Don’t you just hate it when somebody publishes a report showing that millions of wealthy Americans are evading their income taxes and getting away with it?

And when this news comes just as we approach that hateful anniversary that arrives every April 15, it is about as amusing as a smelly armpit. With all the sense of humor it is famous for not having, the Internal Revenue Service chose last week to publish a report demonstrating that offshore tax avoidance has become a game that threatens to overtake the popularity of golf among the country club set.

This is particularly nauseating news coming as it does so soon after President Bush rammed through his huge tax cut that guarantees ever lower tax rates for the wealthy over the next 10 years. It would seem that many rich taxpayers, unsatisfied with the Bush tax cut, are coming back for a second helping at the hog trough.

This form of tax evasion is not available to most working stiffs, people whose wages are regularly reported to the IRS by the companies that employ them and who pay their taxes before they ever receive a paycheck. But it has become popular with business owners, doctors, entertainers, lawyers and investment professionals who found it a convenient and reprehensible way to pay for everything from groceries to automobiles to their children’s college tuition.

Here’s how it works. First you get a Visa, MasterCard or American Express card issued in some small nation, preferably one where there are more banana trees than people and bank secrecy laws are strict.

Then you sanitize your spending by running up huge balances to pay for stuff you want.

“They can use the cards to pay for everyday expenses like groceries and gas or even purchase luxury items like boats and cars,” says IRS Commissioner Charles O. Rossotti. “Since these cards are issued from banks in tax-haven countries, it has been very difficult for the IRS to trace these transactions back to the taxpayer. For years, people assumed we wouldn’t be able to find them. Now we have a way.”

The IRS got the bright idea of subpoenaing the credit card records of people with accounts in Antigua, Barbuda, the Bahamas, Cayman Islands, Hong Kong, the Isle of Man, Liechtenstein, Luxembourg and Switzerland. Based on the result of its subpoenas, the IRS now estimates that this form of offshore evasion is more common than it had suspected. It guesses that as many as 2 million loyal Americans, or people who call themselves loyal Americans, have been using this tool to thumb their noses at America and conceal their spending in vest-pocket nations where a few bankers get rich making a joke of U.S. tax laws. Many of these are pleasant little places that might otherwise starve so I suppose it’s no use blaming them for inventing novel ways to supplement their exchequers.

“Simply put,” says Rossotti, “the guarantee of secrecy associated with offshore banking is evaporating.”

We can only guess how many lawyers, doctors and business professionals are, even as they file their 2001 taxes, rubbing their hands together in anticipation of the audits they now dread. And Treasury Secretary Paul O’Neill must be biting his tongue. He has defended the right of Americans to take advantage of legal offshore tax advantages.

Now that his own IRS commissioner has informed him of how easily this leads to widespread evasion, he must regret his words.

I suppose we can now better appreciate why it was such a dumb idea for Congress to “reform” the IRS in ways that made it easier to cheat on taxes. This was preceded by a dog-and-pony show conducted by the Senate Finance Committee, which trotted out a handful of supposedly harassed taxpayer witnesses, many of whose stories turned out to be more apocryphal and hyperbolic than reliable. Instead of protecting aggrieved taxpayers Congress ended up shielding tax cheats. Meanwhile, the IRS has been systematically starved of funds for tax enforcement.

In New York, which naturally has more tax cheats than any other IRS district, there are only about two dozen auditors to police the tax-paying habits of a place where conspicuous wealth and the flaunting of it exist side by side with a blue-collar and salaried population that pays its taxes by payroll deduction.