IRS Office for Tax Pro Oversight Helping With Tax Shelter Cases

The IRS’s Office of Professional Responsibility, which ensures tax professionals adhere to tax practice standards and follow the law, is working with other parts of the agency to crack down on tax shelter promoters.

“We’re looking for opportunities to coordinate with other business units and focuses of the IRS,” Sharyn Fisk, director of OPR said Friday during a virtual conference hosted by the University of San Diego School of Law. That includes helping to crack down on professionals who helped organize and sell tax-dodging insurance and land conservation schemes, she said.

• The IRS has been focusing a lot of attention on ending abusive arrangements involving micro-captives, which are small insurance companies that can choose to pay tax only on their investment income under tax code Section 831(b). The agency is also prioritizing tax-avoiding syndicated conservation easement transactions that involve multiple people claiming a charitable deduction for donations of property that will be protected from future development under tax code Section 170(h).
• The IRS has won several U.S. Tax Court cases and extended settlement offers to some participants in both areas. Officials have been urging investors to take the more-recent conservation easement offer, saying they’re unlikely to get a better deal by pursuing litigation.