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FROM THE OFFICE OF PUBLIC AFFAIRS April 15, 2003JS-190 As part of a comprehensive strategy to ensure all taxpayers pay their fair share, the Treasury Department and the Internal Revenue Service are moving aggressively to combat abusive tax avoidance transactions. “The IRS is building an enforcement web to catch and eliminate tax shelters. Taxpayers should come forward now, before they get tangled in the web. The IRS is collecting information about taxpayers and promoters who don’t come forward so it can act on that information,” stated Treasury Assistant Secretary for Tax Policy Pam Olson. “It’s time to come in from the cold.” The number and complexity of questionable tax avoidance devices has expanded in recent years. To address them, the IRS is pursuing a multi-pronged approach on abusive transactions. “We are committed to using the tools at our disposal to identify questionable transactions early, analyze those transactions quickly and take appropriate action promptly to stop those transactions we determine to be abusive,” said IRS Chief Counsel B. John Williams. “We will continue to pursue promoters and taxpayers to ensure they are complying with their legal obligations, and will take them to court if necessary.” “Our enforcement strategy to combat abusive transactions is working,” said Larry Langdon, Large and Mid-Size Business Division B Commissioner. “Early disclosure is important, and our efforts to encourage promoters and investors to step forward on these abusive transactions have been extremely successful.” Among the key steps taken: The IRS is actively pursuing promoters of abusive transactions. The IRS conducts promoter examinations in instances where a promoter has not complied with regulations requiring identification of potentially abusive tax avoidance transactions by registering such transactions, and maintaining or making investor lists available to the IRS upon request. The IRS and Treasury Department are publishing legal guidance when a transaction is determined to be abusive. When a transaction is determined to be abusive, IRS and Treasury publish guidance as early as possible. This process is designed to deter subsequent promotion and investment in abusive transactions and to facilitate identification of investors and promoters. It also ensures consistent treatment of such transactions by IRS agents in the field. The IRS Disclosure Initiative brought many taxpayers into compliance and providing leads on promoters and emerging abusive transactions. The IRS is auditing taxpayers to determine whether they invested in abusive transactions, using information derived from promoter audits, the Disclosure Initiative, public information and other sources. A special Settlement Initiative offered equitable alternatives to protracted enforcement and litigation. The IRS has placed a special emphasis on abusive shelters and transactions. The President’s budget proposes an additional $100 million to support this effort to pursue high income individuals and businesses. This request is awaiting action by Congress. More information on IRS actions involving abusive shelters and transactions is available by visiting: |
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