Report Urges IRS To Use The Net To Find Tax Shelter Sellers

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

23 April 2004

A report published recently by the Treasury Inspector General for Tax Administration has advised the section of the Internal Revenue Service responsible for monitoring the selling of abusive tax shelters to make greater use of internet searches, in a bid to weed out promoters of illegal tax planning advice.

"If the Internet is not routinely monitored, the LDC (Lead Development Center) may not be timely identifying and detecting sites of a significant number of promoters of abusive tax schemes," TIGTA’s report stated.

Created in April 2002, the Lead Development Center is tasked with collating all potential leads regarding abusive transactions entered into by tax promoters and users, in addition to monitoring the progress of investigations handed to compliance field officers.

Whilst TIGTA’s report praised the LDC for some “very positive” initial results, it was critical of the department’s failure to adequately research tax shelter marketing on the internet.

"One of the main reasons the LDC was created is to systemically monitor the Internet to identify leads and detect sites, promoters, and promotional materials that market abusive tax schemes over the Internet," observed the report.

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