WASHINGTON - A Senate committee Wednesday announced an investigation into taxes paid by major oil companies and asked the Internal Revenue Service for the companies' tax returns.
The Senate Finance Committee promised "a comprehensive review of the federal taxes paid" by the 15 largest oil and gas companies. The committee said it wanted to inspect their tax returns for the last five years.
Sen. Charles Grassley (news, bio, voting record), R-Iowa, the committee's chairman, said the panel was concerned about high profits and executive compensation at oil companies.
"I want to make sure the oil companies aren't taking a speed pass by the tax man," said Grassley in a statement.
With gasoline prices soaring and oil companies announcing record profits, "it's relevant to know what the real financial picture is for this industry," Montana Sen. Max Baucus (news, bio, voting record), the ranking Democrat on the committee, said.
It's highly unusual for the Senate committee to seek corporate tax records. The last time it was done was when the panel asked the IRS for the tax records of Enron Corp.
The committee announcement came as Congress showed increasing concern amid political fallout over high gasoline prices and oil industry profits. Lawmakers began moving on various fronts to eliminate loopholes and some tax provisions that save oil companies billions of dollars.
The oil-loving corporate Republicans in Congress don't have much of a choice here. With gas prices climbing past $3.00 a gallon, and oil rising above $75 a barrel, the congressional Republicans know they have to do something in dealing with both the rising prices of gasoline, and the extreme profits that oil companies are making. Otherwise, Americans will not only believe that the oil companies are engaged in price gouging, but that the Republicans are beholden to the oil companies interests. Consider the details here:
In a letter to the IRS, Grassley and Baucus said the tax records of the major oil companies are needed to conduct "a comprehensive review" of the companies' compliance with tax laws.
"As pressure mounts to address extraordinarily high gas prices that consumers are facing at the pump, we feel we should better understand the federal tax posture of the industry," the two senators wrote IRS Commissioner Mark Everson.
In their request, the senators noted not only the industry profits, but "an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers."
The retirement compensation package given by Exxon Mobil Corp. to outgoing Chairman Lee Raymond is said to total $400 million when all pension payoffs and stock options are included.
Anger over soaring gasoline prices and record oil profits is putting pressure on Congress to eliminate loopholes and some tax provisions that save oil companies billions of dollars.
A House-Senate conference, negotiating a large tax bill, is considering a provision that would change accounting rules for oil inventories and require the five biggest oil companies to pay $4.3 billion more in taxes.
The measure passed the Senate but was viewed as essentially dead this week because of opposition from House GOP lawmakers. The White House opposed the idea, too, when it surfaced in November and threatened to veto the entire bill because of it.
Both the House of Representatives and Bush White House oppose this accounting charge $4.3 billion in taxes on the oil companies. Are they still going to oppose this tax change, as gas prices go up to $4.00 a gallon for Americans? And as gas prices continue rising, you can bet that there will be more talk of Exxon's CEO Lee Raymond's $400 million pay package. So this is an albatross that is hanging around the Republican's neck. And if gas prices continue to rise by November, you can expect the American public will register their discontent against the Republicans at the polls.
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