Tax Evasion Via `Round-Tripping’ Leads To Billions in Lost Revenue, Study Finds

A form of tax evasion known as round-tripping—in which U.S. investors move funds to offshore tax havens and then use the money to invest back into the U.S.—rises along with tax rates and costs the U.S. government billions, according to a study by professors from three universities.

The U.S. has been trying to thwart the practice, which involves investment of these “foreign” funds into the U.S. equity and debt markets. The study found that U.S. investors are disguising themselves as foreign investors, who aren’t subject to the same rates on capital gains and interest income.

The money is said to ...