What is the IRS doing about the problem of abusive tax shelters?
The IRS tries to discourage the use of illegitimate tax shelters by identifying and publishing transactions that it believes are “abusive.” The process, called “listing,” is intended to put taxpayers on notice that the IRS will not recognize, or allow, certain types of transactions. The IRS has published a list of more than 25 transactions that it has determined to be abusive or illegal. That list can be found on the IRS Web site. In addition, the IRS is going after tax shelter promoters, trying to enforce requirements that promoters register all shelter products and maintain lists of clients who use these products. The Department of Justice, on behalf of the IRS, has brought several cases against promoters — including KPMG — for failing to register their products and/or provide client lists when requested. Some promoters have settled with the government. Others, continue to fight the legal proceedings. The IRS also offers periodic amnesties to investors to try and get them to come f
