By David Cay Johnston. The opinions expressed are his own.

Readers, I apologize. The premise of my debut column for Reuters, on News Corp’s taxes, was wrong, 100 percent dead wrong.

Rupert Murdoch’s News Corp did not get a $4.8 billion tax refund for the past four years, as I reported. Instead, it paid that much in cash for corporate income taxes for the years 2007 through 2010 while earning pre-tax profits of $10.4 billion.

For the first time in my 45-year-old career I am writing a skinback. That is what journalists call a retraction of the premise of a piece, as in peeling back your skin and feeling the pain. I will do all I can to make sure everyone who has read or heard secondary reports based on my column also learns the facts and would appreciate the help of readers in that cause.

No excuses. But I will explain how I made such a bonehead error.

The other facts I reported remain:

* Among the 100 largest companies in the United States, News Corp has the third largest number of subsidiaries in tax havens, a Government Accountability Office study found in 2009.

* On an accounting basis, which measures taxes incurred but often not actually paid for years, News Corp had a tax rate of under 20 percent, little more than half the 35 percent statutory rate, its disclosures show.

* Murdoch has bought companies with tax losses and fought to be able to use them, which reduces his company’s costs.

* News Corp lawyers and accountants are experts at making use of tax deferrals, though the company’s net tax assets have shrunken from $5.7 billion in 2007 to $3.3 billion last year as the benefits were either used or expired.

CHECKING THE RECORDS

Tax is my beat, and I was simply looking for what the record showed since Mr. Murdoch is much in the news these days. Some of his British journalists hacked into voicemails, paid off cops and interfered in a murder investigation. Having a long career writing not just about tax, but also about journalistic misconduct, I wondered if there was anything of interest in News Corp’s annual disclosure reports, known as 10-K forms. I examined them back to 2004, the year that it switched from an Australian to an American company.

What I found was four years of big negative numbers in the “cash paid for taxes” line in the footnotes to the consolidated statements of cash flows.

The most common convention is to report tax payments as positive numbers and to use negative numbers to report net refunds from government to a company.

Professor Ed Outslay, who teaches graduate accounting at Michigan State University and is an authority on extracting tax information from disclosure statements, teaches his students “normally ‘parens’ mean a tax benefit, not an expense.”

While that is the norm, it is not universal and I knew that. Some big companies report “cash paid for taxes” with payments in parentheses and refunds as a positive number. This reversal makes sense from a company’s point of view, though few companies do it that way.

I saw that over the seven years that News Corp has been a U.S. company it reported “cash paid for taxes” as positive numbers in 2004 through 2006 and then as (negative) numbers for 2007 through 2010.

ERROR ALERT

The first suggestion I had erred came in the middle of the night when a post at taxprofblog (I teach at Syracuse University College of Law) said I had made an error. I checked the disclosures and then wrote back that the poster was in error. Still, the note troubled me and before dawn I was reviewing every document. As I was rechecking my work, Robert S. McIntyre of Citizens for Tax Justice, who is respected across the political spectrum for the care he takes with numbers, sent me a note saying I had it wrong. News Corp, he said, was using negative numbers to report outflows, rather than tax inflows, starting in 2007.

Here is how the same number, in millions of dollars, for “cash paid for income taxes” for its 2006 fiscal year was reported in News Corp’s 2006 annual disclosure report and then in the 2007 report: $558 $(558)

Add up the negative “cash paid for taxes” number for the years 2007 through 2010 and you get the negative $4.8 billion number I reported as tax dollars flowing to News Corp instead of to governments, as they actually did.

How did I miss the switch in convention for reporting positive and negative numbers? The company disclosed in its 2007 annual report that it was changing the way it reported some numbers. Here is the entire disclosure, from Note 2 on Page 87:

Certain fiscal 2006 and fiscal 2005 amounts have been reclassified to conform to the fiscal 2007 presentation.

COMPLEX STATEMENTS

I do not recall if I read that line, but even if I had I would not have connected it to the switch from positive to negative numbers in the “cash paid for taxes” line. In its profit and loss statement News Corp uses almost all positive numbers, even for costs. It lists revenues, for example, and operating expenses as positive numbers even though expenses, like cash paid for taxes, flow out of the company.

But in the “cash paid for taxes” and some other lines in the same document, I know now, it follows a different convention and that it switched conventions four years ago. Indeed, another journalist pointed out to me that within one of the tables in its latest disclosure News Corp made inconsistent use of positive and negative numbers.

Disclosures are complex statements, but they also are intended to inform investors and regulators, not confuse as can happen when mixing and matching positive and negative numbers. Here is a question for the SEC: Should companies be allowed to use inconsistent conventions on positive and negative numbers in the same document?

Before even writing my column I called News Corp. Neither of the News Corp spokespeople so much as coughed when I said my first column would be about News Corp making $4.8 billion from the tax system in the previous four years. I also instantly emailed my spreadsheet, at News Corp’s request, though the company says it did not get it. The company did not get back to me — they were, after all, besieged with other calls from journalists — and I did not check back again, though I should have.

SETTING THE RECORD STRAIGHT

As a further check, when I enter numbers in spreadsheets I use a yellow background to remind me that at least a second check needs to be done before publication. When I later examined the spreadsheet against the source document the numbers matched so I changed the background to white to indicate to myself that I had double-checked the numbers.

To keep my column as simple as possible I limited the graphic I roughed out to the four years starting in 2007. When the 2005, 2006 and 2007 numbers from the 2007 disclosure statement matched what was in my spreadsheet I clicked to the white background. I should have checked the earlier years where what was negative had been reported as positive.

When more than a day after the column was posted, a News Corp publicist called me, I had already discovered the mistake and told her it was being withdrawn and a correct column written. She also helped me tie down some crucial details, like finding that 2007 disclosure.

I often write tart notes at the Romenesko blog for journalists, the Columbia Journalism Review, Nieman Reports and elsewhere about what I consider flawed reporting by others. I lecture to young reporters around the world on the duty of care they need to take with facts and teach how to check and cross check. Until now I have never made a big mistake, but this is a painful reminder that we all put our pants on one leg at a time. The measure of character, I say in my posts and lectures, is whether when an error is found you forthrightly and promptly correct.

So I hope readers will trust that while I made a whopper of a mistake, it has been corrected forthrightly and promptly.