Carl Levin

The Treasury might be able to fix some of these problems if it would reform check-the-box, develop regs making it easier for the IRS to go after shell corporations that are used for tax avoidance.

So that many corporations, including many of our most profitable corporations, pay no taxes. Is that correct?

Is the purpose of your regulation that they meet arm's-length standards?

Now, is that true even if the assets are totally controlled by the parent?

This is the first time that we have ever come across entities that have no tax residence.

You would agree it is correct.

Active income deferred, passive income was not supposed to be deferred. Is that correct?

We cannot continue a system where the company, a multinational company, as phenomenally successful as yours, and deservedly so, can make a decision, sitting down in 2008 and 2009, as to where the profits are going to flow.

We have to change this system. But in order to change it, we have to understand it, not deny it.

The result of continuing that in 2008 and 2009 is most of your profits worldwide are now in three Irish companies that you control that do not pay taxes.

The facts are mighty clear to me that loopholes in our tax laws and regulations allow many companies, including Apple, to shift enormous amounts of income from this country to other countries where they pay little or no tax.

And the pricing, when you look at the facts and circumstances, is it also the value of what is transferred?

If a shell entity is incorporated in a foreign tax jurisdiction, can it be disregarded for U.S. tax purposes?

I think the obligation of the Treasury Department here is to ensure that laws that are passed are implemented in the way that Congress intended them through regulatory activity; and, second, where there are problems that arise, to propose…

Do we have or do you have an obligation to stop multinational corporations from shifting income to tax haven jurisdictions?

Somehow or other you have to figure out, if there were an arm's-length deal here, what would be shifted.

It is not right, to leave that decision, it seems to me, the way it is decided so unilaterally, that a company can shift its value to a place---to a tax haven, which is what Ireland is.

You made a decision, which you have a right to do, not to bring that money home.

You are going to pay--Apple Inc. is going to pay the taxes on the income for all the parts of the world except for where two-thirds of the profits are created.

That agreement did two things: it shifted the economic rights, the way they had been shifted before, 30 years ago.

You have a right to do that just the way you had a right not to shift that intellectual property for Mexico, Canada, and South America.

Is it true that you are not going to bring them home unless we reduce our tax rates?

You have an agreement which shifts the economic rights, the most valuable thing you have, to three Irish companies that pay no taxes.

I could not disagree with you more. Of course you shifted something, the most valuable thing you have.

Is that an arm's-length agreement?