[1]You know the old saying: “If it sounds too good to be true, it probably is.” Now the IRS is using the cliche to enforce a new penalty. In a recent decision involving a Son-of-BOSS tax shelter transaction, the taxpayer received opinions from not only the law firm associated with the tax shelter but also an independent law firm and a major accounting firm. Despite his seeming to cover his bases, the taxpayer ultimately was still penalized by the IRS because he should have know the claimed result offered by the shelter was “too good to be true.”
If you encounter a tax situation that’s “too good to be true”, make sure to think twice and always ask us to review it.