Business Notes TAXES

For an American in Paris or a Melanesian microchip maker in Minneapolis, the message from the Internal Revenue Service is the same: pay up! The IRS announced a crackdown on American tax evaders living abroad and foreign-owned companies that are operating in the U.S. The Government says that it loses $2.3 billion a year because 61% of the 1.8 million Americans living abroad do not file returns. And an IRS survey of 12,000 foreign-owned U.S. corporations showed that up to 80% pay little or no tax.

The Government will soon have some new weapons to use against cross-border tax cheating. Starting next year, the State Department will give the IRS the names of all Americans who apply for or renew passports. Meanwhile, the IRS will be adding 25% more auditors, whose primary mission will be to examine the returns of foreign-owned businesses.