Quote of the Day - The only thing worse than an active conscience is one that's retroactive. - Harold Coffin
IRS Can't Apply The Internal Revenue Code Retroactively
The Internal Revenue Service just lost a six billion dollar case with the stroke of a federal judge's pen. The IRS had challenged the "Son of Boss" tax shelter invented by KPMG, and Judge T. John Ward ruled against the IRS' attempt to retroactively apply its revocation of the tax shelter. Generally speaking the IRS code itself prevents its retroactive application, but when you're talking lost revenues in the multiples of billions and you're the IRS, well . . . you try anyway.
According to the New York Times, the "Justice Department declined to comment on the ruling. Donald L. Korb, the I.R.S.ís chief counsel, said in a statement that the agency 'was still studying the opinion.' "
The ruling may likewise affect KPMG's payment of $456 million in criminal fines for use of the tax shelter, called "Blips." I'll make another bet here: KPMG asks for a refund.