Obtaining written representation (i.e., opinion letters) from attorneys concerning the appropriate tax treatment of a transaction may be particularly problematic in the case of tax shelters
. Opinion letters are often written by attorneys and accountants for the promoters of tax shelters
and then provided to tax shelter
Doing something about corporate tax shelters
has a certain rhetorical appeal, but an analysis of actual data shows no evidence of a loss of corporate tax revenues attributable to shelter activities.
199 deduction, the principal residence exclusion, alternative minimum tax (AMT), healthcare, tax shelters
and a variety of other income recognition and deduction issues.
For example, the tax shelter
legislation targeted specific unlawful acts and provided taxpayers the opportunity to bypass penalties by proving the "substantial evidence" behind a questionable transaction.
Daugerdas earned more than $97 million as the architect of a two-decade fraud that relied on sophisticated tax shelters
to shield some of the country's richest people from paying taxes on nearly $8 billion in gains, said U.S.
In recent years, the IRS has enacted legislation to prevent the use of tax shelters
as vehicles that operate solely for the purpose of tax avoidance (see "abusive tax shelters
" below), but one of the key elements of tax shelter
partnerships prior to this legislative reform was the allocation of annual operating losses among the partners in such a manner that the investors seeking tax shelter
were allocated losses disproportionately greater than their true relative economic interest in the partnership.
In some circumstances it may be important to focus on where the monies can be invested, in order to make the maximum returns, with the tax shelter
coming as a secondary.
7525(b), there is an exception to the privilege for communications regarding tax shelter
Valero further argued that the word "promotion" refers only to the peddling of prepackaged tax shelters
, as alluded to in Textron (100 AFTR2d 2007-5848, "Tax Matters: Work Product Stands Up to IRS Summons," JofA, Nov.
The AJCA imposes a new, separate penalty on any person who fails to include on his tax return any required information or statement with respect to a tax shelter
. The penalty depends upon whether it is a reportable transaction or a listed transaction.
The Service's tax shelter
initiatives do not limit the taxpayer's opportunities to resolve disputes; rather they expand it.
See Graham and Tucker (2006) for references to other recent tax shelter
It must stay out of the tax shelter
business and agree to restrictions on its tax practice.
To contribute to the discussion surrounding these changes, GAO's objectives were to determine (1) according to Internal Revenue Service (IRS) data, how many Fortune 500 companies obtained tax shelter
services from their auditor; (2) according to IRS data, in how many Fortune 500 companies did the auditor provide the services to individual company officers or directors; and (3) whether selected Fortune 500 case study companies changed how they obtain tax services from their auditor in recent years.
Both bills also include revenue offsets, including new tax shelter
penalties and a host of other provisions that address perceived tax abuses.