IRS Collects $3.2 Billion from Son of Boss; Final Figure Should Top $3.5 Billion

IRS Press Release
March 24, 2005

WASHINGTON - The Internal Revenue Service announced today that taxpayers participating in the Son of Boss tax shelter settlement have so far paid in more than $3.2 billion, a figure that should top $3.5 billion when the project concludes in coming months.

Son of Boss was an abusive transaction aggressively marketed in the late 1990s and 2000 primarily to wealthy individuals. The settlement initiative required taxpayers to concede 100 percent of the claimed tax losses and pay a penalty of either 10 percent or 20 percent unless they previously disclosed the transactions to the IRS.

"This was a particularly bad shelter, and we're glad so many chose to get right with the government," said IRS Commissioner Mark W. Everson. "Despite the tough terms we offered, two-thirds of Son of Boss participants have come forward and paid up."

So far, $3.2 billion in taxes, interest and penalties have been collected from the 1,165 taxpayers who are participating in the settlement initiative. The typical taxpayer payment was almost $1 million, with 18 taxpayers paying more than $20 million each and one paying over $100 million. Processing of individual settlements continues.

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.

"For those who didn't come forward, we know who they are," Everson said. "We are going after them."

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