Syndicated Conservation-Easement and Captive Insurance, the IRS will audit you. Get all your money back

Syndicated Conservation-Easement and Captive Insurance, the IRS will audit you. Get all your money back Once again, tax shelter promoters have re-named, re-packaged, and combined some old and recognizably illegal and abusive tax shelters in order to defraud a new set of unsuspecting taxpayers. The so-called “Syndicated Conservation Easement” tax shelter is the latest example. The Syndicated Conservation Easement is designated as a “Listed Transaction”. This means, in plain-speak, that once the IRS becomes aware that you asserted tax deductions from a Syndicated Conservation Easement tax strategy, the IRS will be looking for you to pay back taxes, interest, and a penalty. If you were sold one of these Easement strategies, you should be looking into the possibility of a malpractice and fraud case against the promoters. Here’s why. THE SYNDICATED CONSERVATION EASEMENT SHELTER IS A RE-TREAD AND VARIANT OF TWO TAX SHELTERS PREVIOUSLY REJECTED BY THE IRS First, the IRS is taking aggressive action to identify and disallow any benefits claimed by a taxpayer that participated in a Syndicated Conservation Easement. The IRS will find you by simply issuing subpoenas to the promoters that sold the Easement to you. And don’t let any promoter tell you otherwise, nearly every major player (accountants, banks, law firms) in the tax shelter business lost the “fight the subpoena” in the tax shelter cases that ensued over 1999 – 2005. In those cases, many tax shelter promoters advised their clients to play the “audit lottery” and not divulge their participation in the tax shelters at issue. This proved to be a very expensive and bad gamble for those taxpayers. The IRS figured out who the involved taxpayers were, and, often, by the time that happened, the taxpayers had not sued the promoters civilly and the statutes of limitations had run. Second, the Syndicated Conservation Easement is really nothing more than a play on the previously failed and rejected “tax strategies” known as the SC2 or “S-Corp Charitable Contribution Strategy” and the “DAD” or “Distressed Asset/Debt” strategy from fifteen years ago. CAPTIVE INSURANCE AUDITS Shortly after the Internal Revenue Service (IRS) again warned taxpayers to "steer clear" of unscrupulous promoters selling abusive micro-captives as part of its annual "Dirty Dozen" listing and the IRS Large Business and International (LB&I) Division touted the success of its partnership with the Small Business/Self-Employed Division in carrying out the micro-captive "campaign," the US Tax Court handed the IRS its third straight victory involving a small captive structure in Syzygy v. Commissioner.1 Six days after the Syzygy opinion was issued, LB&I announced the initiation of a "Captive Services Provider Campaign" aimed at ensuring US multinational companies pay their captives no more than arm's-length prices.2 The IRS is clearly moving quickly to address tax compliance issues in the captive world. The IRS has now obtained victories in cases involving both forms of small captives under the Internal Revenue Code: captives electing tax-exempt status under § 501(c)(15) and captives electing to be taxed only on investment income under § 831(b). With each victory in court, the IRS has succeeded in highlighting problematic program design features and implementation missteps. Going forward, IRS revenue agents and appeals officers will likely look to the deficiencies identified in the case law in resolving captive controversies. Lance Wallach receives hundreds of calls annually to help people fight the IRS and get their money back from the promoters of these scams. As an expert witness, Lance's side has never lost a lawsuit. Google Lance Wallach and your advisor, who do you trust? 516-236-8440 Wallachinc@gmail.com