S. 681 would restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid Federal taxation.
Detailed Summary
Stop Tax Haven Abuse Act - Amends Internal Revenue Code provisions relating to tax shelter activities to: (1) establish legal presumptions against the validity of transactions involving offshore secrecy jurisdictions (i.e., foreign tax havens identified in this Act and by the Secretary of the Treasury); (2) impose restrictions on foreign jurisdictions, financial institutions, or international transactions that are of primary money laundering concern or that impede U.S. tax enforcement; (3) increase the period for Internal Revenue Service review of tax returns involving offshore secrecy jurisdictions; (4) require tax withholding agents and financial institutions to report certain information about beneficial owners of foreign-owned financial accounts and accounts established in offshore secrecy jurisdictions; and (5) disallow tax advisor opinions validating transactions in offshore secrecy jurisdictions.
Amends the Securities Exchange Act of 1934 and other federal enactments to impose a penalty for failure to disclose holdings or transactions involving a foreign entity.
Requires the Secretary of the Treasury to publish a final rule requiring unregistered investment companies, including hedge funds or private equity funds, to establish anti-money laundering programs and to submit suspicious activity reports.
Modifies requirements for certain third party summonses used to obtain information in tax investigations that do not identify the person with respect to whose liability the summons is issued (John Doe summons).
Increases penalties for promoting abusive tax shelters and for aiding and abetting the understatement of tax liability.
Prohibits tax advisor contingent fee agreements for obtaining tax savings or benefits.
Allows increased disclosure of tax information for enforcement purposes.
Directs the Secretary to impose standards for written tax opinions by tax practitioners.
Denies tax deductions for certain fines and penalties for violations of law and for interest paid on certain understatements of tax.
Sets forth rules for the application of the economic substance doctrine and imposes penalties for underpayments of tax due to transactions lacking economic substance.
Status of the Legislation
Latest Major Action: 2/17/2007: Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.
Points in Favor
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Points Against
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Visitor Comments
bill olson
if we had a low flat, uncomplicated tax system we wouldn't have to worry about people going to other countries for relief.
Shawn
Close all the loop holes. Add terriffs to outside buisness.
Bobby B.
By the time these nimrods close these "loopholes" 10 more will open. Simplify the over 7 million word tax code and set a low fixed corporate tax and these idiots won't have to keep grandstanding on this issue. The comments about "hiding assets" scares me to death. How dare anyone want to keep there assets private! They should be sitting out there for every greedy trial lawyer to snatch at will!
sam golden
if we had a low tax system here in the USA, everyone in the world would want to hide their money here.
mildred j.
Sam, you are right on.
our economy would boom if we were the "tax haven"
Professor Rydstrom, Esq.
Tax Haven Abuse Act - Moving in the direction of tax fairness is not bad per se. The debate should include the means of doing so. We must debate the constitutionality of the use or misuse of certain factual presumptions.
rrydstrom@gmail.com
Anti-Double Standard
The US is a no-tax jurisdiction for foreigners engaging in certain types of investments or business activities within the US. Other jurisdictions are only trying to be competitive by doing the same. Why is it OK for us to do it and other countries can't? That's not a level playing field. Double standards stink. Flat tax is not a bad idea.
Bored on Saturday Night
The USA is listed as a jurisdiction of primary money laundering concern....instead of trying to bully other jurisdictions around and disrespecting international law, lets focus our efforts on taxing all of the money that's being laundered right underneath our noses?
sharon golden
if anyone could "hide" their money anywhere in the world that they wanted to without fear,there would be so much competition that everyone would have their money in their own country.(if their own country was not stupid and non-competitive)