Lawmakers have recently turned their sights on corporate tax shelters that annually cost the government $10 billion. [FOOTNOTE 1] President Clinton includeda number of provisions in his Fiscal Year 2000 budget designed to targetthese often elusive shelters, and legislation was introduced in June aimedspecifically at shutting them down, and penalizing their promoters andprofessional advisors. See “Abusive Tax Shelter Shutdown Act of 1999,” H.R. 2255, 106th Cong. (1999). [FOOTNOTE 2] While the precise contours of the new legal assault on corporate tax shelters have yet to be determined, stricter laws and more vigorous enforcement are clearly visible on the horizon. Tax professionals counseling corporate clientson tax planning should proceed with caution, because some of these legislativechanges may be applied retroactively, and because, among the current proposalsare a number that would impose significant penalties on promoters and othersinvolved with improper corporate shelters.
IDENTIFYING THE CULPRITS
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