Romney’s Returns Revive Scrutiny of Offshore Tax Shelters
By JONATHAN WEISMAN
NYT
WASHINGTON — Mitt Romney’s tax returns have drawn political scrutiny on multiple fronts, like his relatively low tax rates and the money parked in a Swiss bank account. But on Capitol Hill, his returns have caught the eyes of members of both parties for what appears to be his use of a type of complex shelter that has been debated for years in battles over evasion and fairness in the tax code.
The technique in question allows nonprofit institutions and large retirement funds to exploit the advantages of shell companies set up in tax havens like the Cayman Islands by investing money with private equity firms like Bain Capital, which Mr. Romney ran. Ordinarily, such private-equity investments are frequently subject to something called the unrelated business income tax. But by going offshore, pension funds, universities, foundations and even large Individual Retirement Accounts can structure those investments to avoid that heavy tax.
The technique has drawn bipartisan scrutiny in recent years from the Senate Finance Committee, complicating the confirmation of one of President Obama’s nominees, drawing negative attention to a Republican Treasury official and eliciting scathing criticism of a well-known charity, the Boys & Girls Clubs of America. The committee’s chairman, Senator Max Baucus, Democrat of Montana, and its former ranking Republican, Senator Charles E. Grassley of Iowa, have moved to make it illegal.
Tax experts and former Senate Finance Committee staff members say that Mr. Romney’s I.R.A. appears to have used the technique, and that he may have benefited personally.
(More here.)
NYT
WASHINGTON — Mitt Romney’s tax returns have drawn political scrutiny on multiple fronts, like his relatively low tax rates and the money parked in a Swiss bank account. But on Capitol Hill, his returns have caught the eyes of members of both parties for what appears to be his use of a type of complex shelter that has been debated for years in battles over evasion and fairness in the tax code.
The technique in question allows nonprofit institutions and large retirement funds to exploit the advantages of shell companies set up in tax havens like the Cayman Islands by investing money with private equity firms like Bain Capital, which Mr. Romney ran. Ordinarily, such private-equity investments are frequently subject to something called the unrelated business income tax. But by going offshore, pension funds, universities, foundations and even large Individual Retirement Accounts can structure those investments to avoid that heavy tax.
The technique has drawn bipartisan scrutiny in recent years from the Senate Finance Committee, complicating the confirmation of one of President Obama’s nominees, drawing negative attention to a Republican Treasury official and eliciting scathing criticism of a well-known charity, the Boys & Girls Clubs of America. The committee’s chairman, Senator Max Baucus, Democrat of Montana, and its former ranking Republican, Senator Charles E. Grassley of Iowa, have moved to make it illegal.
Tax experts and former Senate Finance Committee staff members say that Mr. Romney’s I.R.A. appears to have used the technique, and that he may have benefited personally.
(More here.)
Powered by Blogger
0 Comments:
Post a Comment
<< Home