A bill proposed in the U.S. Senate on Monday would shut down some offshore tax haven opportunities.
The bill is called the Stop Tax Haven Abuse Act, an improved version of a bill proposed during the earlier Congress.
Offshore tax haven and tax shelter abuses are undermining the integrity of our tax system and increasing the tax burden on middle income families, said Levin, chairman of the Permanent Subcommittee on Investigations. We cannot tolerate $100 billion in offshore tax abuses burning a hole through our budget each year.
Levin says the bill is targeting tax abuses which mean losses of tax revenues for individuals between $40 and $70 billion as well as losses from corporations between $30 and $60 billion.
There would be three new provisions in the bill.
The first provision would treat foreign corporations managed and controlled in the U.S. as domestic corporations for tax purposes. The second provision would close an offshore tax dividend loophole that enables non-U.S. persons to dodge payment of U.S. taxes on U.S. stock dividends. The third would expand the tax return reporting requirements for passive foreign investment corporations to include U.S. persons who don't own a PFIC.