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Why? Uber has shown they're a terrible company when it comes to following regulations. Look the IRS is a revenue generating organziation. Saddling Uber with a

Why? Uber has shown they're a terrible company when it comes to following regulations. Look the IRS is a revenue generating organziation. Saddling Uber with a 100 billion dollar tax bill will get them a bankruptcy proceeding and $0. Finding a way to collect some percentage of what's past owed and then having them pay, at least, payroll taxes moving forward can bring hundreds of millions of dollars into the IRS's coffers. I'm not a huge fan of Uber's business practices either but killing them does the IRS no good.

toomuchtodo 11y ago
And if Uber's entire business model is predicated on them avoiding taxes, then killing Uber doesn't matter to the IRS. If most corporations can avoid taxes other than payroll, why would Uber be any different? They're a tech company! Their only expenses are HQ/on the ground labor, server/storage operating expenses, and whatever real estate they have in the US (with most of it in SF).
dragonwriter 11y ago
> Saddling Uber with a 100 billion dollar tax bill will get them a bankruptcy proceeding and $0. OTOH, it will also discourage future violations of the same kind, because people don't generally start businesses to lose the time and resources poured into it just for the joy of denying the IRS taxes. So, even though it may not be optimal on a narrow view, it may be desirable on a longer view. Corporate tax evasion is motivated by profit, and as long as it is more profitable to break the law and make a partial settlement later, businesses will be encouraged to do it. It if it is catastrophically not profitable to do that, the incentives are different.
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CJefferson 11y ago
I don't think the IRS cares that much about losing the income from Uber. On the other hand, killing Uber would send a strong signals to other companies to follow the law.
TheCoelacanth 11y ago
Doesn't tax debt have seniority to all other creditors? So if Uber went bankrupt because of back taxes the IRS would either receive all back taxes in full with the remainder going to the other creditors/investors or they would receive all of Uber's assets and everyone else would get nothing.

toomuchtodo 11y ago

And if Uber's entire business model is predicated on them avoiding taxes, then killing Uber doesn't matter to the IRS. If most corporations can avoid taxes other than payroll, why would Uber be any different? They're a tech company! Their only expenses are HQ/on the ground labor, server/storage operating expenses, and whatever real estate they have in the US (with most of it in SF).

dragonwriter 11y ago

> Saddling Uber with a 100 billion dollar tax bill will get them a bankruptcy proceeding and $0. OTOH, it will also discourage future violations of the same kind, because people don't generally start businesses to lose the time and resources poured into it just for the joy of denying the IRS taxes. So, even though it may not be optimal on a narrow view, it may be desirable on a longer view. Corporate tax evasion is motivated by profit, and as long as it is more profitable to break the law and make a partial settlement later, businesses will be encouraged to do it. It if it is catastrophically not profitable to do that, the incentives are different.

deleted 11y ago
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CJefferson 11y ago

I don't think the IRS cares that much about losing the income from Uber. On the other hand, killing Uber would send a strong signals to other companies to follow the law.

TheCoelacanth 11y ago

Doesn't tax debt have seniority to all other creditors? So if Uber went bankrupt because of back taxes the IRS would either receive all back taxes in full with the remainder going to the other creditors/investors or they would receive all of Uber's assets and everyone else would get nothing.