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by Brick Walters, 3/3/00

Dc: This is DCR, a news program not to be believed.
The US Treasury department announced this week it will try to crack down on the creation of tax shelters for corporations. Brick Walters reports.

(sfx: office hubub)

Brick: I visited the offices of Slip, Baffle and Dodge, where an entire room of lawyers go to work every day creating tax shelters for corporate clients seeking to improve their bottom lines. Hunched over computers, these specialists craft elaborate and barely legal money shuffling structures that lead to tax breaks for large corporations.
Barb Lure agreed to speak to me … she's just one of the Slip, Baffle and Dodge attorneys. I asked her if she was working hard on another tax shelter, and she told me she had just finished one.

Barb: I call it a Double Lease Back Debt Straddle Deluxe, with a Twist. Our client will loan money to his cousin's nephew. There'll be two loans … one at zero percent interest, the other at double interest. So … (fade off)

Brick: The new Federal rules are aimed at stopping the types of transactions that exist only to avoid taxation … exactly the kind of transaction being described by Barb Lure.
While my eyes were glazing over at her explanation … I pretended to be interested until she came up for air.

Barb: (fade up) … while the one at zero percent loan we'll write off as a loss. Did I mention, the nephew also happens to be a prince in Lichtenstein.

Brick: No. Really?

Barb: Not really. He was married to the princess for 30 seconds. Never met her.
But he's got the title and citizenship. That's very handy. So he uses the loan to buy my client's equipment, and then leases it back. Because he's a foreign national and royalty with diplomatic immunity, we can have him assume full responsibility for the non-depreciated component of the hard assets as described in the … (fade out)

Brick: She was losing me again. But I knew if I was going to get a coherent interview I'd have to strike quickly the next time she paused.

Barb: (fade up) … so while the arrangement is perfectly legal the savings for my client total well over 3 million dollars. So … my fee for structuring this arrangement can also be claimed as a loss if it's billed through an offshore company chartered in Bermuda.

Brick: Excuse me. I don't mean to interrupt your explanation … but …

Barb: Oh no, that's OK.

Brick: I'm wondering … here you are pretending things are one way when in fact everybody knows it's something else and lines of ownership stretch to dummy corporations overseas set up by money hungry governments just looking for a piece of the action … isn't there something wrong with this elaborate scheming to avoid taxes?

Barb: No, it's perfectly legal. Now …

Brick: Perfectly legal?

Barb: Not illegal, anyway.

Brick: Yes, but the Treasury department wants congress to outlaw transactions with no "meaningful economic purpose" except to lower the tax bill. Wouldn't this fall under that heading?

(sfx: background crowd out)

Barb: Lowering someone's tax bill IS a "meaningful economic purpose."

Brick: For that person, it is. But …

Barb: Guard?

(sfx: quick footsteps up)

Mr. Walters wants to leave.

Brick: Actually … I'm officially registered in French Guyana as the CEO of an offshore corporation, so you can't touch me.

Barb: This whole office is technically part of Burundi, and we don't have diplomatic relations with Guyana.

Brick: My employer … uh … has shares in the oil company that calls the shots in Burundi, so …

Barb: I'm the parent company of that company.

Brick: YOU are?

Barb: I've got it all in this drawer, right here.

Brick: You know … nothing is what it seems to be anymore.

Barb: Guards? Don't throw him too far.

(sfx: some scuffling, and two pairs of footsteps echo steady with Brick's faint protest)

Brick: (vo) Yes, I was forcibly removed from the office of Slip, Baffle and Dodge, but not before getting a glimpse of the amazing amount of semi-clandestine work that goes into building new, sturdier tax shelters for corporations and the ultra rich. Will these carefully built shelters be strong enough to withstand a fresh downpour of Treasury Department investigators? Can all the loopholes be closed, or at least patched?
And how does one become a Prince in Lichtenstein?

Guard 1: Get out, Buddy.

Brick: (vo) In time, we will all know the answers.

Guards: And stay out!

Brick: (on tape) Ahhhhhhhh!

(sfx: crash)

Brick: (vo) Way out in the field, I'm Brick Walters.


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