Fact check: Do corporations like Amazon, GM, IBM, and Netflix use tax loopholes to avoid paying taxes?

1. Summary of the results

The analyses provide overwhelming evidence that major corporations including Amazon, GM, IBM, and Netflix do indeed use various tax strategies to significantly reduce their tax obligations.

Amazon has been particularly aggressive in tax avoidance. The company avoided approximately $5.2 billion in corporate federal income taxes in 2021, paying an effective federal income tax rate of only 6% despite the statutory rate being 21% ^[1]. Amazon uses credits and loopholes to avoid paying the full statutory corporate tax rate ^[2], and has applied for property tax breaks that could allow the company to avoid paying over $100 million in property taxes ^[3].

General Motors has similarly minimized its tax burden, paying little to no federal taxes despite reaping billions in profits ^[4]. GM's low tax payments are primarily due to a legal tax break that allows companies to use past losses to shield future profits from taxes ^[5]. A comprehensive analysis found that GM was among several corporations that paid little to no federal taxes despite being profitable ^[6].

Netflix faces active scrutiny for its tax practices. The company has been accused of funneling $430 million of its international profits into tax havens while receiving over $1 million in tax relief in the UK ^[7]. French and Dutch investigators searched Netflix's offices as part of a preliminary investigation into tax fraud laundering in 2024 ^[8]. Estimates suggest Netflix moved between $327.8 million and $430 million of its international profits into tax havens in 2018, potentially creating a "double tax benefit" through tax credits ^[9].

IBM's situation involves more complex allegations, including a whistleblower case where IBM was accused of fabricating audit results to coerce the IRS into signing a $265 million software deal ^{[10] [11]}.

The scale of corporate tax avoidance is substantial. Among 342 large corporations studied, the average effective income tax rate was just 14.1% - almost a third less than the statutory rate of 21% ^[6]. Nearly a quarter of these corporations paid effective tax rates in single digits or less, with 55 companies paying effective rates of less than 5% ^[6]. The Treasury Department identified around 100 of the largest corporations that would have otherwise paid an average effective federal tax rate of just 2.6%, with 60% paying less than 1% and 25% paying zero ^[12].

2. Missing context/alternative viewpoints

The original question lacks important context about the legal distinction between tax avoidance and tax evasion. Many of the strategies employed by these corporations are perfectly legal under current tax law. GM's use of past losses to offset future profits, for example, is explicitly permitted by federal law ^[5].

Corporate defenders would argue that companies have a fiduciary duty to shareholders to minimize tax obligations within legal bounds. They would emphasize that these corporations are following existing tax codes and utilizing provisions that Congress intentionally included in tax legislation.

Tax policy experts and government officials benefit from highlighting corporate tax avoidance to build support for tax reform measures. The Treasury Department's release of proposed rules for the Corporate Alternative Minimum Tax demonstrates ongoing efforts to address these issues ^[12]. Recent legislative efforts, including bills to crack down on corporate tax avoidance, show that policymakers are actively working to close these loopholes ^[13].

Accounting firms and tax advisors such as Deloitte LLP (mentioned in the IBM case) profit significantly from helping corporations navigate complex tax structures ^[11]. These firms have financial incentives to maintain the current system's complexity.

The analyses also reveal that some practices cross into potentially fraudulent territory. Netflix's situation involves active criminal investigations ^[8], while IBM faced allegations of fabricating audit results ^[10], suggesting that not all corporate tax strategies remain within legal boundaries.

3. Potential misinformation/bias in the original statement

The original question contains no apparent misinformation or bias. It accurately identifies major corporations that have been documented as using tax strategies to reduce their obligations. The question is factually grounded and supported by extensive evidence from multiple sources spanning several years.

The phrasing "tax loopholes