"I'll Huff, and I'll Puff . . ."
Hang on, little piggies! Tax auditors are getting ready to aim their big, bad breath at business tax shelters.
The IRS continues to pursue abusive tax shelters in an effort to curtail their use. Tax shelters are considered transactions that have significant tax benefits, but little or no business purpose, says tax attorney Marc D. Teitelbaum, a partner in the New York City office of law firm Sonnenschein Nath & Rosenthal.
In the most recent crackdown, the IRS announced two significant changes. First, it issued temporary regulations that expanded the disclosure requirements on strategies that provide significant tax benefits. The disclosure requirements no longer apply just to corporations but now individuals, partnerships and trusts must provide this tax strategy information on tax returns. That requirement is effective for transactions entered into in 2001 and thereafter unless the transaction was reported on a return filed prior to June 15, 2002.
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