I hope this article will turn on a tax saving light for you. Emulate Google, Dell and Amazon and pay fewer taxes.
Lessons from Google and Dell
If you’re a frequent reader of the International Tax Counselors blog, you’re well aware that I often encourage you, the entrepreneur/business owner, to expect more from your tax team. You need the expertise of a bold, creative tax planning team to help you keep more of your heard earned profits.
How do you know if your tax advisors are doing everything they possibly can for you? Here are four powerful strategies that you should encourage your tax team to do for you:
1) Include the IRS National Office in your tax planning. A business can obtain its private tax law, or guidance from the IRS directly, by applying for a private letter ruling (PLR). Make sure to do your research through the IRS on which issues it grants PLRs and which circumstances it does not before submitting your application.
2) Another way to obtain your private tax law is to write it and push your legislators to enact it merely. Dell is one of the great corporations that invest heavily in lobbying. The computer company typically spends over $2 million per year on lobbying and designs about ten laws a year. This year alone (2014), there are 1,600 lobbyists from Dell trying to influence tax law specifically, according to the latest report from OpenSecrets.org. Dell has lobbied for tax credits for research and development and other areas, according to a 2011 news story by the Associated Press.
Okay, so you don’t have the same budget as Dell for lobbying efforts. But, just like any other American voter and taxpayer, you have the right to lobby your legislators. Don’t forget, they’ve been elected to public office to serve the public. You, the business owners, are crucial to the economy. Communicate with your legislators on how new tax law can help boost your business.
3). Get the IRS to write the regulation explaining a new law to fit your tax plan. The IRS always asks the public to participate. They have an easy-to-use website for this. For more than 30 years, the IRS has accepted the changes that I have requested in the regulations. This link will tell you how to get your private tax law.
4) Guide your business and investment model. Google’s great tax team helped Google decide what to do with its enormous cash reserve. For example, Google $280 million investment into a solar fund in 2011 gave Google an immediate $90 million tax credit plus interest on its $280 million, according to an article in Fast Company. To be tax planning successful, budget 5% of your taxable income to tax planning. Remember, tax planning fees are tax deductible.
Business owners, take the lead from Google on this one. Talk with your tax planning team about your company’s future investments. If you would like to brainstorm your tax ideas, call me, Brian Dooley, CPA, at 949-939-3414 for a free one-hour brainstorming consultation.