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.
While it agreed with the Tax Court that a House report could be a good record of congressional intent, it also found that in this case the report did not support Valero's position because nothing in it indicated that tax shelters
were limited to actively marketed tax shelters
or prepackaged products.
SB 747 (Machado) targeted those who plan, promote or sell abusive tax shelters
and lowers the standard of proof for the FTB in proving cases against practitioners.
KPMG sold tax shelters
to at least 350 people, which brought the firm $124 million in fees and cost the Treasury $1.
The IRS "cannot simply declare, by fiat, that a fundamental right of taxpayers must be discarded in the agency's fight against tax shelters
The tax shelters
in their sample are huge, producing deductions that average nearly nine percent of asset value.
that the IRS considers abusive aren't limited to those used by wealthy individuals.
The IRS's plan to challenge tax shelters
has important implications for all tax-avoidance plans.
But others can reasonably be viewed as falling in a gray area, and the courts have indeed sided with taxpayers in several tax shelter
There are a number of sophisticated tax shelters
that are usually aggressively marketed by their promoters.
In recent years, there has been a proliferation in the use of illicit tax shelters
by major U.
In 1998 PricewaterhouseCoopers bragged to Forbes magazine that it was promoting some 30 "mass-market" corporate tax shelters
, plus specialty items for big firms willing to pay extra.