Tax Shelter Malpractice Cases and Their Implications for Tax Compliance

Abstract

In malpractice lawsuits, taxpayers prevailed in courtrooms, around arbitration tables, and in settlement negotiations against peddlers of abusive tax shelters. This analysis illustrates how the tax shelter malpractice experience embodies many virtues that yield tax compliance. From these virtues emerge several important lessons on how to curb aggressive tax planning. Evident from these virtues and lessons is that malpractice litigation is a powerful tool in the sphere of tax compliance, and, where possible, reforms should be instituted to further promote its use.