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Exxon loses cases that would've earned it a $1.3 billion tax refund for no apparent reason [1]
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Date: 2022-08-04
Exxon CEO Darren Woods and his ilk gloated about the company's economic success, so it's curious that the company would so intensely pursue a tax break equivalent of just under 6% of the company's Q2 earnings this year.
ExxonMobil on Wednesday lost a case against the U.S. government over its claims that the IRS owed the company a $1.3 billion tax refund. The case, which dates back more than half a decade, hinges on Exxon’s claims that it overpaid income taxes from 2006 to 2009 on operations in Qatar and Malaysia that the company initially claimed were mineral leases, but later revised as sales. The back-and-forth between the government and the oil giant resulted in the IRS fining Exxon $200 million for claiming an excessive refund. Exxon paid the penalty—which was eventually overturned—but also never backed down and continued its tactics, which the Fifth Circuit Court of Appeals readily called out in its ruling.
“Exxon is not the only oil company making this argument. Its gambit is the latest installment in a series of nearly identical claims that companies have filed nationwide,” the circuit judges wrote. “We join the unanimous chorus—judges who comprise two courts of appeals and three district courts (9-0 for those keeping score)—to hold that Exxon’s credit reduced its excise-tax liability such that it can only deduct the excise tax it paid out of pocket.”
Why would a company that readily boasted $17.9 billion in earnings in the second quarter of 2022 alone advocate so fiercely for a tax return? Easy. Greed.
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