Microsoft Ruling Highlights Need to Document Biz Decisions
By Natalie Olivo
January 30, 2020
A Washington federal judge recently took a broad interpretation of what constitutes a tax shelter when ordering Microsoft to turn over documents to the Internal Revenue Service — a decision that companies shouldn’t ignore during their own correspondence with practitioners.
The judge based his definition of a tax shelter on Internal Revenue Code Section 6662 , which describes such arrangements as having “a significant purpose” of tax avoidance or evasion. But such a literal reading of the statute could cover routine tax advice, according to Linda Galler, a professor at the Hofstra University Maurice A. Deane School of Law.
“When you talk about routine advice that a tax professional gives a client, the mere fact that there is a significant tax issue — putting statutory language aside — in my mind doesn’t mean that we’re talking about a tax shelter,” she said.
Read the full article on the Law360 website.