House Ways and Means Select Revenue Measures Subcommittee Chairman Richard Neal, D-Mass., said today he wants to write bipartisan legislation to enhance the IRS' ability to crack down on offshore tax dodgers. At a hearing today, Neal and IRS Commissioner Douglas Shulman said Congress and the administration need to develop better enforcement tools, which Shulman said would be forthcoming "in the next month or so." University of Michigan Law Professor Reuven Avi-Yonah testified that the amount of tax revenues parked offshore totals about $50 billion a year, which lawmakers said could help close the "tax gap" without resorting to tax increases.
Ways and Means Republicans signaled they are open to a bipartisan bill. "I think we are all in agreement that criminal tax evasion should be pursued aggressively and punished," said Rep. Patrick Tiberi, R-Ohio, the subcommittee's ranking member. Tiberi said the efforts must focus on compliance and not cross into the territory of currently legal tax practices used around the world by U.S. citizens. Republicans also said they are opposed to "blacklisting" certain countries that have been identified as tax havens with strict secrecy laws. "That might make countries less willing to cooperate with the IRS," said Rep. Geoff Davis, R-Ky. Shulman said the IRS prefers to use certain criteria to identify where tax evasion is taking place rather than naming countries. He said identifying nations would raise diplomatic issues that need to be explored in consultation with the White House and State and Treasury departments.