|
|
U.S.
Senator Ken Salazar
Member of the Agriculture, Energy and Veterans Affairs
Committees
2300 15th
Street, Suite 450 Denver, CO
80202 | 702 Hart Senate Building, Washington, D.C.
20510
|
Sen. Salazar Introduces
Bill to Address Offshore Tax Havens
WASHINGTON, D.C.
- In an effort to prevent wealthy individuals from using offshore financial
accounts to evade U.S. tax laws, United States Senator Ken Salazar introduced
the Offshore Tax Haven Enforcement Act of 2007 to address
this issue. While the U.S. tax code contains several provisions to prevent
the use of offshore accounts to avoid paying taxes, the IRS faces significant
difficulties in enforcing them in large part because the statute of
limitations on investigating offshore tax evasion does not provide sufficient
time or flexibility.
“Millions of Americans
work hard, play by the rules and pay their taxes,” said Senator Salazar.
“It is grossly unfair that some are able to hide assets offshore in
order to avoid paying their fair share.”
This legislation would extend
and modify the statutes of limitations for investigations involving
offshore tax havens and would give the IRS the tools it needs to go
after offshore tax evaders.
In a March 2007, the General
Accountability Office released a study entitled, “Additional Time
Needed to complete Offshore Tax Examinations” recommending that
Congress extend the statute period for taxpayers involved in offshore
activity.
The Offshore Tax
Haven Enforcement Act of 2007:
- Changes the normal statute
of limitations from three to six years for any return for a year in
which the taxpayer directly or indirectly formed, owned, transferred
assets to, was a beneficiary of, or received money or property or
the use thereof from a financial account or an entity in an offshore
secrecy jurisdiction.
- Defines “offshore secrecy
jurisdiction” as a jurisdiction that, in the judgment of the Secretary
of the Treasury: (1) has corporate, business, bank, or tax secrecy
rules or practices that unreasonably restrict the ability of the U.S.
to obtain information relevant to enforcement; and (2) does not have
effective information exchange practices.
- Suspends the running
of the statute of limitations on assessment if the taxpayer is resisting
the production of offshore financial records.
- Clarifies that the statute
of limitations on assessment remains open on the entire tax return
until the taxpayer files all required information returns on foreign
entities and transactions. Current law is vague with respect to this
matter.
- Creates a new exception
to the 10-year statute of limitations on collections in cases where
the taxpayer attempts to evade payment. Under current law, this exception
exists with respect to evasion of assessment, but not to evasion of
payment.
###
|