A new report from the General Accounting Office (GAO) explores the murky waters of overseas tax avoidance by wealthy Americans, and finds that while IRS audits of Americans using offshore tax havens often uncover large tax scams and a great deal of revenue, the government is hampered in its investigative work by rules requiring tax administrators to wrap up most audits in three years. The GAO report was presented in a Senate Finance Committee hearing yesterday, where a Treasury official did not say whether the Bush administration would consider changing the statute of limitations for these particular tax audits. The report examines case studies showing that three years is simply not enough time to effectively catch tax cheats who are running away as fast as they can. The New York Times' Edmund Andrews has the story. The Talking Taxes weblog has commentary.