The IRS is getting serious about corporate tax schemes, according to a new report. The Service has opened its new Large and Mid-Size Business Division so examiners and agents can focus on illegal corporate tax shelters.
The office also is designed to encourage companies to stop the shelters before they ever start by distributing information on the various schemes.
The IRS reports that large financial services and accounting firms are the ones responsible for perpetuating these illegal shelters, and the cost to the government totals more than $10 billion annually.
What constitutes an illegal shelter? For example, large tax breaks were obtained when companies residing in the United States leased government facilities in foreign countries, then rented them back to these local, foreign governments.
As another measure, Federal legislation and new rules from the IRS are underway to require companies to actually list the shelters.