Correspondent Hedrick Smith explores what banks and accounting firms are doing with tax shelters, focusing on what he calls "sham shelters" with "a veneer of legality." They "twist the law," Smith says, "and play on it in ways that were never intended." One example he follows: a U.S. bank's leasing (then leasing right back) of a German city's sewer system. "Money never moves," Smith says. "It's all on paper." The bank saved millions in taxes and the IRS, Smith says, "is behind the eight ball."
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