Cayman Islands Will Share Tax Information

The Cayman Islands, long considered a haven for tax evaders, signed an agreement with the Bush administration to share tax information that will help track down violators.

Treasury Secretary Paul O’Neill formalized the pact with Christopher Meyer, the British ambassador to the U.S., and Cayman Islands Gov. Peter J. Smith. O’Neill called the agreement a “signal event” in curbing tax avoidance.

The accord will enable the Internal Revenue Service to pierce the secrecy of accounts at Cayman Islands financial institutions, paving the way for audits that could uncover tax evasion, drug money-laundering and other misdeeds.

Senate hearings this year disclosed that the U.S. loses an estimated $70 billion in tax revenue each year because assets are concealed in offshore tax havens.