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Forensic Accounting, Forensic Techniques, and Fraud Detection Copyrighted 2001 D. Larry Crumbley, ... - page 318 / 352

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© D.L. Crumbley

Fraud vs. Avoidance

U.S. companies paid Caltex excessive amounts for Indonesian Crude Oil ($4.55 per barrel).

Therefore, excessive dividend income, with foreign tax credits and cost of sales deductions on U.S. income tax returns.

To compensate Caltex for the extra taxes it paid, Indonesian Government provided Caltex with oil in excess of the amount called for under the formal production-sharing contract.

Total Federal and State taxes avoidance of $8.6 billion and $433 million.

Source: J.D. Gramlich and J.E. Wheeler, “How Chevron, Texaco, and Indonesian Government Structured Transactions to Avoid Billions in U.S. Income Taxes,” Accounting Horizons, June 2003, pp. 107-122.

Chevron

Texaco

Caltex (Indonesian companies)

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