Abusive Tax Shelter 2

Definition of "Abusive tax shelter"

Illegal tax deduction (as determined by the Internal Revenue Service) taken under the auspices of a limited partnership. One abuse of taxes is inflating the value of purchased assets far beyond their fair market value. Once the IRS determines that tax deductions are illegal, participants in the limited partnership are subject to the payment of back taxes, interest due on the back taxes, and penalties.

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