The Tenth Circuit on Friday reversed a decision on appeal from the U.S. District Court for the District of Colorado in the case Sala v. United States, which involved a shelter used to generate tax losses to offset more than $60 million in income during the 2000 tax year.
The decision last week returned the IRS to the status of major victor in a string of Son-of-BOSS cases. Indeed, the earlier Colorado decision had been remarkable because it represented the only taxpayer win against the IRS after the tax authority started auditing the shelters in 2002, according to Paul L. Caron, the associate dean of faculty at the University of Cincinnati College of Law, and publisher of TaxProf Blog. ...
Designed to generate tax losses, the shelters grabbed public attention earlier in the decade, when accounting firms were found to have sold them to tax clients. In the nickname, with its organized crime overtones, BOSS stands for Bond and Option Sales Strategy.
Because of the recent decision, "all is now well in the Son-of-BOSS world," said Caron, who predicted that the IRS will "bat 1.000 from here on in in these cases."