Scheming Off the Top?Congress takes steps to uncover businesses' secret stash.
ByJoan Szabo•
Opinions expressed by Entrepreneur contributors are their own.
The Senate Finance Committee is expected to continue to push fora crackdown on abusive tax shelters. It issued a set of legislativeproposals in the last Congress that called for tough new fines onthese schemes and a hefty increase in penalties on shelterpromoters. If the legislation passes, tax strategies for businessowners may well be affected.
The committee's plan is a direct response to a TreasuryDepartment request for Congress to take legislative steps to reinin abusive shelters. The Treasury claims these shelters are themost serious tax enforcement problem now facing the government, atcosts of tens of billons of dollars in lost revenue over the past10 years.
The proposals target shelters that help generate a loss forcompanies or individual taxpayers in a tax year that otherwisewould have produced a taxable gain, says Mark Luscombe, principalfederal tax analyst with CCH Inc., a Riverwoods, Illinois-basedprovider of tax and business law information. "This isaccomplished by using a combination of fairly complicatedtransactions and borrowings," he says.
