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

Share this content

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.

About admin


Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.