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According to a study released last Tuesday, U.S. multinational companies are saving $100 billion a year by shifting their profits overseas to lower their tax bills.

1. Is this tax fraud? Why or why not?
2. Explain the mechanism they are using.
3. Which countries are companies shifting profits to and why (be specific)?
4. How much in tax revenues are being lost by the U.S. each year and how could the Congress act to prevent this?

Merle, R. (2016). U.S. companies are saving $100 billion a year by shifting profits overseas, report says. The Washington Post, May 10 (Retrievable online at