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March 29, 2005

IRS collects $3.2 Billion in Son-Of-Boss Tax Shelter Scams

IRS Commissioner Mark Everson announced March 24, that it has collected over $3.2 Billion in from taxpayers participating in the Son of Boss tax shelter. IRS officials expect this number to grow to over $3.5 Billion once all the settlements are in. Son of Boss was an abusive transaction aggressively marketed in the late 1990s and 2000 primarily to wealthy individuals.

The settlement initiative required taxpayers to concede 100 percent of the claimed tax losses and pay a penalty of either 10 percent or 20 percent unless they previously disclosed the transactions to the IRS. So far, $3.2 billion in taxes, interest and penalties have been collected from the 1,165 taxpayers who are participating in the settlement initiative. The typical taxpayer payment was almost $1 million, with 18 taxpayers paying more than $20 million each and one paying over $100 million.

Participants not taking part in the settlement initiative have or will shortly receive a deficiency notice from the IRS disallowing all claimed tax losses and transaction costs. They will also be assessed the maximum applicable penalty –– 40 percent.

Posted by Gerry Torres at 06:29 AM in Taxation | Permalink


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