How long can it take the IRS to bust someone?

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I’ve got egg on my face with quite a few clients.

There is a popular tax strategy that everyone is talking about and some firms are no doubt making millions selling.  No, I’m not exaggerating, they’ve easily made over a million selling this idea.  Unfortunately I refuse to sell the strategy.

The challenge is that while the IRS came out in 08 and said they didn’t like the idea, there has been no further action on the part of the service.  So now clients either think I’m not aware of the strategy or think that I don’t know what I’m doing.  Nothing like getting a call from a client who talked to me 5 years ago who asks what has happened to the people promoting the idea that would have saved my client a couple hundred thousand a few years ago.  My response it typically a meek, “No action yet.”

A similar situation occurred over 10 years ago.  There was a tax shelter being sold and anybody who was anybody hopped on the band wagon and started selling this thing.  Once again I didn’t think it was going to work and probably lost quite a few clients because of my reticence.

Last week I was rewarded for not hopping on the bank wagon 10 years ago.  A number of the tax shelter promoters were found guilty after a six week trial.  This just illustrates a phrase I heard from a US attorney a few years back, “The wheels of justice grind exceedingly slow, but fine.”

If you want a second look at your current tax planning or tax strategizing, give us a call.  We’ll be upfront with out bias’s pro or con and let you make an informed decision.