Saban Had Offshore Tax Haven, Panel Says
Los Angeles billionaire Haim Saban tried to shield $1.5 billion from taxes by using an offshore tax haven, according to a U.S. Senate panel report Monday.
Saban paid for a transaction that created artificial losses, which he claimed offset his profit from selling his interest in the Fox Family Worldwide Inc. network in 2001, according to the 370-page report by the Senate Permanent Subcommittee on Investigations.
A Saban spokeswoman said he relied on tax professionals for advice and didn’t know he was doing anything wrong.
His is one of several cases in which professional advisors steered clients into murky legal waters, the report says. The panel will hold a hearing today in Washington on what it says is the rampant use of offshore tax havens used to cheat the federal government out of $40 billion to $70 billion annually.
“Our investigation blows the lid off tax haven abuses that use sham trusts, shell corporations and fake economic transactions to hide the fact that U.S. citizens are controlling offshore assets, circumventing U.S. legal requirements and dodging taxes,” said Sen. Carl Levin of Michigan, the top Democrat on the panel.
Saban, 62, who first made a fortune with the “Power Rangers” TV series, is chief executive of New York-based ABC Family Worldwide Inc. He is part of the consortium that won the bidding for Los Angeles-based Univision Communications Inc. in June.
He was one of the largest U.S. political donors in 2002, giving $9.1 million in political contributions, all to Democrats, according to the Center for Responsive Politics, a Washington-based organization that tracks campaign finance.
The offshore transaction used by Saban and four other wealthy individuals was dubbed “Personally Optimized Investment Transaction,” or Point, and cost the government about $300 million in lost tax revenue, the subcommittee found.
The only other individual user of the transaction identified by the report was New York Jets football team owner Robert Wood “Woody” Johnson IV, who is scheduled to appear at the hearing today.
According to a statement issued by his company, New York- based Johnson Co., Johnson participated in the 2000 transaction after he was advised by “one of the most prestigious and well- established law firms in the country” that it “was consistent with the tax code.”
Johnson voluntarily disclosed the transaction to the Internal Revenue Service and, after the agency challenged its legitimacy, paid 100% of taxes due plus interest, the company said in the statement.
Saban paid $50 million in fees for his Point transaction, the report said. A spokeswoman for Saban said he had been cooperating with the subcommittee staff and was settling with the IRS.
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