Daily Tax Update - March 24, 2005

THE DAILY TAX UPDATE WILL BE PUBLISHED ON A PERIODIC BASIS UNTIL CONGRESS RETURNS FROM ITS RECESS ON APRIL 4TH.

IRS EXPECTS TO COLLECT OVER $3.5 BILLION FROM SON OF BOSS SETTLEMENTS:
Today, the IRS announced that taxpayers participating in the Son of Boss tax shelter settlement initiative have paid in more than $3.2 billion, an amount that could exceed $3.5 billion by the conclusion of the settlement initiative. According to the IRS, "Based on disclosures the IRS has received from promoter investigations and from investor lists from Justice Department litigation, the agency has determined that just over 1,800 people participated in Son of Boss. . . . Participants not taking part in the settlement initiative have or will shortly receive a deficiency notice from the IRS disallowing all claimed tax losses and transaction costs. They will also be assessed the maximum applicable penalty –– 40 percent. Their choice now will be either to settle with the IRS by paying the higher amounts or litigate their cases in court."

  • IRS Commissioner Mark Everson said, "This was a particularly bad shelter, and we’re glad so many chose to get right with the government. Despite the tough terms we offered, two-thirds of Son of Boss participants have come forward and paid up." Everson added, "For those who didn’t come forward, we know who they are. We are going after them."
  • IRS Chief Counsel Don Korb said, "The IRS's legal position on this abusive transaction is strong. It's our belief that taxpayers who did not participate in the settlement will rue the day they made that decision."
  • Additional information can be accessed here.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read  more information on Steptoe's tax practice