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Tuesday, August 01, 2006
Tax Cheats Cost Treasury $70 Billion a Year
So here's something to help defray the federal budget deficit a bit: make people who owe taxes actually pay those taxes. Sen. Carl Levin's (D-MI) staff conducted an investigation into off-shore tax havens. His minority report, which was adopted by the full Senate Permanent Investigations subcommittee, finds that superrich tax cheats are gaming the system to the tune of $70 billion per year.
David Cay Johnston reporting in The New York Times:
The 400-page report recommends eight changes, some of them aimed at going after the law and accounting firms, banks and investment advisers that the report says enable tax schemes that rely on complexity, secrecy and compartmentalizing information so that advisers can claim they had no idea that the overall transaction was a fraud.
"We need to significantly strengthen the aiding and abetting statutes to get at the lawyers and accountants and other advisers who enable this cheating," Senator Levin said, adding that "we need major changes in law to stop the use of tax havens" by tax cheats.
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[Sen. Levin] said that during the investigation he grew angry as he learned how common cheating had become and how existing government rules aided tax cheats. He said that complex schemes were broken into discrete pieces, allowing professional advisers working on each piece to assert that they had no idea that, taken as a whole, a scheme was improper.
The New York Times: Tax Cheats Called Out of Control
Posted by Craig Jennings
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