"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.
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The IRS continues to pursue abusive tax shelters in an effort tocurtail their use. Tax shelters are considered transactions thathave significant tax benefits, but little or no business purpose,says tax attorney Marc D. Teitelbaum, a partner in the New YorkCity office of law firm Sonnenschein Nath & Rosenthal.
In the most recent crackdown, the IRS announced two significantchanges. First, it issued temporary regulations that expanded thedisclosure requirements on strategies that provide significant taxbenefits. The disclosure requirements no longer apply just tocorporations but now individuals, partnerships and trusts mustprovide this tax strategy information on tax returns. Thatrequirement is effective for transactions entered into in 2001 andthereafter unless the transaction was reported on a return filedprior to June 15, 2002.
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