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Senator suggests tax-return disclosure

The top Republican on the Senate Finance Committee is suggesting the government release corporate tax returns to the public, a step to calm investors that would reverse decades of taxpayer privacy laws.

Iowa Senator Charles Grassley said a company's tax returns would provide a better picture of its financial health to shareholders and regulators if they can be made public without compromising trade secrets or interfering with tax planning.

"Given recent events, it is important that we have a thoughtful discussion of this matter," Grassley wrote in a letter to Treasury Secretary Paul O'Neill and Securities and Exchange Commission Chairman Harvey Pitt.

Companies often report varying financial results to the SEC and the IRS due to different tax and financial accounting rules. They must send the IRS a special form explaining the differences.

Lawmakers suspect Enron Corp and other companies exploit those differences by hiding losses and expenses from investors while emphasizing them on their tax returns to claim deductions.

SEC filings are public; IRS records are never released.

Grassley's panel is investigating 16 years of tax returns of Enron Corp, which filed in December for the largest corporate bankruptcy.

In his letter to O'Neill and Pitt, Grassley asked for views on what additional tax information should be provided to the SEC and to shareholders.
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