ABC News finds tax issues in Romney's Cayman Island dealings

ABC News reports this evening that the massive document drop on the Gawker website earlier today reveals that Bain Capital made use of arcane techniques in several of its Cayman Islands-based funds to avoid U.S. taxes.

According to ABC News: The audited financial statements of one of the Cayman Islands funds make note of the use of "blocker" entities, which are used to help retirement accounts and nonprofit entities avoid some taxes. Financial statements for another fund note that it "intends to conduct its operations so it will … not be subject to United States federal income or withholding tax ..." Those statements, ABC says, are found on two of the funds in which Romney is heavily invested still. The publication of the Bain Documents on the Gawker website could rekindle debate about Romney's role at the company, and specifically about Bain's decision to domicile many of its funds in offshore locations known as tax havens. Both ABC and Gawker are waiting for a response from the Romney campaign about the documents. However, according to ABC: ...when ABC News first reported on Bain's Cayman Islands accounts, campaign officials said the purpose of locating offshore was to help attract money from foreign investors. The accounts provided no tax advantage to American investors like Romney. Romney, the campaign said, has paid all U.S. taxes on income derived from those investments. How one attracts money from foreign investors by investing money in tax hideouts remains to be explained.

"The only reason they structure it that way is to avoid tax," said Rebecca Wilkins, senior counsel with the group Citizens for Tax Justice. "It just confirms what everyone already believes about the tax system -- that it's rigged. That the rules are rigged to favor the well off." ABC explains that some experts have pointed to the blockers to help explain how Romney has been able to amass between $20.7 million and $101.6 million in a tax-free IRA, many times more than the typical amount an IRA can hold. Romney has not responded to questions about his IRA. According to an earlier report, we can probably add this latest news to the things Romney chooses not to be asked about in interviews.