Senate Permanent Subcommittee on Investigations Proposes Reforms against Tax Haven Abuses

On August 1, 2006, the U.S. Senate Permanent Subcommittee on Investigations (PSI), Committee on Homeland Security and Governmental Affairs held a hearing on “Tax Haven Abuses: The Enablers, the Tools & Secrecy.” At the five-hour hearing, ranking Democrat Carl Levin (D-Mich.) announced plans to push for a provision presuming that when a U.S. taxpayer sets up a trust or shell corporation in a tax haven he controls it and is considered the beneficial owner for U.S. tax purposes. “Today, the government has the burden of proving that an individual controls a tax haven trust or shell corporation,” Levin said at the hearing. “It is time to reverse that presumption.”