CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. US Treasury Steps Up Campaign Against Tax Shelters

US Treasury Steps Up Campaign Against Tax Shelters

by Leroy Baker,, New York

30 December 2003

As part of the US government’s ongoing campaign to snuff out abusive tax shelters, the Treasury Department is to issue new rules that will require accountants and lawyers to show they have made a “reasonable effort” to investigate whether certain tax-advantaged transactions are legal before issuing their approval.

Specifically, Treasury officials want tax professionals to apply more stringent standards when reviewing certain transactions and investment vehicles, before providing their sponsors with an opinion letter stating the transaction will stand up to IRS scrutiny.

The Treasury is worried that judges frequently waive penalties against marketers of what have been deemed abusive tax shelters – i.e. transactions with no economic purpose beyond a significant tax saving - if they are able to provide evidence of prior approval from an attorney or accountant.

The Treasury’s intentions were revealed recently by USA Today, after Assistant Secretary for Tax Policy Pamela Olson remarked that: “We’re trying to send a serious message to tax professionals, who we know have contributed to the problem.”

The news comes in the wake of a recent General Accounting Office report which revealed that the IRS suspects around 400,000 US taxpayers are involved in some form of tax avoidance activity, mainly through the use of offshore banks and credit cards. It is likely to mark the beginning of an intensification of the war between the various government agencies and tax professionals in 2004.

“After reviewing the GAO’s findings, I’m very concerned that the IRS isn’t taking all necessary steps to address the problem of deliberate tax cheating, particularly the use of offshore bank accounts to conceal income,” the Senate Finance Committee’s ranking Democrat Max Baucus commented after the GAO report's release.

“I plan to continue to push this issue with Treasury and the IRS to determine what specific steps can be taken to effectively end these schemes,” he added.

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »