|Author||Subject: More Ways To Cheat the American Taxpayer|
|Kay|| Posted At 18:14:25 02/28/2000
February 28, 2000
Treasury to Crack Down on Abusive
Corporate Tax Shelters
By DAVID CAY JOHNSTON
NYT Update, 5:20 p.m.
alling the rapid growth of abusive
corporate tax shelters "the most
serious compliance issue
threatening the American tax system,"
Treasury Secretary Lawrence Summers
today announced a three-pronged attack
against corporate conduct that
"undermines the integrity of the tax
He said the official Treasury estimate
that tax shelters are costing $10 billion a
year in lost revenue "is just the tip of the
iceberg" and that the actual figure may
be many times higher.
To reduce such abuses, Mr. Summers
Promoters will be required to disclose their tax shelters to the I.R.S. as
soon as they offer them to clients and will be required to keep records
detailing both how the shelters work and who bought them, while
companies, when they file their annual tax returns, will be required to
disclose tax avoidance strategies that meet any two of six tests.
Lawyers, accountants and the companies that employ them will be subject
to suspension and barred from practicing before the I.R.S. if they engage
in selling or running abusive tax shelters.
Congress will be asked to pass a law specifying that transactions whose
primary benefit is tax avoidance lack economic substance and will be
disregarded for tax purposes.
In addition, Mr. Summers said, a special squad of I.R.S. auditors is being
assembled to hunt for tax shelters and government officials plan to call on
the chief executives of corporations and legal and accounting firms who
have engaged in abusive transactions to dissuade them from further
The plan proposal was welcomed by Mike Murphy, executive director of
the Tax Executives Institute, which represents top tax officials at 2,800
companies. Mr. Murphy said many of his members are troubled by the
abusive nature of some tax shelters and by the pressure on them to engage
in similar deals just because competitors are.
However, Mr. Murphy said, the institute opposes some aspects of the
Treasury attack, including a plan to raise penalties for illegal tax avoidance
schemes from 20 percent of the taxes avoided to 40 percent.
Re: More Ways To Cheat the American Taxpayer (Currently 0 replies)
Posted At 09:49:04 02/29/2000
I had a great idea, I thought I should be able to deduct medical expenses the insurance company refused to pay for. So I looked up the itemized deductions for medical and dental. I have about 7 grand in expenses for cosmetic old-age related unnessary, certainly has nothing to do with my fall of Sept 95. So it says take your number and multiply by .075 equals about 525 dollars what a nice deduction, sure out smarted my self this time.
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