An accounting construct known as permanently reinvested earnings is helping U.S.-based multinational corporations keep tens of billions of dollars in profits overseas, according to a new study.

Not only does it greatly reduce earnings repatriation, but it appears to be used extensively to manipulate corporate earnings and thereby mislead investors. A tax director of a Fortune 500 company has compared permanently reinvested earnings to crack cocaine, explaining that "once you start using it, it's hard to stop."

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