Report: Banks helped foreigners escape US taxes

[DogPoundPup]

Source: A/P

Big Wall Street investment banks have designed and marketed schemes enabling non-U.S. taxpayers, including offshore hedge funds, to evade millions of dollars in taxes each year on U.S. stock dividends, Senate investigators have found.

Some banks have been crafting for more than 10 years transactions designed to enable their foreign clients to dodge U.S. taxes on dividends, while the Internal Revenue Service failed to act to prevent the abuse, two senators say.

A yearlong investigation by a Senate Homeland Security and Governmental Affairs subcommittee, whose results are to be made public Thursday, found that the evasion of dividend taxes adds up to billions of dollars in revenue lost to the U.S. Treasury over the past decade.

IRS Commissioner Douglas Shulman is scheduled to testify on the issue at a hearing Thursday by the investigative subcommittee. Executives of Lehman Brothers Holdings Inc., Morgan Stanley and Deutsche Bank, and from several hedge funds also are expected to appear as witnesses.

The inquiry is part of a series of hearings by the Senate panel on offshore tax abuse, which is estimated to cost the United States $100 billion a year in lost tax revenue.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/09/10/national/w191159D76.DTL&type=politics

[UpInArms]

1. cue up the Casablanca line!

"I'm shocked, shocked to find that gambling is going on in here!"

[Mnemosyne]

2. Yeah, right, millions...

Such a small percent of that $100 billion mentioned.

snip>

Offshore hedge funds have frequently participated in the tax-evasion transactions, and their U.S. investment mangers often facilitate their participation, the Senate panel found.

snip>

They FIND criminal information all the time; when will they actually DO something about it all?!

[WriteDown]

3. This is news?

Tax schemes to avoid taxes have been around since taxes first began. We need to overhaul the entire tax code and create real enforcement.

[cyberpj]

4. "$100 billion a year in lost tax revenue." - should be a new slogan !

Seems like most people know about except the little guy who keeps getting ripped off to cover the loss.