Romney as Audit Chair Saw Marriott Defy IRS (Don't try this at home!)
Romney as Audit Chair Saw Marriott Son of BOSS Shelter Defy IRS
By Jesse Drucker - Feb 23, 2012 12:01 AM ET
Mitt Romney has long had close ties to hotel operator Marriott International Inc. (MAR) The candidate for the Republican presidential nomination, whose full name is Willard Mitt Romney, was named after the chain’s founder, J. Willard Marriott, a friend of his father. He joined the company’s board in 1993, and has served on it for 11 of the past 19 years, including six as chairman of the audit committee.
During Romney’s tenure as a Marriott director, the company repeatedly utilized complex tax-avoidance maneuvers, prompting at least two tangles with the Internal Revenue Service, records show. In 1994, while he headed the audit committee, Marriott used a tax shelter known to attorneys by its nickname: “Son of BOSS.”
A federal appeals court invalidated the maneuver in a 2009 ruling, siding with the U.S. Department of Justice, which called Marriott’s transaction and attempted tax benefits “fictitious,” “artificial,” “spectral,” an “illusion” and a “scheme.” Marriott had argued the plan predated government efforts to close such shelters.
Employing another strategy, Marriott legally avoided hundreds of millions of dollars in income taxes thanks to a federal tax-credit program criticized and allowed to expire by Congress. Marriott has also shifted profits to a Luxembourg shell company. During Romney’s years on the board, Marriott’s effective tax rate dipped as low as 6.8 percent, compared with the federal corporate statutory rate of 35 percent.
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http://www.bloomberg.com/news/2012-02-22/romney-as-auditing-chairman-saw-marriott-son-of-boss-tax-shelter-defy-irs.html