Skip to main content

Tax Administration: Comparison of the Reported Tax Liabilities of Foreign- and U.S.-Controlled Corporations, 1998-2005

GAO-08-957 Published: Jul 24, 2008. Publicly Released: Aug 12, 2008.
Jump To:
Skip to Highlights


Concerns about transfer pricing abuse have led researchers to compare the tax liabilities of foreign- and U.S.-controlled corporations. (Transfer prices are the prices related companies charge on intercompany transactions.) However, such comparisons are complicated because other factors may explain the differences in reported tax liabilities. In three prior reports, GAO found differences in the percentages of foreign-controlled and U.S.-controlled corporations reporting no tax liability. GAO was asked to update the previous reports by comparing: (1) the tax liabilities of foreign-controlled domestic corporations (FCDC) and U.S.-controlled corporations (USCC)-including those reporting zero tax liabilities for 1998 through 2005 (the latest available data) and (2) characteristics of FCDCs and USCCs such as age, size, and industry. GAO analyzed data from the Internal Revenue Service's Statistics of Income samples of corporate tax returns. GAO does not make any recommendations in this report. In commenting on a draft of this report, IRS provided comments on technical issues, which we incorporated into this report where appropriate.

Full Report

Office of Public Affairs


Comparative analysisCorporate auditsCorporationsFinancial managementFinancial statementsForeign corporationsIncome taxesInternational relationsLiability (legal)LossesNoncompliancePrices and pricingProgram abusesProgram evaluationProgram managementReporting requirementsTax administrationTax creditTax information confidentialityTax returnsTaxesTaxpayers