Abusive Tax Shelter
An investment scheme that claims reduce income tax without changing the value of the user's income or assets. Abusive tax shelters serve no economic purpose other than lowering the federal or state tax owed when filing. Often, these schemes channel funds through trusts or partnerships to avoid taxation.

Investopedia Says:
People who invest in abusive tax shelters can be penalized by the Internal Revenue Service (IRS). Typically, when the IRS determines someone has used such a scheme, the person will owe back taxes with accrued interest.

To help taxpayers recognize potential schemes, the IRS has compiled a list of transactions that are abusive tax shelters. If a tax shelter resembles a listed transaction, it is considered abusive and the users may face penalties.

Related Terms:
Income Tax
Internal Revenue Service - IRS
Tax Avoidance
Tax Evasion
Tax Haven
Tax Shelter

• Interest Rate Floor
• Interest Rate Options
• Interest Rate Parity
• Interest Rate Parity
• Interest Rate Risk
• Interest Rate Swap
• Interest Sensitive Stock
• Interim Dividend
• Intermarket Analysis
• Intermarket Sector Spread
• Intermarket Spread
• Intermarket Spread Swap
• Intermediate/Medium-Term Debt
• Internal Audit
• Internal Auditor
• Internal Controls
• Internal Growth Rate
• Internalization
• Internal Rate Of Return (IRR)
• Internal Rate Of Return (IRR)
• Internal Revenue Service (IRS)
• Internal Revenue Service (IRS)
• International Accounting Standards (IAS)
• International Accounting Standards (IAS)
• International Association of Financial Engineers (IAFE)