Getting Serious About Corporate Tax Shelters PDF Download
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Author: George K. Yin
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Assuming that the problem of corporate tax shelters is as serious as some claim, this article suggests searching for a solution with the same characteristics as section 469 of the Internal Revenue Code (the passive activity loss limitations) - a broad, reasonably clear, outcomes-oriented rule that is unaffected by taxpayer purpose or intent, or the other elements making up the taxpayer's transaction. One possible solution is enactment of an quot;anti-abusequot; rule which denies a particular tax result if no sensible legislator would have approved of the result at the time the statute was drafted. The uncertainty of such a rule, however, would likely undermine its ability to be an effective deterrent to corporate tax shelters. The other possible solution explored in this article, which deserves further consideration, is to tax public corporations on their income reported for financial accounting purposes, as adjusted by tax rules authorizing specific deviations from that base. This solution should eliminate an entire class of shelter transactions. It may also greatly simplify the law and provide much needed transparency to the process of determining corporate income tax liabilities.
Author: George K. Yin
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Assuming that the problem of corporate tax shelters is as serious as some claim, this article suggests searching for a solution with the same characteristics as section 469 of the Internal Revenue Code (the passive activity loss limitations) - a broad, reasonably clear, outcomes-oriented rule that is unaffected by taxpayer purpose or intent, or the other elements making up the taxpayer's transaction. One possible solution is enactment of an quot;anti-abusequot; rule which denies a particular tax result if no sensible legislator would have approved of the result at the time the statute was drafted. The uncertainty of such a rule, however, would likely undermine its ability to be an effective deterrent to corporate tax shelters. The other possible solution explored in this article, which deserves further consideration, is to tax public corporations on their income reported for financial accounting purposes, as adjusted by tax rules authorizing specific deviations from that base. This solution should eliminate an entire class of shelter transactions. It may also greatly simplify the law and provide much needed transparency to the process of determining corporate income tax liabilities.
Author: United States. Congress. Senate. Committee on Finance
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 120
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Author: United States. Congress. House. Committee on Ways and Means
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 196
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Author: Joseph Bankman
Publisher:
ISBN:
Category :
Languages : en
Pages :
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The term ?tax shelter? is ...
Author: Robert E. Swanson
Publisher: Irwin Professional Publishing
ISBN:
Category : Business & Economics
Languages : en
Pages : 336
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Author: Joshua D. Blank
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Corporations and their shareholders have always sought opportunities to avoid entity- and shareholder-level tax liabilities under the U.S. corporate tax system. In response to the tax shelter boom of the late 1990s, Congress adopted what can be described as an “activity-based” approach to corporate tax enforcement. The reportable transaction disclosure rules target specific corporate activities and transactions that may be abusive. Because corporate tax shelters are often difficult for the IRS to detect, US tax law mandates that taxpayers and their advisors disclose to the IRS instances in which they have participated in transactions that bear tax shelter traits. Every year, thousands of US taxpayers and their advisors mail special disclosure forms that may reveal potentially abusive tax strategies, including “listed transactions” and “transactions of interest,” to the IRS Office of Tax Shelter Analysis.Despite their potential tax enforcement benefits, the reportable transaction disclosure regime faces an uncertain future. Even though taxpayers and advisors must disclose potential tax shelters to the IRS using special forms, it is unclear whether the IRS has the resources necessary to review these disclosures and pursue audits and potential tax controversies. The IRS has also significantly curtailed its designation of tax strategies as listed transactions and transactions of interest. And in 2021, the US Supreme Court held that taxpayers and their advisors may seek pre-enforcement actions against the IRS's notices that designate tax strategies as reportable transactions without violating the Anti-Injunction Act.In this chapter, we introduce a new approach to tax enforcement against corporate tax shelters in the United States. We argue that the reportable transaction rules face significant limitations as the government's primary response to abusive corporate tax shelters today. As we argue, these rules are reactive in that they often apply to emerging tax avoidance schemes rather than as a means of preempting abusive corporate tax planning. In addition, these rules may fail to deliver information that the IRS can use to detect corporate tax abuse, including due to manipulation of the disclosed information by the taxpayer. Finally, the IRS is likely to face litigation hurdles in designating “listed transactions” and “transactions of interest” through preemptive taxpayer challenges under the Administrative Procedure Act. In response, we propose three policy reforms that would mandate preemptive disclosure of broader categories of information related to tax planning from corporate taxpayers, in addition to the specific information that the reportable transaction rules currently target.
Author: Tanina Rostain
Publisher: MIT Press
ISBN: 0262027135
Category : Business & Economics
Languages : en
Pages : 421
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Book Description
The rise and fall of a tax shelter industry that enabled some of America's richest citizens to avoid paying their fair share of taxes. For ten boom-powered years at the turn of the twenty-first century, some of America's most prominent law and accounting firms created and marketed products that enabled the very rich—including newly minted dot-com millionaires—to avoid paying their fair share of taxes by claiming benefits not recognized by law. These abusive domestic tax shelters bore such exotic names as BOSS, BLIPS, and COBRA and were developed by such prestigious firms as KPMG and Ernst & Young. They brought in hundreds of millions of dollars in fees from clients and bilked the U.S. Treasury of billions in revenues before the IRS and Justice Department stepped in with civil penalties and criminal prosecutions. In Confidence Games, Tanina Rostain and Milton Regan describe the rise and fall of the tax shelter industry during this period, offering a riveting account of the most serious episode of professional misconduct in the history of the American bar. Rostain and Regan describe a beleaguered IRS preoccupied by attacks from antitax and antigovernment politicians; heightened competition for professional services; the relaxation of tax practitioner norms against aggressive advice; and the creation of complex financial instruments that made abusive shelters harder to detect. By 2004, the tax shelter boom was over, leaving failed firms, disgraced professionals, and prison sentences in its wake. Rostain and Regan's cautionary tale remains highly relevant today, as lawyers and accountants continue to face intense competitive pressure and regulators still struggle to keep pace with accelerating financial risk and innovation.
Author: United States. Congress. Senate. Committee on Finance
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 380
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Author:
Publisher:
ISBN:
Category : Corporations
Languages : en
Pages : 165
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Book Description
Author: Noel Brock
Publisher:
ISBN:
Category :
Languages : en
Pages : 17
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Book Description
We examine the effectiveness of four federal government actions, all of which were designed to curb the proliferation of corporate tax shelters dating back to the 1990s, at eliciting measurable changes in characteristics commonly associated with tax shelter firms. Our results suggest that the government's initial attacks on corporate tax shelters in the early 2000s elicited significant declines in book-tax differences, discretionary accruals, and the use of Big N audit firms, which contributed to gradual reductions in the estimated likelihood of tax sheltering for both multinational and purely domestic firms. Conversely, later attempts to discourage corporate tax shelters proved ineffective, likely due in part to the effectiveness of previous government attacks and a faltering economy. This study addresses calls from prior literature for a better understanding of factors determining corporate tax avoidance and offers new evidence of multi-faceted taxpayer reactions to corporate tax reform.
