IRS disputes $US100b tax-haven loss estimate

IRS disputes $US100b tax-haven loss estimate
Bloomberg, May 20, 2009

Internal Revenue Service Commissioner Douglas Shulman said projections that the US loses $US100 billion annually to offshore tax havens are "wild estimates" that "don't have much basis".

Still, the tax commissioner said today, the problem is serious enough that the agency needs hundreds of new employees and new law-enforcement tools recommended by President Barack Obama.

"Those numbers are pretty broad numbers," Shulman said. The $US100 billion figure, a compilation of private-sector estimates, is often cited by Michigan Senator Carl Levin, a Democrat who led a congressional investigation into the role played by Swiss bank UBS and Liechtenstein's LGT Group in tax avoidance by Americans. North Dakota Senator Byron Dorgan also frequently cites the $US100 billion figure.

Shulman testified today before a House appropriations subcommittee on the IRS's $US12.1 billion budget request for the fiscal year that begins Oct. 1. The request, including funds to hire 800 new workers to focus on international tax issues, would be a 5.2 per cent increase over the agency's current budget.

Shulman said it was too difficult to accurately estimate how much of the $US290 billion in taxes that go uncollected each year can be attributed to international transactions by individuals and companies.