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Treasury, IRS Shut Down Guam-Based Tax Shelter WASHINGTON, D.C., Nov. 23, 2000 (SmartPros) Continuing a crackdown on corporate tax shelters, the Treasury Department and the Internal Revenue Service slammed the door on a tax shelter that involves using Guam-based trusts to avoid U.S. and Guamanian tax liability. Under the scheme, taxpayers claim part of the Internal Revenue Code applies to a Guam-based trust in a manner that relieves the trust of all U.S. income tax liability. The trust also claims a rebate from Guam of all Guam income taxes paid, relieving the trust of all income tax liability. In Notice 2000-61 issued Tuesday, the Treasury and the IRS alerted taxpayers and promoters that section 935 of the tax code applies to relieve only individuals of the burden of filing two tax returns. The Treasury said the law does not apply to trusts, and therefore doesn't relieve a Guam-based trust of any U.S. tax liability. The full notice is posted online at www.treas.gov/press/releases/ps1041.htm. Send comments to information@smartpros.com. |
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