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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  701.328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free
FOR IMMEDIATE RELEASE Contact: Rick Clayburgh, Tax Commissioner 701-328-2770
March 11, 2004

North Dakota Joins States to Fight Abusive Tax Shelters

BISMARCK --- Tax Commissioner Rick Clayburgh announced today that North Dakota has signed a joint agreement with 38 other state tax agencies plus New York City and the District of Columbia, to share information among themselves on abusive tax shelters and illegal transactions, a move intended to strengthen their fight against this complex issue.

"The agreement is a good opportunity for North Dakota to work with other states and share the necessary information so we can deal with these types of tax avoidance schemes," said Commissioner Clayburgh.

Many state tax agencies, including North Dakota, have laws that authorize them to routinely share confidential tax data with one another. Each state's statute spells out the manner in which confidential data must be shared, stored, and disposed.

For over 10 years, the Federation of Tax Administrators (FTA), an association of the tax agencies in all states, D.C. and New York City, has facilitated this exchange of information by developing and sponsoring the Uniform Exchange of Information Agreement. Today's agreement specifies the types of work that will be done together to deal with abusive and illegal transactions.

"Abusive tax avoidance transactions have become a threat to the fiscal health of our states," explained Stephen M. Cordi, Deputy Comptroller for Maryland and president of the FTA. "It's hard to overstate the size of the problem or the difficulty of dealing with it in an efficient and systematic way."

The new agreement complements one signed last September between the IRS and 45 states, the District of Columbia and New York City. Under the terms of the Abusive Tax Avoidance Transactions (ATAT) partnership, the federal and state governments agreed to coordinate their efforts and share data on illegal schemes to evade both federal and state taxes.

There are abusive shelters and illegal transactions that are engineered to avoid state taxation only. Today's agreement provides a formal structure for the states to notify one another when they uncover one of these new schemes, share insights on new compliance thinking, and point out potentially helpful directions for audit exploration.

"This is an issue of fairness in tax collection," Clayburgh said. "Through this joint agreement, the Tax Department has another avenue to ensure all taxpayers are treated in a fair and equitable manner."

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