Backgrounder: US politicians and tax avoidance

The Senate's interventions into tax avoidance isn't the US congress's first intervention into the area.

In fact, it is politicians who have in some respects led the way on cracking down on unethical, and often illegal, behaviour by US tax accountants and wealthy Wall Street bankers.

The US Permanent Subcommittee on Investigations has made it its favourite subject; its report in 2005 on the promotion of tax shelters by accountancy firms led to one of the darkest days in KPMG's history.

The report, and the hearings that led up to it, helped bring about the Department of Justice's investigation into the firm that nearly led to its downfall, and its paying a $456m fine.

A further report in 2006 delved into the issue again, uncovering some of the more aggressive elements of the US tax industry again.

Now Senators Norm Coleman and Carl Levin are at it again, angry about the avoidance of taxes on dividends from US companies.

This report may even have some UK institutions worried; though Levin and Coleman's primary target is the US investment banks who marketed the scheme, and the IRS for not acting, the recipients of the tax advantages were foreign owners of US stocks.

Some may be worried the powerful US politicians may be after them next.