Tax authorities in the United States, said Sen. Carl Levin, must stop the process of your organization encouraged speculation in oil markets and agriculture by allowing investment funds that exceed the limits of investment goods.
Called the Internal Revenue Service rulings own message, which allows the use of funds from foreign companies and other strategies to escape the tax implications of the increasing property of the goods of more than 10 percent of revenue, is the "end run blatant about the legal restrictions," Levin said today in a session hearing held by the Permanent Subcommittee on Investigations in the Senate.
IRS has issued more than 70 resolutions of this kind since 2006, according to Levin, a Democrat from Michigan, who heads the team, and Senator Tom Coburn of Oklahoma, the ranking Republican on the Committee. Levin said the IRS should be a permanent ban on the practice and the elimination of existing resolutions.
"The letter from the IRS provisions to allow U.S. companies to use front companies abroad, and notes designed to make financial investments in commodities, despite the restrictions imposed long ago in the tax law," he said.
The IRS in June temporarily suspended new private decisions, pending a review of its policies. IRS has a "open mind on this issue," and published the new guidelines, the IRS Commissioner Douglas H. Shulman. The lawmakers said at the hearing.
"The law is clear"
"The IRS does not like being in a position where the law is unclear and needs to go and explanations," said Shulman. "We believe there should be a law, or preferably, but in the absence of law of general application guide you can trust in the industry."
Under current tax law, investment funds do not pay income tax, provided that they comply with the restrictions on the type of investment, which says that the goods may not represent more than 10 percent of revenue. Has set standards by the IRS to allow more money to invest in goods and assets exceed the limits of 10 percent, according to Levin.
"This case is another example of how twisted our law the tax so companies have to jump through hoops just to work," Coburn said in a statement. "We must reform our procedure so that everyone knows exactly what is expected of them."
Position limits
Led to increased border Levin on speculation in commodity markets, including calls from across the border can be imposed by the Commodity Futures Trading Commission. He said that a special process and a letter of "open doors" to the speculation by allowing more money flowing into commodity markets.
He was forty-investment funds that use the marine units of the commodity investments total $ 50 billion in holdings, according to the Commission. United States investment funds totaling $ 11.6 billion in financial assets at the end of the month of November, according to the Investment Company Institute in Washington, which represents mutual fund companies.
Defended the fund industry to private decision-making process and said that he helped the retail customers to invest in commodities.
"There is no sound legal basis and administrative practices that support the IRS's position here," said ICI General Counsel Cary McMillan in a telephone interview yesterday. "What we are trying to money really to do is to give investors an opportunity to invest in some raw materials."
Shulman said the IRS had received 28 applications from the failure of other individuals to comment during a speech at today's meeting.
"We want the IRS will continue to publish the data on both the issue or just a general guide to the industry can follow," McMillan said in an interview yesterday.
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