It was St. Patrick’s Day this past week, which means one thing for most Americans: green beer, corned beef, and a brief but sincere wish that they had been born Irish.
For tax professionals, however, it means something slightly different: green beer, corned beef, and a brief but sincere wish that the Tax Code contained a four-leaf clover deduction.
It doesn’t. We checked.
The Irish have long had their own approach to taxes — namely, keeping them refreshingly low. Ireland’s corporate tax rate became the stuff of legend (and more than a few Congressional hearings), drawing tech giants and multinationals to Dublin the way leprechauns are drawn to gold.1 Apple, Google, and Facebook all discovered that the Emerald Isle had a pot of gold at the end of its rainbow: a 12.5% corporate tax rate with an even lower effective rate for savvy taxpayers. Apple reportedly paid an effective rate of well under 2% on its Irish profits at one point, a fact that managed to unite American senators and European regulators in shared outrage.2
The vehicle of choice was something called the “Double Irish.”3 No, it’s not a coffee order, it’s a tax structure that allowed multinationals to shuffle profits through Irish subsidiaries and dramatically reduce their global tax bills. Ireland eventually agreed to phase it out following international pressure, but not before it had served its purpose.
Meanwhile, American tax professionals spent this year’s St. Patrick’s Day the same way they spend every other day between January and April: hunched over a stack of documents, subsisting on cold coffee (or maybe a double Irish coffee?), and fervently hoping for the luck of the IRiSh.
So if you happen to find a four-leaf clover between now and April 15, hold on to it. You’re going to need it.
Erin go bragh — and may your extensions be automatic.
