Here’s a huge win for business taxpayers. Well, it’s a win for those involved in Son of Boss tax shelters.
Generally, the IRS can’t audit your company for anything over three years back. Now, after the recent Supreme Court ruling, the IRS 3-year rule also applies to Son of Boss tax shelters.
Son of Boss tax shelters have been a major source of IRS tax revenue. First, though, do you know what exactly a tax shelter is?
The definition of “tax shelter” is vague, at best. It refers to a scheme to avoid paying taxes. The IRS has been hunting tax shelters down in an attempt to collect unpaid taxes for years and as a result, has netted billions of dollars in doing so.
It’s tax evasion.
Let’s move on to Son of Boss tax shelters.
Pretty crafty, eh?
Well, the IRS wasn’t as impressed. In the most recent case, they hit up a company started by two entrepreneurs. The company was part of a Son of Boss scheme. But the IRS tried to audit the company six years later, citing some verbiage in the tax laws.
Normally, the IRS only has three years. But here, the IRS claimed that they had an exception.
The Supreme Court, however, didn’t buy it. They held that the IRS only has three years to crack down on Son of Boss tax shelters.
Nevertheless, this case points out an interesting issue for savvy entrepreneurs. Be wary of any creative tax schemes imposed by your tax advisers. If it seems fishy, think twice or get a second opinion. It’s okay to try to work out creative solutions to minimize your taxes, but be careful not to walk into a tax evasion scheme.
Related Resources:
- Abusive
- Tax Shelters (IRS)Promotion
- of Abusive Tax Shelters (FindLaw Library)Tax
- Evasion (FindLaw)IRS Audits
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