Tuesday, March 08, 2005

Dem Gov. Schweitzer unveils plan to crack down on tax cheats

Schweitzer unveils plan to crack down on tax cheats
Associated Press
HELENA -- Gov. Brian Schweitzer unveiled a plan Monday to crack down on cheating taxpayers that he said could mean an additional $20 million in tax collections for the state over two years.
The plan, some of which will require legislative approval for changes in laws, is aimed mostly at large multistate corporations, wealthy taxpayers and those out-of-state taxpayers making money from selling Montana property.
The proposal targets what the administration calls "abusive tax shelters and income shifting techniques" that some people and companies use to avoid paying what they should in Montana taxes.
"The long-term consequences of abusive tax shelters could be severely detrimental to Montana's economy," Schweitzer said in prepared remarks. "Montana's hardworking and law-abiding citizens do not deserve to be ripped off by high net worth individuals and multistate corporations who aren't playing by the rules."
He said the federal General Accounting Office has estimated that the federal government lost up to $85 billion over the past decade to improper tax shelters. Some of those moves include such things as creating phony deductions, miscalculating gains from sales of assets and shifting money to untaxed operations, or to states and nations where income is not taxed.
Schweitzer said the Multistate Tax Commission has estimated the states lost $12 billion in corporate taxes in 2001 alone, and Montana's share of that was $26 million.
The plan calls for requiring taxpayers and those who prepare tax returns to disclose to the state Revenue Department any questionable tax shelters and any Montana business operations with sales of more than $500,000 annually but paying no Montana income taxes.
Another piece of the plan would prevent out-of-state residents who sell Montana property from escaping taxation on the profits by requiring them to pay withholding taxes at the time of the transactions. The administration also wants to update Montana tax law to close loopholes that allow certain types of income to escape taxation.

Copyright © 2005 Associated Press