The first civil case over the tax shelter called “Son of Boss” went in favor of the IRS. Tax Court Judge David Laro granted summary judgment to the IRS in its case against RJT Investments X LLC in Omaha, Nebraska. The IRS argued that RJT created fake losses in order to lower its federal taxes.
The IRS has already settled with 1,200 businesses for $3.8 billion in taxes, interest, and penalties. This settlement was less than the maximum allowed by law. Another 600 taxpayers involved with the shelter were warned that if they did not accept the settlement, they would be assessed full taxes and penalties.
A criminal trial is upcoming for 18 individuals related to sales of tax shelters by KPMG LLP. 16 of those 18 are former KPMG executives. KPMG itself has agreed to deferred prosecution and a $456 million fine for its role in structuring and selling the illegal tax shelters.
RJT will owe millions in penalties and taxes.