accounting firms, law firms, investment banks and brokerages busted for illegal tax shelters - Latest News and Financial Information | Reuters.com

Latest News and Financial Information | Reuters.com:

"WASHINGTON, March 24 (Reuters) - The U.S. Internal Revenue Service has recovered $3.2 billion in unpaid taxes, interest and penalties from users of the illegal 'Son of Boss' tax shelter, the agency said on Thursday.

The IRS deemed Son of Boss abusive in 2000 and has said it resulted in more than $6 billion in estimated understatements of taxes due from some 1,800 taxpayers. These were mostly wealthy individuals such as corporate executives seeking to shelter huge gains from business or stock sales during the late 1990s market boom.

'Son of Boss was not something people cooked up in a how-to book in their back yard,' IRS Commissioner Mark Everson told a news conference. 'This was something that was done by very sophisticated promoters' which included accounting firms, law firms, investment banks and brokerages.

Everson said the amount collected would reach $3.5 billion when all of the settlements are processed in a few months.

Son of Boss was a variant of another illegal tax shelter called the Bond and Options Sales Strategy. It used financial products, such as currency options and government securities, to create what the IRS called artificial tax losses that were used to offset big profits from asset sales."