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TAXES: Corporate Loopholes and Offshore Havens

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posted on Aug, 3 2004 @ 01:57 PM
“Governments around the world are concerned by the ever-growing share of global finance which has gone beyond the reach of national or international authorities. There is no shortage of international initiatives aiming to tackle various aspects of the offshore problem. The Organisation for Economic Co-operation and Development (OECD) and the EU have led efforts to address problems in taxing both firms and individuals, while the UN Drugs Control Programme and the Financial Action Task Force (FATF) set up by the Group of Seven (G7) and located at the OECD have been leading efforts to tackle money laundering. The Financial Stability Forum (FSF), set up in the wake of the Asian crisis, released its report looking at the impact of offshore financial centres (OFCs) on the global financial system earlier this year.” Source

“The Arthur Andersens of the world have exploited loopholes in our tax code to find new, legal ways for corporations to cut their tax bills by moving overseas. According to the IRS, these corporate crooks steal $70 billion annually from the federal treasury by not paying their fair share in taxes. …Benefits for relocation have been substantial. Tyco International, a manufacturing company, saved $400 million and Ingersoll-Rand saved $40 million last year by moving to the sunny islands. Enron had 800 faux-businesses set up in offshore havens to avoid millions in taxes. Source

While democrats have been critical of this practice Democrat Slams Companies That Use Offshore Tax Havens the Republicans seem to support it and keep giving large corporations tax breaks House Passes Major Tax Cut For Businesses

What are the various party’s platforms with respect to this issue?

More background:
Tax Avoidance And A Tan
Why Most Of Us Pay More Taxes Than Our Share

[edit on 8/3/2004 by Gools]

posted on Aug, 3 2004 @ 08:02 PM
Under the Bush administration, targeting off shore accounts used to hide income has become a top priority.

The US taxing authority, the Internal Revenue Service, has unveiled plans to crackdown on millions of Americans believed to be avoiding income taxes by hiding money in offshore bank accounts.

The announcement, made by IRS commissioner Charles Rossotti, is yet one more indication the agency is beefing up auditing duties curtailed during the time of Bill Clinton's presidency

Using records from credit card companies, the IRS is able to track down some of those people hiding income.

On March 25, 2002, the IRS petitioned the U.S. District Court in San Francisco for permission to serve a John Doe summons on VISA International seeking records on transactions for 1999-2001 using cards issued by banks in over 30 tax haven countries.

And don't assume the new enforement initiatives are for individuals only. Under the current administration, the IRS will be cracking down on corporations also.

Abusive tax avoidance transactions are LMSB’s highest enforcement priority. Other high risk issues requiring additional research and appropriate compliance improvement action involve executive compensation, offshore tax avoidance transactions, flow-through entities, special purpose entities, and financial vs. tax reporting discrepancies.

The Bush administration is putting the teeth back into the IRS's ability to catch tax cheats, to ensure everyone pays what they owe, while giving the honest taxpayer a break.

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