The Internal Revenue Service is investigating a whistleblower's allegations that Rabobank Group engaged in transactions with Newell Rubbermaid Inc. and other U.S. companies that were solely designed for the U.S companies to avoid taxes, the Wall Street Journal reported.
The Journal said Newell sold accounts receivable at a discount beginning in 2001 to a newly created overseas company funded by Rabobank, a Dutch bank. Newell took a tax deduction for the discount.
"As long as Newell didn't control the overseas company, any cash left over after paying Rabobank wasn't taxed in the U.S. Newell says Rabobank controlled the entity," according to the Journal.
A former Rabobank executive reported the tax fraud to the IRS last year and may be eligible for a reward under the new tax fraud whistleblower law if the IRS recovers any funds.
