A tip of The Audit’s cap to Bloomberg, which had an excellent investigation last week on a big way corporations avoid paying their fair share of income tax.

Reporter Jesse Drucker, yet another Wall Street Journal ex-pat, investigated Forest Laboratories, maker of Lexapro, which goes to great lengths—literally—to avoid paying taxes.

It involves something called transfer pricing, which is like seemingly all tax issues, arcane and difficult to cover. But they’re also critically important, as evidence by the estimated $60 billion price tag on this one tax dodge. And Bloomberg reports that U.S. corporations have a trillion dollars in profits (most of which is from transfer pricing, not overseas sales, it reports) parked offshore and out of reach of the IRS. The corporate tax rate is 35 percent. You do the math.

Bloomberg does a nice job of making such a complicated and dry issue as interesting as it can get. It traces the revenue from a single purchase of Lexapro in Phoenix around the globe as Forest uses shelters to get out of U.S. taxes. It goes to headquarters in New York and then to Ireland, where Forest has offshored its manufacturing. Ireland has 5 percent of Forest’s workers, but Forest reports 70 percent of its profits to that subsidiary, Bloomberg says.

Apparently all this is without consequence. The IRS has lost a couple of big cases to companies, and Bloomberg reports that a couple of senators say the rules are unenforceable as they stand. But I was amazed that a Forest board member was so frank about what the company is doing:

“You’re attributing to Forest Ireland more bargaining power than probably it actually had, but, you know, that’s life,” Goldwasser said.

From Ireland, Forest sends the profits into a sort of Bermuda Triangle where it’s the tax money that disappears. They go first to a front in Amsterdam to avoid certain Irish royalty taxes. From there they go to a front in Bermuda. All this rigamarole is hugely profitable. Bloomberg reports that it boosted Forest’s profits by about a third last year. Outrageous.

We’ve all heard about tropical tax shelters, but the Dutch front looks like a rich vein on the tax-avoidance beat:

The Netherlands has more than 13,000 such entities “established by foreign multinational corporations for the purpose of channeling financial assets from one country to another,” according to published research by the Dutch Central Bank. More than 12.3 trillion euros ($15.5 trillion) flowed in and out of them during 2008, the Dutch Central Bank said.

Excellent work. We’ll be looking for more like this from Bloomberg and the rest of the press.

And, by the way, this is an example of how the BusinessWeek purchase pays off. The magazine ran the story last week—giving it much wider play than it would have received from Bloomberg alone.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.