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Abusive Tax Shelter

What is 'Abusive Tax Shelter'

An investment scheme that claims to reduce income tax without changing the value of the user's income or assets. Abusive tax shelters serve no economic purpose other than lowering the federal or state tax owed when filing. Often, these schemes channel funds through trusts or partnerships to avoid taxation.

Explaining 'Abusive Tax Shelter'

People who invest in abusive tax shelters can be penalized by the Internal Revenue Service (IRS). Typically, when the IRS determines someone has used such a scheme, the person will owe back taxes with accrued interest.

To help taxpayers recognize potential schemes, the IRS has compiled a list of transactions that are abusive tax shelters. If a tax shelter resembles a listed transaction, it is considered abusive and the users may face penalties.


Further Reading


Abusive tax avoidance and responsibilities of tax professionals
www.tandfonline.com [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

Sheltering Lawyers: The Organized Tax Bar and the Tax Shelter IndustrySheltering Lawyers: The Organized Tax Bar and the Tax Shelter Industry
heinonline.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

Lost in translation: Detecting tax shelter activity in financial statementsLost in translation: Detecting tax shelter activity in financial statements
www.jstor.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

The economics of corporate tax selfishnessThe economics of corporate tax selfishness
www.nber.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

Economic Substance: Drawing the line between legitimate tax minimization and abusive tax avoidanceEconomic Substance: Drawing the line between legitimate tax minimization and abusive tax avoidance
heinonline.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

When Good Preferences Go Bad: A Critical Analysis of the Anti-Tax Shelter Provisions of the Tax Reform Act of 1986When Good Preferences Go Bad: A Critical Analysis of the Anti-Tax Shelter Provisions of the Tax Reform Act of 1986
heinonline.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

Travails in tax: KPMG and the tax-shelter controversyTravails in tax: KPMG and the tax-shelter controversy
papers.ssrn.com [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …

Tax shelter activity: lessons from twenty years of evidenceTax shelter activity: lessons from twenty years of evidence
www.jstor.org [PDF]
… investigations, the Wylys have maintained a position of total independence, for taxation purposes, from … hedge fund, Renaissance Technology Corp., allegedly dodged $6.8 billion in US taxes using schemes … 5. Benefit: What Tax Professionals Gain from Abusive Tax Avoidance …


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