American tax officials

Chapter 316 The Long-Awaited Court Hearing

After Keppert left, David's phone rang. He picked it up and saw that it was Donald calling. He immediately answered, "Deputy Director Donald."

"David, the Amazon incident has had a huge impact this time. Major media giants have put a lot of pressure on us. Our headquarters has discussed it and decided to allow the media to enter, so that he can see our fair and transparent ruling!"

Previously, the IRS did not allow the media to enter the courtroom because many cases were difficult to prosecute through legal procedures. In order to avoid controversy from the outside world, they chose to conduct closed trials.

However, this time, the issue of hidden taxes alone is enough to seal Amazon's fate, so holding a public trial would be more beneficial for the IRS in terms of both its image and public opinion.

"Understood, I'll arrange it right away!"

After hanging up the phone, David immediately handed Kepper over and instructed him, "Tell the media that this trial will be broadcast live!"

The entrance to the Los Angeles IRS office.

A staff member responsible for speaking came forward and addressed the media: "Please be quiet and listen to me. To ensure the fairness and openness of this trial, it will be broadcast live. I will now select a few media personnel who will be entering the courtroom shortly..."

"What? The IRS is actually broadcasting this live in public this time."

"This is fantastic! We'll get to hear firsthand about the tax irregularities Amazon committed, and we'll also get to see the embarrassing state of Amazon's top executives!"

"The fact that the Los Angeles IRS dared to broadcast it live means they must have plenty of evidence. Amazon is in deep trouble this time!"

The announcement by the Los Angeles IRS officials caused an uproar among the media and people on social media.

If you ask them if they want to see live footage of the court proceedings, they'll likely be disappointed.

That's certainly what I'd like to think about.

And what do they most hope to see?

Of course, it was the demeanor and appearance of Jeff and other senior executives of Amazon after the charges were confirmed.

Let them see if these once high and mighty figures will be terrified and humiliated when they are convicted and may even end up in prison.

While the media and the public were still discussing it, the top executives at Amazon also received the news, with Jeff's face turning terribly dark.

He came here in person and even asked to see David, but David not only refused to see him, but also signaled to the media that he could enter the venue for a live broadcast. What does this mean?

This means that the Los Angeles IRS, while not 100% certain of convicting them, is at least 80-90% certain. This is a huge problem!

He has experienced countless ups and downs in his life, but he believes that the current situation may be the biggest crisis of his life!

After a few minutes of silence, Jeff finally took out his phone, then went to a corner and quietly made several calls...

The time has come to 12:20.

Today's court hearing is scheduled to begin at 12:30, and there are still 10 minutes until then, so a large number of invited people have already entered the courtroom on the seventh floor.

At this time, the media invited to the site for live streaming had already set up their cameras and were ready to broadcast everything live.

At 12:25, David, who had just come out of the judge's office, also arrived at the scene.

He glanced around the gallery and noticed that there were quite a few important figures from the political and business worlds present today, including California Governor Bogwana, the Lieutenant Governor, the Secretary of State, and members of both houses of Congress.

His gaze finally fell upon the group from the Amazon Group sitting in the lower right corner. These people made no attempt to avoid meeting his eyes, with Jeff's gaze being particularly gloomy, and upon closer inspection, one could even detect a hint of resentment.

David didn't pay much attention to it and went straight to the audience seats belonging to the Los Angeles IRS.

When the time reached exactly 12:30, Nicola, dressed in a judge's robe, walked out from the right-hand passage, and everyone present stood up as per procedure.

"Bang! The trial for Amazon's alleged tax evasion is now in session!"

As Judge Nicola brought down her gavel, the audience and the onlookers immediately became completely absorbed.

"Now, let's have the Los Angeles IRS, the plaintiff, speak!"

David stood up from his seat, took a document, and walked to the front of the table. He said, "As we all know, Amazon has not paid a single penny in taxes all these years, but I think many people don't know how they did it. I feel it's necessary to explain. First, they relied on a policy called 'Value Added Tax Reduction,' which, as the name suggests..."

"So that's how it is..."

"Thanks to Director David's explanation, I finally understand Amazon's tax avoidance tactics..."

After his explanation, those at the scene and those watching the live stream who were not very clear about taxes finally understood.

They say that the reason Amazon has been able to avoid paying taxes for so many years is because it has been exploiting this policy.

"Okay, now for the important part. Value-added tax reduction is indeed a tax policy of our State Taxation Administration. If companies use it to evade taxes according to the procedures, our State Taxation Administration will collect a lot less tax, but we won't mind. However, if a company clearly does not meet the standards for value-added tax reduction, but insists on using this policy illegally for several years, our State Taxation Administration can't keep suffering losses like this, can it?"

David's words caused quite a stir both at the scene and online.

"Some companies have been illegally using the VAT reduction policy even though they have not met the standards." Who else could this refer to but Amazon Group, which is currently being sued?

On the defendant's side, no one noticed that the members of Amazon's legal department, including Lakluva, all looked somewhat unnatural.

As the group's legal department, they were well aware of how the group avoided taxes, and this value-added tax reduction accounted for exactly 40% of the group's tax reduction.

But then again.

After the Los Angeles IRS announced that it would investigate them, they have been working overtime day and night to deal with the problem. Could it be that they have been caught red-handed?

