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MOM AND DAD BREAK UP TAX SHELTER PARTY

January 28, 2003

Uh-oh. Quick! Here comes Mom and Dad! Hide the Keg! Oh, and ditch the Son of BOSS transactions and the CARDS*!

Yes, the parents are home, and the tax shelter party is over, says Pamela F. Olson, Treasury Assistant Secretary for Tax Policy. She had some stern words for practitioners and promoters in a speech to the USC Law School Tax Institute:

"The IRS knows about the transactions and has done nothing to shut them down so obviously things are copacetic, right? Wrong. We can argue about whether promoters should have known the difference between approval and neglect. But, many did not understand that – or they chose to believe otherwise – and so tax practice deteriorated without adult supervision.

"Well, folks, the parents have arrived at the party."

Just who are the parents? The father may be B. John Williams, IRS Chief Counsel; Ms. Olsen names him as a key figure in the effort. Whether Ms. Olsen is the mother, or is merely providing a motherly admonition, remains unclear.

What is clear is the Treasury's emphasis on shutting down heavily-retailed tax avoidance schemes.

*"Custom Adjusted Rate Debt transactionS"

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