Corporations may soon face stiff pressure to disclose to the Internal Revenue Service earlier and with greater detail their means of avoiding taxes. In its long-awaited “white paper” on corporate tax shelters, the Treasury Department emphasizes open disclosure of tax deals both to discourage their use and to improve Internal Revenue Code enforcement.
The plan is generally supported by the American Bar Association and American Institute of Certified Public Accountants, so Congress is expected to approve it eventually. Congressional tax-writing committees are now drafting major tax bills, but they are mum about whether they will include a provision to curb corporate tax shelters. Tax practitioners are betting that Congress will defer taking up the issue until it has time to digest the Treasury report, released on July 1.
