San Diego Tax Avoidance Transactions
Counsel from a Qualified & Skilled IRS Lawyer
When it comes to recognizing an abusive tax avoidance transaction, it can be very challenging. You have the right to minimize your tax liability through legitimate investments, but when this crosses over into abusive tax avoidance transactions with the aim to eliminate or minimize your liability, it can become a serious issue with the IRS.
Without the help a seasoned San Diego IRS attorney, you could be facing serious consequences and find yourself in more financial trouble than expected. You need to discuss your case with Milikowsky Tax Law today to get the support and representation you need during this time. We are here to help you understand your options and how to navigate this overwhelming time.
Reach out to our San Diego IRS lawyer today or fill out a free case evaluation to get immediate counsel.
What is considered an abusive tax avoidance transaction?
Recognizing these abusive or strategic tax avoidance actions can be tricky, especially because they can seem to be legitimate and in many cases, could be considered legitimate. So where does the IRS draw the line? That can be different on a case by case basis.
The following are features of an abusive tax avoidance transaction or investment:
- Inflated tax savings compared to your actual investment
- Little or no income or capital appreciation generated from the transaction
- The main purpose is to avoid or evade federal income taxes
- There is no business purpose other than to reduce taxes
- The investment or transaction is marketed primarily as tax reducing opportunity
It is so crucial that you take time to investigate your transactions or investments, especially those that promise to reduce or minimize your tax liability. Though these opportunities may seem legitimate at first, they can quickly cause you to run into trouble with the IRS.
You can find a list of numerous identified abusive tax avoidance transactions from the IRS on their official website. Some of these include abusive foreign tax credit transactions, distressed asset trusts (DAT), abusive Roth IRA transactions, stock compensation transactions, debt straddles, voluntary employee beneficiary association, and many others.