Vanguard Owes $34.6 Billion in Taxes

Oct 2, 2015

  1. DHK

    DHK Guru

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    Whistleblower's expert says Vanguard owes billions in back taxes - philly-archives

    Vanguard's low expense fees may be coming to an end.

    "A tax expert retained by former Vanguard Group tax lawyer David Danon in his whistle-blower complaints against the mutual fund giant has sent the IRS a report estimating the company's unpaid federal income tax liabilities at $34.6 billion from 2007 to 2014."

    "Danon says Vanguard has been able to charge lower fees by underpaying its income taxes."

    I didn't know this about Vanguard... but the investors of Vanguard shares... ARE the owners of Vanguard! I predict a large class-action lawsuit to represent client/owner interests.

    So much for John Bogle's "Battle for the Soul of Capitalism".


    Perhaps the day will come where people will ask:
    - "Are you a fiduciary advisor?"
    - "No, I have a higher standard than that. I'm an insurance agent."
    DHK, Oct 2, 2015
  2. BNTRS

    BNTRS Guru

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    The original complaint was filed a little over two years ago and takes issue with some pretty complex tax laws in the United States.

    Frankly, it's somewhat disappointing that such laws would affect the operation of a company such as Vanguard for providing its service at its pricing levels. Or at least on the face of things that's an easy knee jerk reaction.

    The guts of the complaint dive into much more intricate detail about Vanguard's intentional belief that it more or less structured itself from inception as an entity that could avoid paying income tax given it's business model. There are additional ramifications for foreign business interests and how it's model might circumvent taxation there as well.
    BNTRS, Oct 5, 2015