homesheltersuncovering schemesprospects for reform

prospects for reform
Analysis by experts, the battle in Congress, plus the challenges facing the IRS

 is sweeping reform neccesary?

Most agree that at the core of the abusive tax shelter problem is the "economic substance" doctrine. That is, if a company enters a transaction strictly for the purpose of lowering its tax rate, the deal lacks any sort of business or economic purpose, and should be considered bogus. There is, however, a great debate over how to address the economic substance question. Former Treasury Secretary Lawrence Summers has proposed a broad rule to outlaw any transaction that lacks economic substance. Others maintain, however, that a broad rule is difficult to interpret and would interfere with legitimate business transactions. They say that the problem can be brought under control through a piecemeal approach that addresses specific abusive transactions. Here are the views of Summers and former IRS officials Charles Rossotti and Larry Langdon, Senator Charles Grassley, former Assistant Treasury Secretary Pamela Olson, U.S. Rep. Lloyd Doggett, and leasing industry lobbyist Ken Kies on the economic substance issue.

 is the irs up to the task?

During the late 1990s -- just as the tax shelter market was taking off -- the IRS found itself under fire from Capitol Hill and the media for being heavy-handed and intimidating taxpayers. Here, former IRS commissioner Charles Rossotti, former Assistant Treasury Secretary Pamela Olson and current IRS commissioner Mark Everson discuss how the Capitol Hill hearings affected the agency and whether the IRS has the necessary resources to combat the tax shelter problem. Plus, Congressman Lloyd Doggett makes his case as to why he believes the IRS is having problems getting the resources it needs.

 pending legislation

Here is a list of bills before the current session Congress as well as a summary of the recent provisions in President Bush's budget regarding abusive tax shelters.


A historical overview of the U.S. government's attempts to crack down on abusive tax shelters


home + introduction + gimme shelter + uncovering schemes + prospects for reform
interviews + links & readings + tapes & transcripts
press reaction + producer's chat + credits + privacy policy
FRONTLINE + wgbh + pbsi

posted february 19, 2004

FRONTLINE is a registered trademark of wgbh educational foundation.
web site copyright 1995-2014 WGBH educational foundation