Tax Shelter and Tax Haven Reform Act

Bill: 108-s-2210
Sponsor: Sen. Levin, Carl [D-MI]
Introduced: 2004-03-12 in the Senate
Policy area: Taxation
Subjects: Accounting
Administrative procedure
Administrative remedies
Appropriations
Auditing
Bank accounts
Bank examination
Business records
Civil Rights and Liberties, Minority Issues
Civil actions and liability
Commerce
Confidential communications
Conflict of interests
Congress
Congressional reporting requirements
Corporate finance
Corporation taxes
Department of the Treasury
Directories
Economics and Public Finance
Fees
Finance and Financial Sector
Financial statements
Fines (Penalties)
Foreign Trade and International Finance
Foreign banks and banking
Foreign corporations
Foreign tax credit
Fraud
Government Operations and Politics
Government paperwork
Governmental investigations
Income tax
Information disclosure (Securities law)
Injunctions
Interest
Investment advisers
Investors
Law
Lawyers
Leases
Legal ethics
Legal fees
Liability (Law)
Limitation of actions
Partnerships
Profit
Public records
Right of privacy
Subpoena
Tax consultants
Tax deductions
Tax evasion
Tax havens
Tax penalties
Tax returns
Tax shelters
Tax-exempt organizations
Taxation of foreign income
Valuation

Summary:
action_date: 2004-03-12
text: 
Tax Shelter and Tax Haven Reform Act - Amends the Internal Revenue Code to add or increase penalties for: (1) promoting abusive tax shelters; (2) aiding and abetting the understatement of tax liability; (3) failing to provide required information on a tax shelter; (4) failing to maintain a client list of tax shelter investors; (5) failing to disclose potentially abusive tax shelters; and (6) failing to report certain interests in foreign financial accounts. Extends the expiration period for assessing and collecting tax for failure to disclose information relating to a potentially abusive tax shelter. Expands the types of tax shelter activity for which the Secretary of the Treasury can obtain injunctive relief.
 
Authorizes the Secretary to censure or fine tax practitioners who violate standards of behavior for practice before the Department of the Treasury. Directs the Secretary to impose specified standards for issuing professional tax shelter opinions. Expands provisions denying privilege for communications between a tax shelter promoter and a corporate client to include any person directly or indirectly participating in tax shelter activities. Authorizes the Secretary to share certain tax return information with the Securities and Exchange Commission and other agencies relating to tax shelter and tax evasion activities. Revises rules allowing disclosure of tax return information by tax practitioners to certain governmental agencies, including congressional committees.
 
Imposes a penalty on tax practitioners who make a fee agreement with a taxpayer contingent upon actual or projected tax savings. 
 
Expresses the sense of the Senate that additional funds should be appropriated for Internal Revenue Service enforcement efforts against abusive tax shelter activities and that the IRS should devote more of its enforcement funds for that purpose. 
 
Sets forth rules for the application of the economic substance doctrine. Imposes additional penalties for underpayment of taxes resulting from abusive tax shelter activities and from transactions lacking economic substance.
 
Requires disclosure of payments of $10,000 or more to accounts or persons located in an uncooperative tax haven (a foreign country that imposes no or nominal taxation and that has rules and practices that impede disclosure of tax information). Directs the Secretary to publish an annual list of uncooperative tax havens. Denies certain tax benefits for income attributable to activities in an uncooperative tax haven.


Legislative actions:
action_date: 2004-03-12
text: Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S2783-2790)
action_date: 2004-03-12
text: Sponsor introductory remarks on measure. (CR S2778-2783)
action_date: 2004-03-12
text: Introduced in Senate