The Senate adopted an amendment to the surface transportation bill (S. 1813) by voice vote March 8 that would prohibit foreign financial institutions from having access to the U.S. financial system if they are found to be aiding tax evasion.
Under Section 311 of the Patriot Act, Treasury can take a range of measures against foreign governments or financial institutions that engage in money laundering. The senators’ amendment gives Treasury the same tools to combat foreign governments or financial institutions that significantly impede U.S. tax enforcement. For example, Treasury could prohibit U.S. banks from accepting wire transfers or honoring credit cards from banks found to significantly hamper U.S. tax enforcement efforts.
Modifications made earlier in the day to the amendment (S. Amdt 1818) by Sen. Carl Levin (D-Mich.) made the amendment more amenable to senators of both parties by saying Treasury could stop the transactions of tax havens and financial institutions that “significantly impede” U.S. tax enforcement.
The final version of the amendment also added language noting that if a jurisdiction or financial institution is cooperating with the United States, that fact may be favorably considered in evaluating whether it is significantly impeding enforcement. Staff said the amendment would raise $900 million over 10 years.
“Each year the United States loses literally tens of billions of dollars from people using offshore tax havens to dodge their tax obligations,” Levin said on the Senate floor.
A final vote on the measure is expected on March 13, 2012. Then it is off the the Republican controlled House of Representatives, where is may not receive such a warm reception.
It’s time to put an end to offshore tax abuses that allow tax cheats to profit at the expense of honest taxpayers,” said Whitehouse. “I’m proud to support Senator Levin’s amendment, which will give the U.S. Treasury greater powers to crack down on offshore tax abusers and the banks that aid them.”
Stay tuned... Same Tax Times... Same Tax Channel!