Hard to say before the courts decide.
I've personally been through such disputes with tax authorities and prevailed.
I've personally been through such disputes with tax authorities and prevailed.
At best it's indicative of bad accounting, but for a company like Activision Blizzard and at that amount that seems unlikely.
Choosing not to prosecute (especially because prosecuting tax fraud requires proof of willfulness) and simply collecting a tax deficit is pretty common, especially in cases of corporate tax evasion.
The disagreement in this case is called a tax deficit, and is what I meant by wrong. It's also the first necessary part of tax fraud.
EDIT: Also, if you read about the source of the $345 million tax bill (from the article), it's hard to see how this would've been a problem with "unclear phrasing"...
Just like FDSGSG wrote above, I went through a sizeable tax dispute (for an individual, outside of the US) and won. I have a good understanding of tax law yet it was nothing more than a bullshit money grab. No merit, nothing. More along the line; that's a very nice outcome for you but we don't really like it -- so pay up regardless. Like trying to shake a tree.
In this case, I can imagine for Activision (as a publicly traded company) it is better to settle a case for an OK amount than take it to court and run through the process. You have to make a risk reward analysis of whether it's worth spending time and resources on.
I wish both you and the thread OP would stop comparing this to A) personal (or small business) tax disputes and B) tax disputes that resulted in no additional tax liability. This dispute did result in additional tax liability.
And aside from wrong, the fact that they've agreed to pay a fine of $345 million means it was probably illegal. If they just phrased something wrong they could probably just correct the phrasing, and, more importantly, I think they probably tried really hard to get the phrasing right when transferring billions from one company to another.
I own offshore companies and minimize my tax burden, but let's call a spade a spade.
With tax laws being so complicated these disputes are everyday stuff for anyone engaged in any "unusual" activities.
Though there are a bunch of unanswered questions in a lot of jurisdictions: How do you treat a fork?
Is it income? A dividend? A stock split? A spinoff? Some of these require the originator to file paperwork, and no crypto chain could possibly do that.
And what initial value? $0? Day1 trading value?
Guess what happened - a year later they decided it wasn't ok, and of course the letter they wrote was worth as much as toilet paper in the court. It took 5 more years and a very decent amount of money to fight against it and finally get them to admit they were wrong and there is no issue. But of course no one will give you 5 years of not being able to run your business back.
I did not mind paying the taxes, I did however mind the authorities trying to defraud me into paying non existent tax liabilities. They've since been forced to stop doing that.