Companies that keep offshore earnings abroad to avoid high U.S. tax rates have a lot of explaining to do to satisfy not just tax authorities, but also the Securities and Exchange Commission.
The SEC has taken a keen interest lately in how fully and how consistently U.S.-listed companies describe their plans for reinvesting cash generated at overseas subsidiaries. Microsoft and Google, for example, have answered detailed queries from SEC staff over the past few months about their assertions that U.S. operations can be supported by U.S.-generated cash or debt while foreign earnings will remain offshore to be reinvested overseas. Both companies ...