PBS FrontLine example of Tax shelter hiding Corporate/Rich income from Tax

[papau]

http://www.kansascity.com/mld/kansascity/entertainment/7973577.htm

‘Frontline' expert takes on corporate tax shelters
By AARON BARNHART The Kansas City Star

(Examples)

...a scheme that went something like this: Multinational Firm A hires Accounting Firm B to find tax shelters. Firm B finds stuff to buy that can be leased right back to the seller. The seller has no idea Firm A is involved. Firm B writes off the acquisition, takes a cut of the proceeds and marks up a big tax deduction for Firm A.

There's also the charming Cayman Islands lawyer who cheerfully evades Smith's questions about the shell company he set up for KPMG, and the ex-KPMG executive who got out when the sham tax shelters began to eat at his conscience.

And the classic German burgher who tries to explain to Smith why his city, Bochum, sold its sewage systems to an American firm — only to lease it right back from the Americans.(Its new owner, Wachovia, was simply circulating money until it became a massive tax writeoff. And that, in Smith's view, stinks.)

As a result, companies that report billions of dollars in profit to Wall Street are able to turn around and avoid paying taxes to the IRS.

“It's the people you trust to keep the system honest who have become the most corrupt: the lawyers, the analysts, the accountants,” Smith said. “What I was concerned about was not Enron but (Arthur) Andersen's failure to warn the public that the books were cooked.”

http://www.pbs.org/wgbh/pages/frontline/shows/tax/
Following the broadcast, visit FRONTLINE's Web site for more on this report, including:
· Frequently Asked Questions about the abuse of tax shelters and what the U.S. government should do to attack the problem;
· The debate over corporate taxes and the taxing of capital;
· Experts' views on how best to deter bogus tax shelters -- piecemeal measures or sweeping reforms;
· A closer look at how grassroots citizen action in Germany halted some of the bogus transactions by U.S. firms;
· Plus, extended interviews and streaming video of the full program.

http://finance.pro2net.com/x42526.xml

Tax Me If You Can: PBS Special Feb. 19 Investigates Tax Shelter Abuse
Accounting firms, legal firms and bankers put in the hot seat