Internal Revenue Service (IRS) officials
announced a broad-based, limited-in-time
opportunity for taxpayers to come forward
and settle an array of abusive transactions.
Taxpayers who participated in these
abuses will have until January 23, 2006 to
submit their settlement papers to the IRS.
The initiative, described in Announcement
2005-80 identifies 21 transactions eligible
for the program. Qualifying abuses include
a wide cluster of schemes involving funds
used for employee benefits, charitable
remainder trusts, offsetting foreign
currency options contracts, debt straddles,
lease strips, and certain abusive
conservation easements.
Under the settlement terms, participants
(both individuals and companies) will be
required to pay 100% of the taxes owed,
interest and, depending on the transaction,
either a quarter or half of the penalty the
IRS would otherwise seek. There is
penalty relief for transactions disclosed to
the IRS or in cases where the taxpayer
received a tax opinion from an
independent tax advisor. Transaction costs
paid by the taxpayer, including
professional and promoter fees, will be
allowed as an ordinary loss.
"We're offering taxpayers a quick, quiet,
and cost effective way to put these deals
behind them," stated Mark W. Everson,
IRS Commissioner.
Source: IR-2005-19, 10-27-05
