IRS Tax Shelter Initiative Yields Results

by Leroy Baker, Tax-News.com, New York

07 May 2002

The US Internal Revenue Service announced on Thursday that its 4 month Tax Shelter Disclosure Initiative was a success, leading to 621 disclosures covering 947 tax returns, and involving more than $16 billion in claimed losses and deductions.

The initiative was aimed at corporate taxpayers and wealthy individuals worried that tax shelters which they were using might be illegal, but afraid to come forward. In return for full disclosure regarding the transactions and details of the schemes, the IRS promised to waive accuracy-related penalties which might apply to tax shelter and other questionable items on a return at a rate as high as 20%.

'Hundreds of taxpayers came forward and took advantage of this opportunity to voluntarily disclose questionable tax transactions and submit the names of abusive tax shelter promoters,' Larry Langdon, the IRS Commissioner of Large and Mid-Size Business explained. He later told the Associated Press that for many of those who came forward, the 120 day initiative had represented 'a once in a lifetime opportunity'.

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