Senate Finance Committee Demands Oil Companies' Tax Records

A Senate committee Wednesday announced an investigation into taxes paid by major oil companies and asked the Internal Revenue Service for the companies' tax returns.

The Senate Finance Committee promised "a comprehensive review of the federal taxes paid" by the oil companies on their record profits last year.

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Sen. Charles Grassley, R-Iowa, the committee's chairman, said the panel was concerned about high profits and executive compensation at oil companies.

"I want to make sure the oil companies aren't taking a speed pass by the tax man," said Grassley in a statement.

With gasoline prices soaring and oil companies announcing record profits, "it's relevant to know what the real financial picture is for this industry," Montana Sen. Max Baucus, the ranking Democrat on the committee, said.

It's highly unusual for the Senate committee to seek corporate tax records. The last time it was done was when the panel asked the IRS for the tax records of Enron Corp.

The committee announcement came as Congress showed increasing concern amid political fallout over high gasoline prices and oil industry profits. Lawmakers began moving on various fronts to eliminate loopholes and some tax provisions that save oil companies billions of dollars.

In a letter to the IRS, Grassley and Baucus said the tax records of the major oil companies are needed to conduct "a comprehensive review" of the companies' compliance with tax laws.

"As pressure mounts to address extraordinarily high gas prices that consumers are facing at the pump, we feel we should better understand the federal tax posture of the industry," the two senators wrote IRS Commissioner Mark Everson.

The committee said it wanted to inspect the tax returns for the last five years of the 15 largest oil and gas companies.

In their request, the senators noted not only the industry profits, but "an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers."

The retirement compensation package given by Exxon Mobil Corp. to outgoing Chairman Lee Raymond is said to total $400 million when all pension payoffs and stock options are included.