ChevronTexaco Reportedly Evaded Taxes

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ChevronTexaco Reportedly Evaded Taxes

SAN FRANCISCO -- ChevronTexaco Inc., the world's fourth largest oil company, evaded more than $3 billion in federal and state taxes from 1970 to 2000, The New York Times reported.

In a research paper recently completed by two accounting professors, the integrated oil concern avoided paying $3.25 billion through a complex petroleum pricing scheme that involved a project in Indonesia.

"What we believe is that the evidence is there that fraud exists," said Jeffrey Gramlich, a visiting professor at the University of Michigan and one of the two authors. "The national office of the IRS settled for far less -- something like a quarter on the dollar -- than what is really owed."

ChevronTexaco told the newspaper that the report was a rehash of old issues already settled with the Internal Revenue Service.

Accusations against the former Chevron Corp. were first leveled in the early 1990s by the IRS district office in San Francisco. The company agreed at the time to pay $675 million, two-thirds of the $1 billion the company set aside as a reserve in case it lost the case. That settlement covered the years 1979 through 1987.

While the IRS district office continued to probe allegations of further tax evasion, the IRS headquarters in Washington overruled the district office, ending the investigation.