IRS Encourages Congress to Make Corporate Tax Returns Public
Tuesday , March 14, 2006
foxnews.com
WASHINGTON — Lawmakers should consider making corporate tax returns public to encourage businesses to follow tax laws, IRS Commissioner Mark Everson said Tuesday.
"I believe this idea merits debate," he said.
The problem stems from the "tension" between two accounting systems, one financial and one tax, Everson said. Companies strive to increase book earnings and drive up the value of shares, but then try to lower taxable earnings to minimize their tax payments.
"If we are not willing to operate the two systems by the same set of rules, it makes sense to discuss whether corporate tax returns should be public," he said.
The IRS developed a new tax for corporations designed to reveal gaps between corporate financial statements and tax returns and make corporate practices more transparent. The tax collectors said the new forms help them spot problems in corporate returns, such as tax shelters.
The IRS has spent the last few years tracing and closing tax shelters that proliferated in the late 1990s and early 2000s. Several settlement initiatives encouraged shelter users to step forward and pay taxes owed.
The nation's top tax collector also said tax administrators worldwide face increasing problems keeping up with "stateless" accounting firms, law firms, investment banks, commercial banks and others who "structure arrangements not just to park income in low-tax jurisdictions but to avoid tax altogether."
There's a growing problem with deals structured to take advantage of incongruities between nations' tax systems, and tax administrators often see only part of an international transaction. |
