Tax avoidance – Focus on shelters

More rich Americans than ever avoid paying federal taxes, The Wall Street Journal reported March 30.

A report by the Internal Revenue Service found the number of tax returns showing adjusted incomes of more than $200,000 and no tax liability grew to 1,467 in 1998, the Journal said.

That was the most ever since the IRS started keeping the statistic in 1977.

The previous high of 1,253 was reached in the 1991 tax year.

Still, the share of wealthy taxpayers paying no tax was basically flat because the number of wealthy taxpayers grew with the nation’s prosperity, the Journal said.

The IRS study reached no conclusion about whether the new numbers reflect improper tax shelters. But government officials worry that wealthy individuals may be dodging taxes through offshore trust arrangements and other schemes, the Journal said.

The Senate Finance Committee this week will hold a hearing to probe the “explosive growth” in tax shelters and other tax-avoidance strategies being promoted on the Internet, the Journal said.

Leave a Response

Your email address will not be published. All fields are required.