President Barack Obama’s re-election campaign stepped up its attacks on Republican rival Mitt Romney’s tax history with a new negative ad highlighting Romney’s tenure as head of the audit committee of Marriott International during a period when the committee used a tax shelter that has since been ruled illegal.

The ad also highlights questions about Romney’s own taxes amid claims from Senate Majority Leader Harry Reid, D-Nev., that he talked with an unidentified Bain Capital investor who said Romney hadn’t paid taxes for 10 years. Romney has strenuously refuted the claim, but has steadfastly refused to release any of his tax returns from before 2010

The ad begins with ABC News correspondent David Muir asking Romney if he ever paid less than 13.9 percent in taxes, as he did in 2010. “I’m haven’t calculated that,” Romney replies. “I’m happy to go back and look.”

The ad goes on to ask, “Did Romney pay 10 percent in taxes, 5 percent, zero? We don’t know. But we do know that Romney personally approved over $70 million in fictional losses to the IRS as part of the notorious Son of BOSS tax scandal, one of the largest tax avoidance schemes in history. Isn’t it time for Romney to come clean?”

The ad references an opinion piece that appeared on on Thursday by tax attorney Peter C. Canellos and Edward D. Kleinbard, a University of Southern California law professor who previously served as chief of staff of Congress’s Joint Committee on Taxation. They noted that Romney was on the board of Marriott International for many years and served as head of the audit committee from 1993 to 1998. During that time, the hotel company used the Son of BOSS tax shelter, which was later listed as an abusive transaction by the IRS. Major accounting firms were eventually forced to pay heavy settlements to the IRS for marketing the Son of BOSS tax shelters to their clients.

“In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction,” said the article.

The Romney campaign labeled the ad “another dishonorable and dishonest attack,” and pointed out that the authors of the CNN article had both contributed to Democratic candidates in the past.

The ad came amid charges by Obama that Romney’s tax reform plan would benefit wealthy taxpayers while requiring middle-class and lower-income taxpayers to pay more, based on a study released last week by the Tax Policy Center (see Obama Calls Romney Tax Policies ‘Robin Hood in Reverse’). A separate study released Friday by Citizens for Tax Justice claimed that Romney’s tax plan would give an average tax break of at least $250,000 to people making over $1 million.

The Romney campaign also ran negative ads accusing Obama of trying to weaken work requirements for welfare recipients by allowing states to be exempted from some of the requirements. The Obama administration has denied that the relaxed requirements were intended for this purpose.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access