Obama ad hits Romney over 'Son of Boss' tax avoidance scheme

The Obama campaign continues its focus on Mitt Romney's tax returns in a new ad juxtaposing his tax return secrecy with his role as head of the Marriott board of directors audit committee during the 1990s "Son of Boss" tax scandal, during which Romney approved $70 million of fictional losses as tax write-offs:

The ad begins with ABC's David Muir asking Romney if he'd ever paid less than 13.9 percent in taxes. "I haven't calculated that," Romney says. "I'm happy to go back and look."

The ad's narrator then asks whether Romney has paid 10 percent, 5 percent, or even 0 percent in taxes. "We don't know," he says. "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?"

In February, Bloomberg News reported on Romney's role as head of Marriott's audit board, including his approval of the "Son of Boss" transactions.

During Romney's tenure as a Marriott director, the company repeatedly utilized complex tax-avoidance maneuvers, prompting at least two tangles with the Internal Revenue Service, records show. In 1994, while he headed the audit committee, Marriott used a tax shelter known to attorneys by its nickname: 'Son of BOSS.'

A federal appeals court invalidated the maneuver in a 2009 ruling, siding with the U.S. Department of Justice, which called Marriott's transaction and attempted tax benefits 'fictitious,' 'artificial,' 'spectral,' an 'illusion' and a 'scheme.' Marriott had argued the plan predated government efforts to close such shelters.

Employing another strategy, Marriott legally avoided hundreds of millions of dollars in income taxes thanks to a federal tax-credit program criticized and allowed to expire by Congress. Marriott has also shifted profits to a Luxembourg shell company. During Romney's years on the board, Marriott's effective tax rate dipped as low as 6.8 percent, compared with the federal corporate statutory rate of 35 percent.

The campaign didn't say where the ad would be running in its announcement.