is "in connection with the Veritas claim, which covers the 2000 and 2001 Veritas tax returns" So symantec basicly got screwed in the whole deal , bought a company then has to pay their debts from 5 years ago. That sucks.

Re:Symantec bought into Veritas's problems. (1)

Surt (22457) | more than 8 years ago | (#15152116)

In all fairness, Symantec only got screwed if they didn't do due diligence work about their purchase, which would make it their own fault. No one spends $10 billion to buy a company without looking through the books and paying their own corporate accountants to do an audit. On the other hand, if they did their due diligence work, then they probably knew, and maybe were just hoping they could get away with something, in which case, yay for the IRS, make those corporate tax frauders pay!

Re:Symantec bought into Veritas's problems. (1)

osgeek (239988) | more than 8 years ago | (#15152211)

Maybe, but I don't think it's common to go back and recheck all of your acquisition's from 5+ years before. Just getting a handle on that quarter's numbers for a $10B company can take a long time and a huge amount of auditing effort.

IANAA, though...

Re:Symantec bought into Veritas's problems. (1)

keepingmyheaddown (767900) | more than 8 years ago | (#15152192)

It looks like they got caught in a transfer pricing scheme to evade US taxes. They set up an Irish subsidiary to handle all sales outside the US, but didn't charge the sub a fair (in the opinion of the IRS) price for the software/IP they were selling. Gaming transfer prices is SOP for US multinationals.

As for it sucking, look up "due diligence"...

Re:Symantec bought into Veritas's problems. (0)

Anonymous Coward | more than 8 years ago | (#15152195)

They should go ask those nice republicans if they would like a donation solved.

Not suprising (4, Funny)

ejaw5 (570071) | more than 8 years ago | (#15152039)

Symantec probably hired H&R Block to do their taxes this year.

I'm starting to wonder... (0)

Anonymous Coward | more than 8 years ago | (#15152064)

If our CEO has a crystal ball.

I work at EMC, when we bought Legato then a couple of months later Symmantec bought Veritas I remember thinking "What kind of dumb@$$ manuever was that?!? We could have had VxVM/VxFS, Backup and clustering that people actually use for only a couple of hundred thou more than we bought Legato for!"

I still have a hate-on for Joe (what he's done overall to the companMy is disgusting) but I have to give him props for not getting sucked into a billion dollar fiasco.

No balls, no real fight (0)

Anonymous Coward | more than 8 years ago | (#15152072)

IRS just neutered one of the of the dogs in the battle for the antivirus market.

Great. (1)

MImeKillEr (445828) | more than 8 years ago | (#15152076)

Now they won't be able to afford to hire any additional developers to improve their crappy products.

Don't quite understand it (0)

Anonymous Coward | more than 8 years ago | (#15152086)

Okay... So a company buys an other company.
Isn't the sales price what the value of the sold company is?

What has just happened with the principle that "the market knows best"?

Was Veritas "undervalued" in order to save on tax bill, and the difference of the sale price and the "real value" was paid under the table?

Or Veritas just made a bad deal and the IRS knows better what the real value for Veritas was?

I don't quite understand it.

Live by the Patent, Die by the Taxes.... (1)

BookRead (610258) | more than 8 years ago | (#15152093)

I love it! Getting bit in the ass over-valuing Intellectual Property. And then trying to have your tax cake and eat it too by selling it to foreign subsidiaries. Made my day!

Seriously, though, maybe that will help companies take a more measured approach to valuing "intellectual" "property".

New supporters (1)

Artifex33 (932236) | more than 8 years ago | (#15152121)

Let's see if the hits from Symantec to www.fairtax.org increase at all.

Learn from this... (5, Insightful)

infinite9 (319274) | more than 8 years ago | (#15152126)

I used to work for veritas and got out shortly after the buyout. Veritas was a cool place to work. And when symantec took over, they sent out this 1/4" thick book full of management-speak. It was unreal. "What is winning?" "We believe in unity." "Our customers trust us to lead the way." After all of this, they listed the names of every employee from either company. Then they had a company-wide conference call with the new ceo. They had "questions from employees" dolled out by a pretty-sounding secretary type. One of the questions was "what can I do to be a better employee?" "You know, I'm being asked that all the time..." I nearly vomited. Ahead of their exit interview, they send you this questionaire to fill out planning to go ever it with you later. After I sent it back to them, they didn't want to have an exit interview anymore... something about how the ceo on the conference call sounded like a lord trying to placate the serfs. :-) I still have the book as a joke, and as a reminder of why, yet again, I've become a consultant and vow never again to be a wage-slave. I shudder to think about what it costs to print up 20,000 of these shiny black books. If they were trying to buy my loyalty with bull-shit management wrapped in a shiny package, they would have bought more loyalty by simply sending me a check for the printing cost of my little book.

I hear their stock has dropped by 1/3 since the buyout. I'm glad I didn't hang around for the stock options.

How did "900 million" become "1BN"? (0)

SuperBanana (662181) | more than 8 years ago | (#15152135)

The IRS Hits Symantec with a $1 Billion Tax Bill

Okay, I could understand "Product X costs almost $100" if the price is $90; that'a discrepancy of $10, and you qualified it with "almost".

This, however, is a one hundred million dollar round-up, with no qualifier. It's not even "almost." But "billion" sounds cooler, eh?

Re:How did "900 million" become "1BN"? (1)

weasello (881450) | more than 8 years ago | (#15152184)

Well, if you RTFA, you'd see they were slapped with an additional, unrelated $100 million bill for last year's tax returns. :P

And don't forget - these figures do NOT include penalties or interest. O_O

By adding $100M (0)

Anonymous Coward | more than 8 years ago | (#15152207)

Macworld is reporting that the IRS has charged Symantec Corporation with about a 900 million dollar tax bill due to the charge that Symantec and Veritas (purchased by Symnatec last year) under-reported the value of intellectual property which they had transferred to their two Irish subsidiaries. Another $100 million is connected to Symantec's 2003 and 2004 reports.

"a 900 million dollar tax bill" + "Another $100 million" = $1 Billion

Re:How did "900 million" become "1BN"? (2, Informative)

nigelo (30096) | more than 8 years ago | (#15152256)

The last sentence of the summary points out the additional $100M:

"...a 900 million dollar tax bill due to the charge that Symantec and Veritas (purchased by Symnatec last year) under-reported the value of intellectual property which they had transferred to their two Irish subsidiaries. Another $100 million is connected to Symantec's 2003 and 2004 reports."

a billion? (0)

Anonymous Coward | more than 8 years ago | (#15152147)

i thought $1 billion was $1024 million. oh wait. anyone else have the same reaction?

Re:a billion? (1)

Bassman59 (519820) | more than 8 years ago | (#15152232)

No.
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