News Release for Immediate Release September 16, 2003 District of Columbia Expands Fight Against Tax Avoidance New Partnership with IRS Targets Tax Shelters (Washington, DC) The District of Columbia Office of Tax and Revenue today joined with other state tax agencies to announce a partnership with the Internal Revenue Service (IRS) that will address the growing problem of abusive tax avoidance transactions. The agreement allows states and the IRS to exchange information regarding abusive schemes and those who promote and participate in them, as well as partner on education/outreach efforts. "We owe it to our compliant taxpayers to ensure that everyone is paying their fair share," said Phil Brand, deputy chief financial officer for tax and revenue. "This agreement allows us to cooperate earlier on investigations, so we can better target our compliance efforts and help put an end to tax evasion." Abusive tax avoidance transactions involve the use of complex, often illegal transactions that overstate expenses, understate income or shift both to other jurisdictions to gain favorable tax treatment. Often this involves multi-member partnerships, limited liability companies or offshore entities that make it difficult to trace the flow of transactions. Nationally, the Multistate Tax Commission estimates that between $10-17 billion in state taxes are lost through abusive tax shelters. The IRS began its campaign against abusive tax avoidance transactions earlier this year. The partnership announced today allows state tax officials to benefit from what the IRS has learned dealing with national and international entities regarding these schemes, and allows states to share with the IRS their experiences tackling abusive tax shelters. For more information on this agreement, visit the IRS website.