Verizon accused of dodging taxes by CWA and Citizens for Tax Justice

Verizon (NYSE: VZ) is once again facing another debacle with the Communications Workers of America (CWA), which has accused the telco of not paying its taxes over the past three years.

The CWA's statement is part of a new report called "Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodging and Subsidies," which the union will unveil during a joint press conference it is holding today with Citizens for Tax Justice and Good Jobs First.

CWA is basing its argument on a new report released by the Citizens for Tax Justice and Good Jobs First, which found that 78 out of 280 corporations analyzed did not pay federal taxes in at least one of the past three years.

"Verizon has proven itself to be one of the worst offenders, manipulating state revenue rules, seeking economic development subsidies, and structuring its business and tax affairs to produce a negative federal income tax rate," said the CWA in a media advisory. "Verizon has received state and local tax subsidies in at least 13 states."

In addition, the reports cite Verizon's use of Reverse Morris Trusts to offload its rural wireline assets to other telcos including Frontier (NYSE: FTR) and FairPoint Communications (Nasdaq: FRP). FairPoint was driven into bankruptcy over its inability to handle the debt load and customer issues it gained from purchasing Verizon's New England wireline assets.  

Of course, Verizon refutes the tax dodging claims in a statement.

"Verizon paid out $1.79 billion in taxes over 2008-2010, and reported earnings of $5.25 billion over this same period. In addition, Verizon has annually invested $16.5 billion in technology infrastructure. This investment has created and sustained jobs, so U.S. economic development policy allows for the payment of some taxes to be deferred. The CTJ treats deferred taxes as non-existent, it does not account for the $1.79 billion in taxes Verizon paid out over the past three years despite deferrals, and it incorrectly calculates earnings for Verizon to include income belonging to Vodafone, Verizon's partner in Verizon Wireless."

This battle between the CWA and Verizon comes as the telco has asked its unions for a number of concessions over healthcare and sick time. After neither side could come to an agreement, the service provider's 45,000 union workers went on strike in early August.

Although union employees returned to work in late August, the unions and Verizon have yet to finalize a new labor contract.

For more:
- here's the CTJ statement

Special report: Verizon strike: Full coverage

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