Shelter Transparency, Professional Oversight Main IRS Goals, Everson Says

June 4, 2004

IRS Commissioner Mark Everson on June 4 told the Virginia Conference on Federal Taxation that the IRS son-of-BOSS settlement initiative is just the first part of a planned effort to stem abusive tax shelters and increase the accountability of tax practitioners.

Everson said once the son-of-BOSS settlement offer ends June 21, the IRS expects to have enough data to help gather the roughly 5,000 participants involved in the high-profile shelter, which is projected to have generated about $6 billion in tax benefits. "Now that we're getting the names of all these folks -- and we will get them all -- we'll come after you," he said. "We're confident of our position here. We'll devote the audit resources we need to follow up on these transactions if people don't come in."

Everson said taxpayers targeted as part of the postsettlement dragnet will face a 100 percent tax concession and interest fees and will be penalized up to 40 percent for not coming forward.

"We think this is a watershed moment ... because the IRS has typically settled these things for less than 100 cents on the dollar and has often traded away the penalties. And we're not going to do that anymore," Everson said. "We are taking, clearly, a tougher stance ... because this problem has gotten out of line."

Everson said that the IRS deliberately eliminated the administrative appeals process -- an unconventional step he said would leave son-of-BOSS investors with no other recourse but to pursue litigation. "Any of these individuals can take us to court ... and we're happy to have that interaction," he said.

Everson also denounced tax attorneys and accountants for contributing to the "long, sad, slide" in corporate governance and the proliferation of abusive shelters.

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