Ignoring what they were saying, David held up the documents in his hand and said, "Your Honor, I have an investigation report here that proves that from 2017 to the present, Amazon has been illegally using this policy, and through this policy, they have evaded at least nearly 10 billion US dollars in taxes!"

"They evaded nearly 10 billion US dollars in taxes..."

Upon hearing such a figure, those in the audience and those watching the live stream couldn't help but gasp in shock.

The document was quickly presented to Nicola. After carefully examining it for ten minutes, she turned to the defendants, including Lacruyne, and questioned, "Defendant's representative, according to this report from the Los Angeles IRS, Cincinnati, Ohio, Montpellier, Vermont, and... these places claim that their VAT deductions did not meet the local government's standards. How do you explain this?"

"Your Honor, I would like to see this document."

"Can."

The documents were quickly taken by court staff and handed to Lakrue, who, along with the entire legal department, immediately began to examine them carefully.

But as the contents gradually came into view, their expressions became extremely grim.

Although they have been dealing with this matter for some time now.

However, there is a very important provision in the value-added tax reduction policy, which is that the factory's equipment and facilities must meet the local government's requirements.

A large portion of the equipment and facilities involved must be ordered in advance from certain companies in order to ensure delivery.

But in such a short time, how could they possibly make a reservation or even have the goods delivered to them?

The real problem is that David somehow obtained detailed data on these regional factories. If they wanted to argue, they could simply send someone to the local factories to verify the data. So, they have no way to argue.

At this moment, Lakluva was utterly despondent. He turned to look at the audience seats where the group's senior executives were located and shook his head slightly.

Although Jeff and the others hadn't seen the report, they understood what was going on after seeing Lakrue's behavior.

This report is definitely hard to refute, and their group's first charge has most likely been proven true!

"So, defendant's representative, do you have any objections to this document report?"

Upon hearing Nicola's question from the stage, Lakruva and the others exchanged glances. Finally, Wilbur spoke up: "Your Honor, regarding the VAT reduction policy, we have primarily been coordinating with the state governments. I believe the IRS is not sufficiently familiar with the details and should temporarily suspend the discussion so we can negotiate with the states..."

This was a solution Wilbur came up with after racking his brains.

The reasoning is quite simple: each state has its own tax system, and the key details of this policy were indeed negotiated between them and the state governments. If they could define it as falling under the jurisdiction of the state government, they might be able to resolve the issue peacefully, rather than having it used by the IRS as an excuse to accuse them.

Each state in the United States has independent jurisdiction, and the same applies to taxes. This argument is not unreasonable, so Nicola did not directly refute it, but instead looked at David.

"Your Honor, I acknowledge that there is some merit to what the defendant's representative has to say, but there is no need to set it aside, since I have already invited tax auditors from these states. Let them testify in court."

Upon hearing that David had even invited tax auditors from various states, Wilbur Lacruy was utterly devastated.

The fact that they were able to invite these people over means they must be confident in getting them on their side. So their attempt to pin the VAT reduction on the state government and downplay the issue is likely to fail.

"Alright, then please have them come out."

Soon, IRS inspectors emerged from the passage on the left, accompanied by four other people.

When the four arrived at the scene, the one in the lead spoke first: "Your Honor, I am Morata, a tax auditor for the Ohio State government."

"Your Honor, I am Luke Wu, the tax auditor for the State of Vermont."

"Your Honor..."

After the four introduced themselves, Nicola spoke up, "Four auditors, we have a document here concerning Amazon's alleged irregularities in value-added tax deductions in your state. What are your thoughts on this?"

Court staff took the documents and handed them to Morata, while four tax auditors carefully examined them.

After reviewing the report, Morata spoke first, saying, "Your Honor, according to this report, Amazon has indeed failed to meet the VAT reduction targets in our state."

"The same judge would not meet the standards in Vermont as well."

"..."

After reading the report, all four agreed on the same story.

"Very well, according to the Amazon representative, the details of the VAT reduction were agreed upon with your respective state governments. This matter should be discussed and negotiated with your respective states. What's your opinion?"

Upon hearing Nicola's question, Morata immediately replied, "Your Honor, regarding the VAT reduction policy, Amazon did indeed reach a detailed agreement with our state, but this is a tax policy issued by the IRS, which has jurisdiction. Moreover, the IRS is far more professional in tax jurisdiction than our state tax departments, so I believe it should be handled by the IRS."

"Your Honor, I share the same view as Auditor Morata. First, this is IRS policy, and the IRS has jurisdiction over it. Second, this is the result of an IRS investigation, so we should not interfere."

"..."

The auditors from the four states spoke in turn, and their statements were all consistent: the matter should be handed over to the IRS, which absolutely had jurisdiction.

"So, you're saying you're willing to hand over full jurisdiction to the Los Angeles IRS? Are you sure?"

Nicola confirmed again.

"We confirm!"

The four answered in unison.

"good!"

Nicola turned to Lakluva and the others, and asked, "Representatives of Amazon, now that the states have acknowledged the alleged irregularities in your VAT reduction policy and are willing to transfer jurisdiction to the IRS, do you have anything else to say?"

Upon hearing that David had summoned the state auditors, Wilburakroy and the others knew it was hopeless, so what could they say? They all lowered their heads and fell silent.

(End of this chapter)