Ford Sues The Taxman
It's no secret that when strapped for cash the Detroit automakers often turn to Uncle Sam. Typically, these efforts involve a bailout, loan guarantees or tax breaks. But the Detroit News reports that Ford is trying a new method of squeezing cash from the feds: suing for overtaxation. Last Thursday, FoMoCo filed suit against the IRS seeking over $445m in interest on taxes it overpaid between 1983 and 1989, and between 1992 and 1994. There's no dispute from the IRS that Ford overpaid its taxes in those years, but… "We believe the IRS failed to pay the correct amount of interest," said Ford spokeswoman Marcey Evans. "We tried to resolve it at the administrative level without success. Because of the size of the amount and the dispute, we had no choice but to file." And having backed away from its promise to restore profitability by 2009, Ford could sure use a few hundred mil right about now. If Ford wins this lawsuit, it could cement its status as the best-positioned American automaker during the next several years. Then again, when that distinction is being earned by lawsuit, you have a good sense of how screwed American automakers really are.
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I think "desperate measures" is more like it.
Wow. If Ford's accountants are so bad that they are trying to collect money from the 80's maybe they've really been making money all this time! Better check those numbers again Ford.
Sounds like the only one positioned to win are the lawyers.
I've read the complaint. Based on its legal reasoning, it will be interesting to see how the IRS responds. Basically Ford, like most large corporations, gets audited on an ongoing basis. Final tax positions can take many years to sort out, so Ford wouldn't necessarily have been sitting on this for too long after the IRS finished, but before deciding to file. The relevant statute of limitations for claiming overpayment interest is six years under the US code (not the internal revenue code). The only way to protect the statute for such issues is to file suit, and these cases can take years to conclude. I don't think I'd be looking for that $445 million to be enriching Ford's coffers anytime soon.