IRS Can Force Law Firm To Name Tax Shelter Investors, Court Rules

by Glen Shapiro, LawAndTax-News.com, New York

17 October 2003

It emerged this week that the US Internal Revenue Service has secured another victory in its campaign against tax shelters, after a federal court ruled that the Chicago office of law firm, Sidley Austin Brown & Wood must hand over information about clients who have invested in 13 tax minimization schemes since 1996.

According to reports, the IRS is also seeking information on whether the firm complied with requirements to register certain types of tax shelters, and to keep lists of investors in such schemes.

Speaking to the Associated Press, IRS Commissioner, Mark Everson explained that:

"Our actions show that we will require attorneys who act as promoters to comply with the law's requirement that they maintain lists of investors for certain abusive transactions and furnish those lists, upon request, to the IRS."

This follows an earlier ruling in the tax agency's favour. Chicago law firm, Jenkens & Gilchrist was obliged in June of this year to furnish the IRS with information on clients who had reportedly sheltered some $2.4 billion through the use of prohibited tax shelters.

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