Wall Street bankers have stolen billions of dollars from the U.S. government in the past decade through complex tax-dodge schemes, says Congress.
FT: Leading Wall Street banks have been using complex derivatives “gimmicks” to help hedge funds and other offshore clients avoid billions of dollars in taxes owed to the government, US congressional investigators say.
A 77-page report by the Senate permanent subcommittee on investigations, to be released on Thursday, says the strategies enabled investors to avoid paying the 30 per cent withholding tax on income by treating dividend payments as returns on so-called equity swaps, stock loans or other derivatives transactions.
Transactions by Lehman Brothers, Morgan Stanley, Citigroup, Deutsche Bank, UBS and Merrill Lynch are included in the report, which calls for the Internal Revenue Service to crack down on such tax avoidance schemes. Officials from the IRS, Lehman, Morgan Stanley, Deutsche and several hedge funds are due to testify at a hearing on Thursday.
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