abusive tax shelter


Also found in: Acronyms.

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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And an even bigger risk is that, because the IRS believes that some of these arrangements are also abusive tax shelters, it could impose civil penalties under Sec.
The IRS and federal government already have numerous effective tools and methods to flesh out and discover so-called abusive tax shelters. For example, Congress has issued numerous statutes and the IRS has issued numerous regulations relating to the disclosure of reportable and listed transactions that harshly penalize non-disclosure.
The final regulations prescribe reporting requirements for taxpayers participating in potentially abusive transactions, expand existing rules governing the registration of "tax shelters," and set forth list maintenance requirements for advisors rendering tax advice with respect to "potentially abusive tax shelters."
Are the AICPA views on abusive tax shelters consistent with the IRS position?
The Treasury Department has made clear that they feel that the issue of abusive tax shelters is a matter of national importance.
The abusive tax shelter war has been raging for years.
Abusive tax shelter: According to the IRC, an abusive tax shelter is an entity, plan, or arrangement with a significant purpose of avoiding or evading federal income tax.
* The taxpayer was contacted by the FTB about the use of a potentially abusive tax shelter; and
Abusive tax shelter transactions typically have no economic purpose other than to reduce taxes with predictable tax losses or tax consequences.
These regulations are the most recent development in a continuing effort to deter abusive tax shelter opinions.
* Expand the scope of the examination to include any previously nondisclosed abusive tax shelter or listed transaction discovered during the course of the audit.