Walmart dodged up to $2.6 billion in US tax through a “fictitious” Chinese entity, former executive says

If the IRS took Walmart to court, it would have a good shot at recovering at least some of the $2.6 billion, tax experts said. “I think there is a good argument based on the facts presented by the whistleblower that the structure actually does not work [as a means of avoiding US tax],” said Omri Marian, a tax-law professor at the University of California, Irvine. He added that he couldn’t be sure of the strength of any legal challenge, since the files don’t include the legal opinion commissioned by Walmart, which, the former executive’s memo says, argued the structure would hold up in court.

While the structure might not stand up as a tax-avoidance mechanism, there’s no allegation that Walmart broke US law, since tax avoidance on its own is not illegal. An IRS spokesperson declined to comment

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