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US telco Sprint charged for seven years of tax evasion

19 Apr 2012
Gavel

New York State attorney general Eric Schneiderman has filed a $300 million lawsuit against Sprint for deliberately under-collecting and underpaying millions of dollars in state taxes.

Schneiderman attests that the mobile service provider failed to bill customers for more than $100 million over the last seven years. The suit would require Sprint to pay three times its underpayment plus any penalties.

"The message of our office is clear: tax dodging is not acceptable and we will use every tool in our arsenal to make sure that taxpayers’ money is protected, and that honest businesses and consumers are not placed at a disadvantage for collecting and paying their fair share of taxes," said Schneiderman.

The suit alleges that Sprint purposely failed to collect sales tax in an attempt to undercut its competitors. He claims the company knowingly did this by submitting false records and statements to tax authorities.

Sprint, however, has defended their position in the matter. A company spokesperson told V3 that the claims were without merit and the company plans to fight the case.

"We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law," the spokesperson said.

"With this lawsuit, the attorney general’s office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more."

The suit comes as Sprint is looking to move on from a failed network expansion plan with LightSquared.

The two firms had to scrap plans for an LTE broadband network after being informed by US officials that interference from the proposed network hampered GPS systems.

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Shaun Nichols
About

Shaun Nichols is the US correspondent for V3.co.uk. He has been with the company since 2006, originally joining as a news intern at the site's San Francisco offices.

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