AP Punked: General Electric Returning $3.2 Billion Tax Refund to US -- NOT!

The Associated Press fell for a fake news release, forcing it to kill a story reporting that General Electric would repay its $3.2 billion tax refund to the federal government on April 18 in the face of criticism over its tax liability.

The news organization said it withdrew the story, based on a news release GE said was a hoax, after 35 minutes this morning.

"The AP did not follow its own standards in this case for verifying the authenticity of a news release," AP Business Editor Hal Ritter said in a follow-up story.

Andrew Boyd, a member of a group called the "Yes Men," said the group sent out the release to call attention to GE's approach to taxes, Reuters reported.

"This is unpatriotic, it's undemocratic, it's unfair," Boyd told Reuters. "It might be legal, but it's immoral."

The New York Times reported in March that the company had $14.2 billion in worldwide profits last year, including $5.1 billion from U.S. operations, but owed the federal government nothing in taxes and claimed a tax benefit of $3.2 billion. The Washington Post later reported that GE had paid estimated taxes for 2010 but did not get a $3.2 billion refund.

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GE has not filed its 2010 federal tax return and expects "to have a small federal income tax liability," company spokesman Andrew Williams told AOL News.

A company fact sheet said GE paid $2.7 billion in taxes worldwide, "including significant U.S. federal income tax payments" last year.

"The main reason why our tax rate was so low in 2010 was that we lost billions of dollars in GE Capital, our financial arm, as a result of the global financial crisis," Williams said in a statement. "Similarly, in 2009 GE Capital's losses were so large that the total company lost money on its U.S. operations. GE's tax rate will be much higher in 2011 as GE Capital recovers."