Google's $3b tax haven loophole probed

• Google's $3.1 billion tax haven loophole
• How Google Australia escapes the taxman with a little help from Ireland

The US Internal Revenue Service is auditing how Google avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.

The agency is bringing more than typical scrutiny to how the company valued software rights and other intellectual property it licensed abroad, said the person, who requested anonymity because the audit isn't public. The IRS has requested information from Google about its offshore deals after three acquisitions, including its $US1.65 billion purchase of YouTube, the person said. The transfer overseas of these kinds of rights rights has enabled Google to attribute earnings to foreign units that pay lower taxes, Bloomberg News reported a year ago.

Last year Bloomberg said Google had cut its taxes by $US3.1 billion ($3 billion) in the three years prior using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.  Read Here