In an effort to "encourage" compliance, the IRS is thinking of making corporate tax returns public records, reports the Associated Press. IRS Commissioner Mark Everson wants lawmakers to balance privacy with the need to improve corporate tax compliance and consider opening corporate returns to scrutiny.

The issue is not just shame and bad publicity for the companies. The big issue is the difference between pumping up the balance sheet for shareholders and trimming it back down for the IRS. The agency has new forms that it says will help reveal tax shelters that it has been trying to close down for the past few years.

Part of the problem is multi-national law and accounting firms that take advantage of different tax rates in different places. And it's not always shady characters working in tax havens either. Ireland has set a deliberately low rate on intellectual property and Microsoft has an Irish subsidiary that collects most of the software license fees from around the world. The income is then returned to the US via a Nevada shelf company, where there is no corporate income tax.

In other tax news: Utilities are collecting tax money from customers but not actually paying their taxes, reports the New York Times. The companies use losses from subsidiaries to cancel out other tax obligations.

They say it's smart business but consumer groups only see the system being exploited. If the utility is a stand-alone business, then the regulated price for its power usually covers taxes and guarantees a profit. But if a larger entity owns the utility it can use losses from other businesses to offset taxes and keep the money the state regulator thought would go to pay the utility's taxes.

Enron started the trend to making tax payments a profit center and now private equity firms see a new lease on life for utilities because of the tax quirk. That's because they're usually on the lookout for underperforming businesses that, by definition, are generating losses. Sure losses plus guaranteed tax payments from a utility is certain to equate to "tax revenues" for the parent company.

And it's not like there aren't solutions. Utilities can be required to pay their own taxes and not the parent or as one former California regulator suggests, dispense with corporate taxes on monopoly utilities because they're really a consumption tax on electric power.