The Tax Court held that the tax shelter
exception to the tax practitioner/client privilege did not apply to documents in the form of the minutes of meetings between a partnership and a federally authorized tax practitioner because the tax advice in the documents was not given in connection with the promotion of a tax shelter
Now with its admission of "unlawful conduct," KPMG--along with law firms and banks with which it jointly sold tax shelters
--will be more vulnerable to lawsuits from tax shelter
clients who had to pay the IRS back taxes and penalties.
Filers who have used tax shelters
and fail to include registration information on their returns could also face nondisclosure penalties as high as $100,000 for individuals and $200,000 for business.
The final disclosure and listing regulations are significantly tighter than earlier versions, which applied only to corporate taxpayers, required the existence of at least two tax shelter
characteristics and provided subjective-type exceptions that taxpayers and their advisers were prone to rely upon.
The most common tax shelters
in recent years include investments in films, computer software, mutual fund fees, resource activities (oil and gas, mining and renewable energy), and e-commerce.
are fundamentally different from tax breaks that are commonly referred to as loopholes and corporate welfare.
The last day to participate in the California Tax Shelter
Resolution Initiative is April 3, 2006.
To deal with the increasing volume of tax shelter
cases and to underscore the government's contention of many cases involving mass-marketed transactions, the IRS recently redefined how it intends to apply the item and transaction tests of Sec.
The IRS's plan to challenge tax shelters
has important implications for all tax-avoidance plans.
The law firm of Schiffrin & Barroway announces that it is investigating improper tax shelter
schemes that major accounting firms, international banks and law firms promoted to individuals and corporations since at least the mid- 1990s.
Crucial in the debate about the appropriate means of addressing tax shelters
has been the recognition that it may be difficult to clearly delineate the scope of transactions that are considered tax shelters
in a way that will discourage abuse.
The inversion and tax shelter
provisions generated little notice, primarily because both the House and Senate are already weighing several such measures.