The Obama campaign continues its attacks on Romney by raising issues about his tax history. The campaign released a new TV ad Thursday that alleges Romney was involved in the "Son of Boss" scandal, one of the "largest tax avoidance schemes in history."
The narrator asks in the ad: "Did Romney pay 10% in taxes? 5%? Zero? We don't know. But we do know that Romney personally approved over $70 million in fictional losses to the IRS as part of the notorious ‘Son of Boss’ tax scandal. One of the largest tax avoidance schemes in history. Isn’t it time for Romney to come clean?”
ABC News explains that the "Son of Boss" tax scandal happened when Romney was chairman of the audit committee for the hotel giant Marriott International in the 1990s. Business Insider reports Romney is close personal friends with the Marriott family and joined the Marriott board of directors in 1993. He served as the board's chair of audit committee from 1993 to 1998. It was during the period that the Marriotts used the "Son of Boss" tax shelter, a transaction the IRS denounced as "abusive."
ABC News reports the Obama campaign says the incident is representative of Romney's pattern of seeking to minimize tax liabilities in his personal and business dealings.
According to Obama spokesman Ben LaBolt, in a memo to reporters: “These questions are especially relevant given voters’ heightened attention in this election to the fate of their own tax rates, and the central role tax reform will play in the next administration."
Did Romney enable Marriott's abusive tax shelter?CNN, reports the 30-second ad video, titled "Son of Boss," refers to an op-ed on CNN.com by two tax experts who claim that Romney was involved in the scandal in which $70 million fictional tax loss was reported while he served as board of Marriott International from 1993 to 1998.
According to the CNN op-ed by Peter C. Canellos, former chair of the New York State Bar Association Tax Section, and Edward D. Kleinbard, former chief of staff of Congress's Joint Committee on Taxation,
"During that period, Marriott engaged in a series of complex and high-profile maneuvers, including 'Son of Boss,' a notoriously abusive prepackaged tax shelter that investment banks and accounting firms marketed to corporations such as Marriott. In this respect, Marriott was in the vanguard of a then-emerging corporate tax shelter bubble that substantially undermined the entire corporate tax system. 'Son of Boss' and its related shelters represented perhaps the largest tax avoidance scheme in history, costing the U.S. many billions in lost corporate tax revenues. In response, the government initiated legal challenges that resulted in complete disallowance of the losses claimed by Marriott and other corporations... Finally, the government brought successful criminal prosecutions against a number of individuals involved in Son of Boss and related transactions not associated with Marriott, including principals at major law and accounting firms."
The authors wrote that while Romney faced no criminal charges for the scandal, "his endorsement of this stratagem provides insight into Romney's professional ethics and attitude toward tax compliance obligations."
Romney campaign reacts
The Romney campaign spokeswoman Amanda Henneberg, said the allegation that Romney was personally involved in the Marriott's tax avoidance scheme and that he had a key role in the "scandal" was not only "overblown" but also "dishonorable and dishonest."
Business Insider reports Romney campaign spokesperson Amanda Henneberg said in an emailed response:
“President Obama’s campaign has been caught lying about its knowledge concerning a vicious smear run by his Super PAC. And now, they have doubled down with another dishonorable and dishonest attack. In 2008, candidate Obama said ‘you make a big election about small things’ when you don’t have a record to run on. Since President Obama can’t run on record unemployment, falling incomes, and massive debt, he has decided to run a dirty campaign that is an affront to everything he claims to stand for.” Digital Journal reports Romney, whose estimated worth is up to $256 million, has made public his tax return for 2010 and estimate for 2011. Romney insists, however, that he will not release further taxes. But CNN reports that according to a CNN/ORC International poll released Thursday, 63% of Americans said Romney should release additional tax returns.
Digital Journal reports Romney has been forced into defensiveness in recent time after Senate Majority Leader Harry Reid claimed that "credible sources" with links to Romney's Bain Capital informed him that Romney went 10 years without paying taxes.