There are a lot of fiscally-related problems for the Government and politicians to be concerned about.
This is a posting from my blog, How About This Law.
IRS Home Office Rules vs. Registered Cayman Islands Address
Why is it easier for a US Corporation to set itself up in
the Cayman Islands than it is for a self-employed person to deduct the expenses
of his home office?
US Senator Bernie Sanders (Ind. VT.) recently “introduced a
bill to stop profitable corporations from sheltering income overseas in the
Cayman Islands and other tax havens to avoid paying U.S. taxes. The legislation
also would end tax breaks for companies that ship jobs and factories overseas.”
Sanders stated that: “Eighty-three of the Fortune 100
companies in the United States have used offshore tax havens to lower their
taxes, according to the most recent Government Accountability Office study.”
At a news conference, Sanders showed a photo of a building
in the Cayman Islands that is the registered address of more than 18,000
companies.
In my opinion, the following proposed rules and laws should be adopted:
(1)
The IRS should develop place of
business requirements that would prohibit companies from using phony addresses,
as do apparently the 18,000 companies referred to by Sanders.
(2)
The IRS has stringent rules for the
small businessperson who might want to deduct a home office. Shouldn’t the rules for companies claiming an
overseas address be at least as realistic as the home office ones? See IRS publication 587 and IRS Form 8829.
(3)
All vendors doing business with the
US Government should certify in their bids how much US income tax attributable to
the vendor's business activity (whether it is a corporation, a subchapter S
corporation, a partnership, a self-employed person, or any other entity) was
paid in the past three years.
(4)
The US Government should not do
business with any vendor that paid no US income tax attributable to the vendor’s
business activity in any of the past three years.
(5)
Any exception to this law, for
example for national security purposes, may be made by the US President or the
appropriate Cabinet Secretary only after an Executive Order is published.
Postcript:
According to a release from Senator Sanders:
"Sanders’ bill and a companion measure introduced today in the House by Rep. Jan Schakowsky would yield more than $590 billion in revenue over the next decade, according to the Joint Committee on Taxation."
"Sanders’ bill and a companion measure introduced today in the House by Rep. Jan Schakowsky would yield more than $590 billion in revenue over the next decade, according to the Joint Committee on Taxation."
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