Mitt Romney's presidential campaign, which was going full steam ahead just a few days ago, has found itself running into troubled tax waters. The candidate has doggedly avoided the question of releasing his tax forms, coyly stating that he follows all tax laws. New reports about the existence of millions of dollars of his wealth in offshore tax havens are not likely to make those niggling tax questions go away.
Romney has elected to maintain a shroud of secrecy around his tax affairs, but questions are being asked about his ability to pay a much lower tax rate of 15% than many Americans. However, he may have an even bigger reason to keep his tax affairs private. According to several news reports, he has millions of dollars in offshore tax havens, like the Cayman Islands. He has made use of the tax saving benefits of investing in offshore havens, in order to protect taxes on his $250 million fortune. He's believed to have $8 million funds listed on the Cayman Islands registry, and another investment of between $7 million and $25 million also in the Cayman Islands.
The Romney campaign denies that the money was parked in these offshore tax havens in order to deny the Internal Revenue Service its due share of his wealth. They also deny that these tax havens have provided any great tax benefits to the presidential candidate.
The federal administration estimates that $100 billion in taxes every year are lost when money is parked in funds offshore. As any California tax lawyer knows, offshore investments in jurisdictions like the Cayman Islands or Bermuda, provide some Americans the means to avoid tax-related problems.