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Abusive Tax Shelter

   Also found in: Acronyms 0.01 sec.
Abusive tax shelter
A limited partnership that the IRS judges to be claiming tax deductions illegally.

Abusive Tax Shelter
An investment vehicle or other structure with no purpose other than to reduces one's tax liability. Often, an abusive tax shelter takes the form of a partnership or trust. Taxpayers caught using abusive tax shelters to avoid or evade taxation must pay the applicable taxes plus interest. To bypass accusation of arbitrary enforcement, the IRS publishes a list of investment vehicles that are considered abusive tax shelters, though one may face penalties for using a scheme that even resembles something on the list.

abusive tax shelter
A tax shelter in which an improper interpretation of the law is used to produce tax benefits that are disproportionate to economic reality.


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He addresses abusive tax shelters and internal control weaknesses for electronic tax filing.
In cases involving abusive tax shelter transactions marketed to both business and individual taxpayers, tax practitioners have been severely punished for promoting and selling the transaction and for preparing fraudulent returns based on the transactions.
Other parts of this strategic initiative involve compliance efforts aimed at excessive compensation paid to individuals associated with some exempt organizations, misuse of conservation and facade easements, tightened rules for down-payment assistance organizations, and the prevention of abusive tax shelters with the accommodation of tax-exempt entities.
 
 
 
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