Verizon’s Taxes Are Appropriately Disclosed

“Verizon’s Deferred Tax Liabilities Too High?” (Jan. 20) includes comments from uninformed sources whose broad answers to hypothetical questions are used to impugn Verizon Communications Inc.’s accounting for deferred taxes.

Verizon has several categories of deferred taxes that affect the timing of tax payments. For example, to incent infrastructure investments and create jobs, U.S. tax law gives companies the flexibility to accelerate depreciation expenses, for tax purposes, rather than spread these expenses out evenly over time. As your article conspicuously fails to make clear, this results in the same total amount of depreciation and income tax benefits over the life of the asset.

This is a different issue from what your headlines say the story is about: whether adequate and appropriate tax expense was recorded in the company’s income statements in current and prior years or whether this will have a negative impact on future earnings.

In Verizon’s case, our income statements reflect both current tax and deferred tax expense. In addition, our annual financial statements appropriately disclose both the components of current and deferred tax expenses, as well as our deferred tax assets and liabilities. Our financial statements at all times have been in strict compliance with Generally Accepted Accounting Principles.

Your sources also suggest, using Enron Corp. as an example, that there has been, or can be, manipulation of balance sheet liabilities.

We resent that you tried to sensationalize your coverage by juxtaposing quotes that don’t relate to Verizon.

Dave Benson

Senior Vice President

and Controller

Verizon Communications

New York