In the fall of 2003, the California Legislature passed, and Governor Gray Davis signed, Senate Bill 614 (1) and Assembly Bill 1601. (2) As characterized by the California Franchise Tax Board, "[n]ew California law authorizes the Franchise Tax Board to aggressively combat abusive tax shelters and transactions by adding substantial...
As part of its effort to combat abusive tax shelter schemes and transactions, the IRS launched a new section on IRS.gov containing important information about abusive schemes involving employee retirement plans. The site is intended to warn promoters and plan professionals about the consequences of participating in such schemes. ...
The ongoing enforcement effort against abusive tax shelters has taken several turns in the past few months. Taxpayers and practitioners who have shelter issues need to be aware of a number of recent developments. Legislative Developments. First, as of this date (mid-November) anti-tax shelter legislation appears to have...
Entrepreneurs should be wary of the new tax shelter-reporting requirements lurking in the American Jobs Creation Act of 2004. Proliferation of abusive shelters led Congress to strengthen the law by imposing stiff penalties for taxpayers who fail to follow the rules or who incorrectly report shelter activities. Under the...
SACRAMENTO, Calif. -- The Franchise Tax Board FTB is reminding taxpayers and tax professionals that April 3, 2006, is the last day to apply for the California Tax Shelter Resolution Initiative. The initiative was announced in FTB Notice 2006-1 and follows the IRS tax shelter settlement initiative as outlined in...
Byline: DOUGLAS McLEOD SAN DIEGO-A leading sports memorabilia company facing more than $50 million in tax liabilities from its use of an allegedly abusive KPMG L.L.P. tax shelter is suing a unit of American International Group Inc. to recover unde Byline: DOUGLAS McLEOD...
The tax-exempt sector has faced increased scrutiny in recent years as it has grown in size and complexity. Exempt organizations are being watched closely by the IRS, Federal and state legislators, the press and the public. A key concern in the aftermath of high-profile tax-shelter controversies...
An organizer or seller of a potentially abusive tax shelter must maintain a list identifying each person who was sold an interest in a shelter for which registration was required under Sec. 6111. Recently issued regulations under Sec. 6112, which out An organizer or seller of...
The Internal Revenue Service (“IRS”), in an effort to curtail the promotion and implementation of tax shelters and other “potentially abusive transactions,” recently issued a series of regulations requiring identifying and reporting on their federal income tax returns, certain transactions that the taxpayer participated in during the year. These regulations...
The crackdown continues on companies using abusive tax shelters: IRS examiners will routinely request tax work papers from firms in shady deals...internal audit documents noting aggressive tax positions. In the past, IRS would ask for work papers only in unusual circumstances. If shelter is...
Tax Shelter Disclosure Rules Expanded The IRS recently revised its regulations requiring disclosure of participation in abusive tax shelters. The revisions, inter alia, significantly expand the universe of taxpayers that must disclose their participation in "reportable transactions." Reportable transactions generally include certain "listed transactions," transactions that are substantially...
More than 1,500 taxpayers who participated in a widely used tax shelter have turned themselves in, handing over millions of dollars in back taxes and penalties, the IRS said Thursday. The taxpayers had invested in a tax shelter known as "Son of Boss," a scheme designed to create artificial...
GAO-02-733 May 22, 2002 Abusive tax schemes represent a significant loss of tax revenue to the Treasury. Furthermore, tax schemes give the appearance that the tax system is unfair, which can undermine taxpayer confidence in the tax system. The Internal Revenue ServiceIRS characterizes an abusive tax scheme as...
In a move to boost tax revenue, New York State lawmakers have enacted far-reaching legislation to identify and curb abusive tax transactions. The new law, part of the budget legislation signed by Gov. Pataki on April 12, makes New York only the third state, after California and Illinois, to...
The Roof Is Off Tax Shelters As the IRS gets tough, investors should consider whether their disputed tax-shelter deductions meet the courts' criteria. Those "painless" tax-shelter write-offs of yesterday have turned into today's litigation headaches. The Internal Revenue Service is challenging every shelter in sight. Though the...
"The Internal Revenue Service recently issued final tax shelter regulations. The regulations Require that a “reportable transaction” must be disclosed to the IRS, and generally included on a list. The IRS intends to use these reporting requirements as a means of identifying potentially abusive tax shelters. The regulations...
The new Treasury Department regulations require all taxpayers participating in a reportable transaction to attach a disclosure statement.In any business transaction that is pursued for tax purposes, be aware that the U.S. Treasury Department issued a new set of regulations on Feb. 28, 2003. As part of its efforts to...
While most taxpayers voluntarily comply with federal tax laws and pay their fair share, there are serious tax compliance problems. Lately, the Internal Revenue Service has been beefing up its efforts to curb abusive tax shelters and shut down the promoters of those schemes. As part...
California recently has stepped up its efforts to crack down on "abusive" tax shelters, which have been estimated to cost the State of California as much as $1.3 billion annually in lost tax revenue. Abusive tax shelters or schemes generally are defined as transactions promoted for the promise of...
GAO-04-50 November 19, 2003 Abusive tax avoidance schemes could threaten our tax system's integrity and fairness if honest taxpayers believe that significant numbers of individuals are not paying their fair share of taxes. Abusive schemes encompass such distortions of the tax system as falsely describing the law (saying,...
