Golf Carts to Island Divorces: 10 Notorious Tax Loopholes

By Karen Fickes and Warren Joseph of Bloomberg BNA - 2012-06-20T21:55:57Z

Photograph by Ned Therrien/Getty Images

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Black liquor

"Black liquor," a byproduct of the wood pulping process, has been used by paper companies to power mills for decades. In 2007, a change to a law promoting the use of alternative fuel inadvertently entitled paper companies to a 50c per gallon tax credit for using black liquor. International Paper Co. reported a 93 percent increase to 2009 first-quarter net income, thanks to a $540 million black liquor credit. The potential value of credits if allowed to remain in force was estimated to be as high as $25 billion. Although Congress closed the loophole in 2010, paper companies were allowed to keep their windfalls for prior years.