Treasury Department, Sept. 16, 2003
Abusive tax avoidance transactions are a cancer. They mock honest taxpayers who pay what they owe and stick law-abiding citizens with a bigger tax bill. Abusive schemes erode confidence in the fairness of our tax system.
And these abusive schemes are not just the IRS’ problem. They are not just the States’ problem. They are a shared problem demanding the unified approach we’re announcing today.
The inauguration of this partnership agreement sends a strong message to those promoting and using abusive tax avoidance transactions. We’re closing in on you from all sides. The States and the Federal Government are now fighting as allies.
This agreement marks a milestone in state and federal cooperation. From today forward, we will work together combating abusive tax schemes. We will share information and coordinate case management. This agreement effectively extends the resources of the IRS.
From the IRS perspective, this is another important component in our renewed focus on strengthening the integrity of our tax system through enhanced enforcement activities. Service plus enforcement equals compliance. The IRS must help people understand their tax obligations. But when people don’t meet their tax obligations, we must ensure fairness. People should pay what they owe. We will enforce the law with particular vigor in the corporate arena and for high-income individuals who enter into abusive shelters to game the system.
I want to make one additional point. I believe that the privacy of taxpayer information is a cornerstone of taxpayer rights. The information shared under this agreement will be strictly limited to that pertaining to abusive transactions.
To wrap up, I would like to thank Dale Hart for leading this effort on behalf of the IRS. And I would like to thank Stephen Cordi, who is here on behalf of the Federation of Tax Administrators, which played an important role in reaching this agreement.
Steve is also here in his role with the Maryland Comptroller of the Treasury. I’d also like to acknowledge seven other tax administrators for their efforts on this agreement:
- Marcy Jo Mandel from California.
- Kimberly Lewis Robinson from Louisiana.
- Alan LeBovidge from Massachusetts.
- Dominic Louis Vitale from New Jersey
- Kenneth Thorsen from Virginia
- Phil Brand from Washington, D.C.
- And Arthur Roth, who has just retired as Commissioner of New York Department of Taxation and Finance.
Thank you for your efforts. Now, I’ll turn this over to Dale Hart for more details on the agreement.
Related Item: IR-2003-111, IRS and States Announce Partnership to Target Abusive Tax Avoidance Transactions