Obama administration supports tax haven crackdown

WASHINGTON (Reuters) - President Barack Obama's administration supports legislation recently introduced in the U.S. Congress to crack down on tax havens, Treasury Secretary Timothy Geithner said on Tuesday.

"Let me just start by saying that we fully support the legislation you referred to championed by your colleagues on offshore tax centers, and we look forward to working with you as part of the broader effort to address international tax evasion and close the tax gap," Geithner told Rep. Lloyd Doggett, a Democrat from Texas who introduced the bill in the House of Representatives on Monday.

Sen. Carl Levin, a Democrat from Michigan, on Monday introduced a corresponding bill in the Senate that would expand on legislation he co-sponsored last year with then-Senator Obama.

It would ban patenting tax avoidance plans, target dozens of offshore "secrecy jurisdictions" for attention and put a greater burden on taxpayers to show that their tax arrangements are legitimate.

A thriving business in tax evasion developed in recent years on Wall Street among consulting firms, hedge funds and other elite financial players. Some purveyors even sought patent protection for their off-the-shelf schemes.

Geithner's comments, during testimony to the House Ways and Means Committee, came one day before a Senate hearing on whether some well-to-do Americans have used secret accounts with Swiss bank UBS AG to avoid paying U.S. taxes.

But Doggett told Geithner UBS is not alone among banks in providing tax havens, and said other countries and regions have allowed Americans to hide their wealth, as well.

He asked that the administration "look closely at those that are coming and asking for a government bailout, like Morgan Stanley, which has 158 subsidiaries in the Cayman's, Citigroup with 90, and Bank of America with 59, to explain why it's equitable for them to be able to avoid taxes at the same time they're asking for so much tax money."

(Reporting by Lisa Lambert and Kevin Drawbaugh; Editing by Dan Grebler)