Days Numbered for Those Using 'Son of Boss' Shelter
As part of its continued assault on tax shelters, the IRS has targeted
“Son of Boss.” If you’ve participated in the illegal tax shelter, you have
until June 22 to come clean and settle your tax debt.
By Stanley H. Block
If you’ve employed an illegal
tax shelter or offshore trust to hide money from the federal government,
you should be scared.
That is, if you’ve been
reading the newspapers.
During the past six months,
the IRS has employed some of the most aggressive tactics in its history to
take on abusive tax shelters and the cheats who employ them. In fact, in
early May, the tax-collecting agency announced its newest target: a tax
shelter known as “Son of Boss.”
Marketed in the late ’90s and
2000 to companies and high-income individuals, the Son of Boss tax shelter
was later ruled illegal by the federal government. The abusive
transactions, however, have continued.
That’s why the IRS took the
unusual step of specifying a June 21 deadline to come forward, provide
information about your Son of Boss tax shelter, and settle up with the
IRS. Otherwise, you could face jail time.
“These transactions were
developed and marketed by an interlocking network of commercial interests,
including leading law firms, accounting firms and investment banks,” said
IRS Commissioner Mark W. Everson in a statement. “Son of Boss deals had
only one purpose — the elimination of tax. We encourage investors in these
transactions to settle these disputes now to avoid more severe
consequences later.”
The IRS estimates that Son of
Boss tax shelters have resulted in between $10 million and $50 million in
tax loss.
Under the terms of the
federal government’s settlement offer, Son of Boss users must pay 100
percent of the back taxes owed, plus interest and penalties. Once the June
22 deadline passes, the federal government will aggressively prosecute
offenders.
“Taxpayers should not expect
to settle court cases on terms more favorable than those offered in the
IRS settlement initiative,” said IRS Chief Counsel Donald Korb. “The IRS
will work closely with the Justice Department on Son of Boss cases.”
This is the second
high-profile settlement offer the IRS has provided to taxpayers. Last
year, the agency offered amnesty to tax cheats who used offshore bank
accounts linked to credit cards they used in the United States. The
amnesty program resulted in more than 1,200 tax cheats coming forward.
Now with Son of Boss shelters
targeted, it could be your turn to come forward. Now is the time to
consult a qualified tax professional to get the best possible deal and to
ensure that your next vacation stop isn’t in a prison.
Or you can take your chances.
“Anyone who doesn’t come
forward can still take the IRS to court,” Everson explained. “In such an
instance, the government will vigorously pursue the full tax due,
applicable interest and the maximum penalty.”
Stanley H. Block is a Maryland State Tax
Attorney and a member of the American Society of IRS Problem Solvers. You
can contact him at 410-727-6006 to obtain a free subscription to his newsletter
titled The IRS Times & Inquirer.
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