Watson Coleman: “today I rise to join Senator Levin in introducing the Tax Shelter and Tax Haven Reform Act of 2005. This bill addresses…”

“today I rise to join Senator Levin in introducing the Tax Shelter and Tax Haven Reform Act of 2005. This bill addresses abusive tax shelters and offshore tax havens which allow tax evaders to avoid paying their fair share. These abuses increase the amount of taxes for everyone else. By increasing the penalty for these shelters, this legislation will do much to ensure that the public trust in our tax laws is restored. Two years ago, as Chairman of the Permanent Subcommittee on Investigations, I held Subcommittee hearings on abusive tax shelters. It became clear to the Subcommittee that some tax avoidance schemes are clearly abusive. These abusive shelters relied on sham transactions with no financial or economic utility other than to manufacture tax benefits. Abusive tax shelters hurt the American people. For example, a recent IRS study estimates the Nation's ``tax gap''--the difference between the amount of taxes owed and the amount collected was $353 billion in 2001. The study also found that over 80 percent of the ``tax gap'' is due to taxpayers underreporting their taxes. This means that honest taxpayers are forced to pay more to make up for those taxpayers who dodge Uncle Sam. The use of abusive tax shelters exploded during the high-flying 1990s, when many firms were awash in cash and were more concerned with generating fees than remaining compliant with the code.…”