Government Accountability Office: Two-thirds of U.S. corporations paid no federal income taxes from 1998 to 2005

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WASHINGTON - 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.

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The GAO ... said companies may escape paying such taxes due to operating losses or because of tax credits.

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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.

http://news.yahoo.com/s/ap/20080812/ap_on_...ions_income_tax

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Considering that the majority of corporations are small corporations and thus qualify for Subchapter S or LLC status, the majority of corporate income tax liabilities are paid via an the respective shareholder's individual tax return.

Edited August 12, 2008 by fwaguy