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Much of the cash is held abroad in foreign subsidiaries.
The company could defer these taxes on foreign income by keeping the money abroad in foreign subsidiaries.
Big chunks of this debt could provide a cushion to absorb losses throughout the organisation, including those in foreign subsidiaries.
Today U.S. multinationals have more cash stashed overseas than ever before –according to several estimates, companies have more than $1 trillion in profits squirreled away in foreign subsidiaries.
Hanlon said corporations behave the same way, noting that the current system encourages businesses to keep cash in foreign subsidiaries to avoid paying taxes on earnings brought into the country.
Where capital rules apply to a U.S. entity, haircuts may be imposed on its equity in foreign subsidiaries to recognize the greater risk they may pose due to their unregulated conduct.
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Wal-Mart is conducting its own internal investigation into the Mexico allegations, and the company suggested in May that it was examining potential misconduct in other foreign subsidiaries.
Brazil, Russia, India, and China accounted for 47.5% of the new jobs that U.S. MNCs created in their foreign subsidiaries from 1999 to 2009.
As head of tax at Electronic Arts, he became a noted expert in using foreign subsidiaries to legally, and sharply, cut a corporation's United States tax bill.
Other French firms fall under a territorial tax system, in which foreign subsidiaries are taxed by the country where they are based.As with many of Mr Sarkozy's cunning plans, Brussels suspects foul play.
The F.D.I.C. asks another bank what will happen to assets that are effectively trapped in its foreign subsidiaries, and the bank assumes that everyone will coöperate and money will flow freely across borders.
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