A Senate panel Thursday accused Hewlett-Packard of using offshore units to avoid U.S. taxes on billions of dollars, taking advantage of loopholes.
The Senate's Permanent Subcommittee on Investigations said tax avoidance in the technology sector was rampant, with companies using intellectual property, royalties and license fees in tax havens to skirt taxes in America.
The report pointed to HP, accusing the company of shifting billions of dollars between two offshore subsidiaries, thus avoiding paying taxes.
"The tax practices and gimmicks range from egregious to dubious validity," said Michigan Democratic Sen. Carl Levin. "What these gimmicks do is shift the burden of taxes to citizens that don't use armies of lawyers and accountants and subsidiaries to lower their tax bill."
Sen. Tom Coburn, the top Republican on the panel, said, "Our report is about the symptoms of the disease, not the real disease."
But HP spokesman Michael Tackler said the company was "disappointed to see what appears to be a politically motivated attack on one of America's largest employers."
Reuters reports that U.S. companies have at least $1.5 trillion in profits offshore, most of them saying the profits are kept there to avoid U.S. taxes. Of the top 10 companies with the largest amounts of cash abroad, five are tech companies.