While Ben Franklin said, "Nothing can be said to be certain, except death and taxes," for a privileged few, the words don't apply -- at least as far as taxes are concerned. An investigation by Hedrick Smith for "FRONTLINE" found accounting firms have been aggressively marketing dubious tax shelters to America's wealthiest citizens for nearly a decade -- and the game of hide and seek with the IRS is costing taxpayers a fortune.

Marketplace's two-part series is based upon Hedrick Smith's investigation. The series is produced by Rick Young for "FRONTLINE" and by "Marketplace's" Stephen Henn for American RadioWorks.

One man and the tax shelter that cost him millions:
Joe Jacaboni made a fortune in the tech boom and then was pitched an "investment strategy" by KPMG -- really, just a complex tax shelter. But KPMG ignored an IRS requirement to register the shelter, calculating it could make more selling the dodgy system than it would have to pay in fees. The firm also ignored internal warnings that the shelter was illegal. When Jacaboni faced millions in back taxes, he sued KPMG. That's when his lawyers dug up internal documents showing that KPMG had had grave doubts about this tax shelter for years.
Wednesday, February 18, 2004
America's largest corporations shelter all of their income:
A study by the nonprofit Institute for Taxation found some of the largest companies in America are paying no taxes at all -- but unraveling the deals that allow these firms to elude the IRS isn't easy. Enter Cary Allen, an IRS agent who discovered one of the largest illegitimate tax shelters in the last 10 years. At the heart of the shelter scam was a complicated system of foreign leases made by U.S. companies. Problem is, even though the IRS has made some of these deals illegal, the same companies are at it again.
Thursday, February 19, 2004

Discussion:
Do you think corporations have become non-tax-paying freeloaders in American society by using illegitimate tax shelters? If so, how could we fix this problem?
Give us your thoughts

Web resource:
"FRONTLINE's" "Tax Me If You Can" series, www.pbs.org

 

American Public Media