IRS Victorious in Tax Shelter Battle, $75M Class Action May Begin | AccountingWEB

IRS Victorious in Tax Shelter Battle, $75M Class Action May Begin

A federal judge this week in Chicago gave the IRS yet another win in the ongoing effort to breach attorney-client privilege in pursuit of tax shelter users and the professionals who aid them.

According to the Washington Post, a Judge told the firm of Jenkens & Gilchrist to begin complying this week with IRS summonses, requesting client names. The judge also cautioned the clients themselves that they will be subject to penalties if they make privilege claims in court that are found to be frivolous.

In a statement, IRS Mark W. Everson said, "This is yet another in a string of victories in the tax shelter battle." He added, "The courts are rapidly dismantling the baseless claim of privilege invoked by attorneys and accountants attempting to hide abusive transactions from IRS scrutiny."

Also this week, New York Federal District Judge Shira A. Scheindlin granted preliminary approval of the $75 million class-action settlement negotiated for former tax shelter clients of the national law firm of Jenkens & Gilchrist.

The proposed class includes more than 1,100 taxpayers in 41 states who participated in tax shelters designed, marketed and implemented to the class members by Jenkens & Gilchrist and others from January 1999 through December 2003.

In addition to the $75 million payment, Jenkens & Gilchrist will be providing the class members with documents and information as to the roles of, and fees paid to, other parties that participated in the design, marketing, implementation and sale of the tax shelter transactions to the class members.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.