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American Morning

Some People Search for Ways to Avoid Paying Taxes Using Internet

Aired April 05, 2001 - 11:11   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Tax day is fast approaching. Sorry to be the one to tell you that. And some people are looking for ways to avoid paying taxes altogether. That's the focus of a Senate Finance Committee hearing that is currently underway on Capitol Hill. For details on that, let's go back to Jeanne Meserve in Washington -- Jeanne?

JEANNE MESERVE, CNN CORRESPONDENT: Daryn, tax scams are nothing new. But practitioners now have a new and very powerful tool. And that is the Internet.

They can send out bulk e-mails to unsuspecting Americans. They can lure customers in with very slick web sites. And today, the Senate Finance Committee is looking into the dimensions of the problem.

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SEN. CHUCK GRASSLEY (R), IOWA: The Internet gives these tax con artists the unprecedented ability to reach out to millions of households very cheaply and very easily. We will hear testimony today that tax scams are not limited by income or geography.

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MESERVE: And every time a citizen is lured into one of these illegal schemes to avoid paying taxes, it cost the U.S. Treasury money, by one estimate $300 billion a year.

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SEN. MAX BAUCUS (D), MONTANA: ... could afford a larger tax cut, prescription drug benefits, pay down the debt more quickly, and pay for other priorities simply by cracking down on these six-figure tax cheats costing the government and the American people approximately $200 billion a year.

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MESERVE: Now members of the Senate Finance Committee -- you're looking at a live picture of the committee right now -- are hearing from wide array of witnesses today, including victims of these scams, attorneys, consumer watchdog advocates. They will also be hearing from the head of the IRS, Charles Rossotti, members of Congress likely to encourage him to have his agency take a more aggressive attitude towards these Internet tax fraud scams, one member of Congress saying the IRS may be well-intentioned, but it is operating under old rules put in place before the advent of the Internet.

Daryn, Leon, back to you.

KAGAN: Jeanne, thank you very much.

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