Remember that bill we told you about last week, the one that was designed to crack down on offshore tax havens and might have helped stop Allen Stanford’s alleged $8 billion scam? Well, it’s back.
As we reported, the bill, introduced in 2007 by Sen. Carl Levin, died in the Senate Finance committee. A committee aide later told us that Committee chair Max Baucus never took it up because he favored a different approach to the problem.
But now Levin — joined by Senators Sheldon Whitehouse, Claire McCaskill, D-Mo. and Bill Nelson — has come back with an improved version of the legislation, the “Stop Tax Haven Abuse Act.”
According to a press release, the bill now has three new provisions, that would:
(1) treat foreign corporations managed and controlled in the United States as domestic corporations for income tax purposes; (2) close an offshore tax dividend loophole that enables non-U.S persons to dodge payment of U.S. taxes on U.S. stock dividends; and (3) expand the tax return reporting requirements for passive foreign investment corporations (PFICs) to include U.S. persons who don’t own a PFIC, but have formed, sent assets to, received assets from, or benefitted from a PFIC.
Baucus has already announced that he intends to introduce his own version of the legislation, that’s more targeted at giving the IRS the tools it needs to detect tax cheats. So we’ll have to see how that plays out.
But it seems like one silver lining in the Allen Stanford case is that it’s gotten lawmakers into gear to try to fix the problem once and for all.