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US tax dodging continues unabated

David Harding, Accountancy Age, 20 Oct 2003

A crackdown on corporate and individual tax cheats by the US InternalRevenue Service is not working, the US Senate will hear this week.

Link: E&Y tax advice to wealthy Americans questioned

In hearings beginning tomorrow, US politicians will learn that tax dodging continues unabated and that IRS policies over the past two years, designed to stamp it out, have had little impact.

The Senate Finance Committee will also hear from witnesses how, allegedly,auditors have been driven from firms for refusing to go along 'with crookedcorporate tax schemes', The New York Times reported.

And, some clients were 'lured into frauds by big accounting firms that soldtax shelters that they promoted as perfectly legal' reported the paper.

The allegations are so grave that one witness to the hearing will giveevidence behind a screen and with his voice altered.

Corporate tax cheating in the US was calculated to cost the IRS some$18bn (£10.7bn) in 2000.

A crackdown was brought in after the high-profile corporate scandals of twoyears ago but critics say not enough money is being given by Washington topolice the problem of tax-dodging.

The IRS wants some 29,000 more auditors and investigators.

It is calculated that eight out of every ten US tax cheats are let offwithout having to pay their taxes.

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