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Most companies in US avoid federal income taxes
Tax | 2008/08/12 08:48
Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.

The GAO study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits.

More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.

The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S.

Dorgan and Levin have complained about companies abusing transfer prices — amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.



US court won't resurrect lawsuit in CIA leak case
Political and Legal | 2008/08/12 08:43
A federal appeals court has refused to resurrect a lawsuit that former CIA operative Valerie Plame brought against members of the Bush administration.

Plame accused Vice President Dick Cheney and several former high-ranking administration officials of revealing her identity to reporters in 2003. She and her husband, former Ambassador Joseph Wilson, say that violated their constitutional rights.

A federal judge dismissed the case last year on largely procedural grounds. The U.S. Court of Appeals for the District of Columbia Circuit upheld that ruling Tuesday.

The lawsuit named former presidential adviser Karl Rove, as well as Cheney's former top aide, I. Lewis "Scooter" Libby.



Court blocks MIT students from showing subway hack
Court Watch | 2008/08/12 06:45
A federal judge has ordered three college students to cancel a presentation at a computer hackers' conference showing security flaws in the automated fare system used by Boston's subway.

A U.S. district court judge in Massachusetts issued a temporary restraining order preventing the Massachusetts Institute of Technology students from demonstrating at the Defcon conference on Sunday in Las Vegas how to take advantage of the system's vulnerabilities to get free rides.

The Massachusetts Bay Transportation Authority says in a complaint filed Friday that the students offered to show others how to use the hacks before giving the transit system a chance to fix the flaws.



Davis Polk Named Among Best Law Firms for Women
Legal Marketing | 2008/08/12 05:45
Davis Polk & Wardwell was today named a "2008 Best Law Firm for Women" by Working Mother magazine and Flex-Time Lawyers LLC. The annual honor recognizes law firms whose policies take into account the issues that are most important to the retention and promotion of female lawyers.

Davis Polk was selected based on its initiatives in a number of areas, including family-friendly benefits, flexibility, leadership, compensation, and advancement and retention of women.

"Today nearly half of law school graduates are women. Law firms need to make a fundamental shift in their policies by instituting female- and family-friendly benefits as Davis Polk has done," said Carol Evans, CEO, Working Mother Media. "We hope that by recognizing Davis Polk, who has already moved the needle, a paradigm shift will follow."

"We hope other law firms will take notice of Davis Polk's commitment to change, and competition will drive more creative ways to enhance work/life balance and improve the status of women in the profession," said Deborah Epstein Henry, Founder and President, Flex-Time Lawyers LLC. Flex-Time Lawyers is a national consulting firm advising attorneys and legal employers on work/life balance.

Davis Polk is a long-time leader among major US firms in hiring and promoting women. In 1971, Davis Polk became one of the first Wall Street firms to elect a woman partner. Today, it is recognized as one of the most female-friendly firms in The Am Law 100, and its women lawyers lead numerous practice groups and committees throughout the firm.


Judge rules Detroit mayor didn't violate bond
Court Watch | 2008/08/12 03:44
A judge has ruled that Detroit Mayor Kwame Kilpatrick didn't violate bond conditions in an assault case by visiting his sister, who is a potential witness for the prosecution.

Judge Ronald Giles agreed Tuesday with the mayor's attorneys that a no-contact order didn't include Ayanna Kilpatrick. The mayor spent time with his sister during the weekend.

Last week, Giles had sent the mayor to jail last week in a separate perjury case.

Giles had put the mayor in jail Thursday after learning he traveled to Windsor, Ontario, in July without notifying authorities, a condition of his bond in the perjury case. Kilpatrick was released Friday.



Schwarzenegger sues controller to force pay cuts
Political and Legal | 2008/08/12 03:44
Gov. Arnold Schwarzenegger and California's top payroll official are headed for a court fight over the governor's attempt to cut the pay of about 175,000 state employees until lawmakers approve a budget.

A lawsuit against state Controller John Chiang was filed Monday in Sacramento County Superior Court. The suit says the state Constitution and several sections of law prohibit the state from paying full wages without approval of a budget.

The controller, a Democrat whose office is responsible for paying state employees, has balked at carrying out the Republican governor's July 31 executive order cutting employees' pay until a budget for the fiscal year that began July 1 is approved. Lawmakers are divided over how to close a $15.2 billion deficit.

Schwarzenegger directed that the pay of nearly 140,000 rank-and-file employees be cut to the federal minimum wage of $6.55 an hour. About 30,000 management employees would be paid $455 a week, and another 8,000 workers, mostly doctors and attorneys, would get nothing. All those workers would get the remainder of their normal paychecks after the budget is approved.



Retrial begins in Ohio microwave baby-death case
Criminal Law | 2008/08/11 08:39
Jury selection began Monday for the retrial of a woman accused of killing her month-old daughter by burning her in a microwave oven.

China Arnold, 28, is charged with aggravated murder in the 2005 death of her daughter, Paris Talley, and could face the death penalty if convicted. She has pleaded not guilty.

Her retrial in Montgomery County Common Pleas Court comes six months after a judge declared a mistrial in her initial trial, saying new evidence had surfaced to bolster Arnold's innocence claim.

Visiting Judge John Kessler declared the mistrial Feb. 11, just as closing arguments were to begin, after he privately heard testimony from a juvenile who said he was at Arnold's apartment complex the night the baby died.

The judge did not give details about the juvenile's testimony. The Dayton Daily News reported that a man had told defense attorneys his 5-year-old son claimed to have found the baby in the oven and pulled her out. The newspaper said the boy identified an older child as the person who may have put Paris Talley in the oven.

Assistant Montgomery County Prosecutor David Franceschelli called defense claims that someone else may have been responsible a "fanciful" account contradicted by evidence.

Both prosecutors and defense attorneys have been barred by the court from talking publicly about the case.

During Arnold's first trial, prosecution witnesses said she admitted killing the baby by putting her in the microwave.

Arnold did not testify, but defense witnesses said she told them she had nothing to do with the baby's death, didn't know how it happened and had expressed shock when told the child may have been burned in a microwave.

Defense attorney Jon Paul Rion said other people had access to the baby, that people questioned about the case had changed their stories, and that Arnold was intoxicated to the point of blacking out when the child died.



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