US Presidential hopeful Barack Obama is one of three senators who have proposed legislation that seeks to recover an estimated $100 billion a year in tax revenue they say is lost each year because of overseas tax havens.

The Stop Tax Haven Abuse Act will impact many offshore jurisdictions including Bermuda, which was mentioned directly by Democrat Sen. Obama when spoke on the proposal.

?Under this bill, if you create a trust or corporation in a tax haven jurisdiction, send it assets, or benefit from its actions, the Federal Government will presume a civil judicial and administrative proceedings that you control the entity and that any income generated by it is your income for tax, securities, and money-laundering purposes,? said Sen. Obama.

?The burden of proof shifts to the corporation or the individual, who may rebut these presumptions by clear and convincing evidence.

?This bill provides an initial list of offshore secrecy jurisdictions where these evidentiary presumptions will apply. Taxpayers with foreign financial accounts in Anguilla, Bermuda, the Cayman Islands or Dominica, for example, should be prepared to report their accounts in the Internal Revenue Service.?

Senators Obama, Norm Coleman and Carl Levin have jointly presented the proposed legislation, which will in part force hedge funds to report their foreign investors to the Treasury Department.

Also speaking to the proposal Sen. Levin referred to a 2004 report he had helped compile that revealed that two-thirds of the top 100 companies doing business with the US Government had one or more subsidiaries in a tax haven. One company, Bermuda-based Tyco International, had 155, he told Congress.

The 68-page measures proposed will impose tougher requirements on US taxpayers using offshore secrecy jurisdictions, give the US Treasury the authority to take action against foreign jurisdictions that impede tax enforcement, stiffen penalties against abusers and close offshore trust loopholes, according to Michigan Democrat Sen. Levin.

The legislation would require hedge funds to establish anti-money-laundering programs under guidance from the Treasury Department to better track offshore investors. The measure would also prohibit the US Patent and Trademark Office from issuing patents for accounting strategies intended to ?minimise, avoid, defer, or otherwise affect liability for federal, state, local, or foreign tax?.

?We cannot tolerate tax cheats offloading their unpaid taxes onto the backs of honest taxpayers,? Levin said. ?Offshore tax havens have declared economic war on honest taxpayers by helping tax cheats hide income and assets that should be taxed in the same way as other Americans.?

Both the Treasury Department and top lawmakers in both houses of Congress have made a priority this year reducing the so-called tax gap, the difference between what individuals and companies owe and what they actually pay. The IRS said a study of 2001 tax returns shows the tax gap is about $345 billion a year, only $55 billion of which is recovered.

The legislation is a ?strengthened? version of a measure introduced in 2005 by the senators, said Sen. Levin. The legislation is the product of four years of investigation by the Senate Permanent Subcommittee on Investigations.

?Our bill offers innovative ways to combat offshore secrecy,? Levin said. ?We can?t let the offshore tax havens hide $100 billion in US tax revenues which are needed to protect our troops, fund health care and education, and meet the other needs of American families.?

The Senate committee?s extended investigation culminated in a 370-page report in August that concluded companies and rich individuals, usually advised by lawyers and brokers, set up sham trusts and shell corporations to hide assets in countries such as Belize and the British Virgin Islands.

The report said wealthy American individuals have $1.6 trillion in offshore assets which they use to illegally evade between $40 billion and $70 billion in annual taxes. US corporations evade about $30 billion a year through these shelters, it said, citing an IRS study.

?It is simply unacceptable that some individuals are using offshore tax havens and secrecy jurisdictions to shelter trillions of dollars in assets from taxation,? said Sen. Coleman. ?We are introducing this bill to close these loopholes, shut down offshore tax schemes, and ensure that every American pays their fair share of taxes.?