AN AMNESTY for reporting aggressive tax schemes to the IRS to avoid penalties netted about 1,600 disclosures

AN AMNESTY for reporting aggressive tax schemes to the IRS to avoid penalties netted about 1,600 disclosures

June 01, 2002
AN AMNESTY for reporting aggressive tax schemes to the IRS to avoid penalties netted about 1,600 disclosures. The amnesty expired on April 23.

The government said about 1,000 disclosures involved “listed transactions” that the IRS has put the public on notice will be challenged. (An example of a listed transaction is a type of cross-border lease called a LILO, or “lease-in-lease-out.”) By coming forward, the companies making disclosures avoid an accuracy-related penalty if the tax benefits from the transaction are later disallowed. At least another 300 disclosures cover other transactions. The IRS said in mid-May that the amnesty helped it identify at least 30 transactions of which it had no prior knowledge.

The government is issuing summonses to accounting and law firms and investment banks involved in “listed transactions” seeking names of the participants in the transactions. As of May 12, 147 such summonses had been issued.

Keith Martin