Wednesday, June 3, 2009
End of a Tax Shelter-2
"A US appeals court upheld the IRS is denying more than $50 million in tax losses claimed by two Texas lawyers in an oft-litigated tax-shelter strategy known as 'son of Boss.' The Fifth Circuit Court of Appeals found that investment partnerships set up by Cary Patterson and Harold Nix lacked economic substance and should be disregarded for tax purposes. ... 'Son of Boss' refers to a category of complex tax maneuvers designed to generate huge losses with little risk to the investor, in order to shelter large capital gains. Hundreds of taxpayers involved in 'son of Boss'-type transactions have settled with the IRS since the agency issued a global settlement offer in May 2004", Martin Vaughan at the WSJ, 20 May 2009.
I last commented on these transactions on 5 January 2008, link: http://skepticaltexascpa.blogspot.com/2008/01/end-of-tax-shelter.html. The Fifth Circuit joins the US Claims Court in upholding the IRS.