Exposing Shaky Shelters

Physician's Money Digest, April15 2004, Volume 11, Issue 7

Buyer beware:

Thebottom line:

It's a tricky business, but for high-salariedand high-taxed physicians, a slicktax shelter can look pretty attractive. The Bush administration is stepping up its crackdown on abusivetax shelters by establishing new standardsto limit the use of professional advisoropinion letters as a taxpayer defensewhen the IRS comes to call. Such lettershave been used by advisors as a marketingstrategy and have subsequently beenused by taxpayers to protect themselvesfrom the big penalties that the IRS candemand in abusive tax shelter cases.Legislation in this matter has been a longtime coming and still faces quite a fewobstacles, such as a lack of severe penaltiesfor taxpayers who fail to disclosequestionable tax shelter practices. Physician-taxpayers betterbe prepared for a continuing push towardregulations focused on accountability foradvisors and stricter disclosure regardingtax shelters on the part of the taxpayer.