Cayman Companies come under US Senate Spotlight
On July 24, 2008, another the United States Senate hearing took place. Following the hearing, the US Congress intensified its attention to offshore finance.
The hearing discussed why so many US companies have established entities in the Cayman Islands and other offshore jurisdictions. The discussion of the issue led to proposals to introduce requirements of stricter reporting rules for tax purposes.
At the hearing, the findings of a Government Accountability Office (GAO) investigation of the Ugland House were introduced. The Ugland House is home to a legal firm in Cayman that has nearly 19 000 registered companies, approximately half of these Cayman-incorporated companies are American.
It was proposed as one one solution that it might be required that financial firms file information reports to the Internal Revenue Service (IRS) when facilitating transfers of customer funds offshore. This is aimed to enable the IRS to better track tax evaders by means of matching the report with filed returns.