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Tax havens probed

WASHINGTON (Reuters) - Congressional investigators will travel to the Cayman Islands next week to look into alleged tax evasion as governments worldwide take a tougher stance on tax dodgers.

"Our hope in sending GAO investigators to the Caymans is to get some answers about...what's really happening with US companies going offshore," said Senate Finance Committee chairman Max Baucus, a Montana Democrat, in a statement.

The GAO, or Government Accountability Office, is the nonpartisan investigative arm of Congress.

For many years, critics of the Cayman Islands and other tax havens have related tales of office buildings plastered with bronze plaques for phantom shell companies set up to hide the assets of corporations and the rich from tax authorities.

Baucus specifically said an office building called Ugland House in the capital of George Town "has been the source of much debate on the Senate floor over the past few years".

The five-story building on a palm tree-lined boulevard has reportedly been the official address of thousands of shell companies, including units of major US corporations.

Earlier this week, the US Internal Revenue Service said it joined other nations to probe possible tax evasion by hundreds of rich individuals, including more than 100 Americans, with bank accounts in Liechtenstein, a tiny European principality.

Senator Carl Levin said Tuesday that the Liechtenstein case marked a new chapter of international cooperation on combating tax evasion. The Michigan Democrat chairs the often tax-focused Senate Permanent Sub-committee on Investigations.

Mr. Levin, Senator Barack Obama, and Norm Coleman, a Minnesota Republican, last year introduced a Senate bill to crack down on tax evasion strategies.

It would ban patenting them and target 34 offshore tax havens, including the Caymans, Bermuda, and the Bahamas.