Focus on...Abusive Roth IRA Transactions

Abstract:     
As part of its effort to combat abusive tax shelter schemes and transactions, the IRS has launched a new section on the Retirement Plan page of its Web site, the 'EP Abusive Tax Transactions' section. The IRS has identified eight transactions involving employee benefit plans as "listed transactions." The IRS has made clear its intention of shutting down the listed transactions that it has identified, and of denying to taxpayers the tax benefits they sought. Most practitioners are likely to conclude that simply to ignore the reporting and other requirements is unduly aggressive, if not unethical. With ordinary income, dividend tax rates, and capital gains rates at their current low levels, the best (and cheapest, in the long run) advice for even the most tax-adverse client is to steer clear of listed transactions.

Number of Pages in PDF File: 7

Keywords: tax shelters, retirement, Roth IRA

Accepted Paper Series