A tax shelter is a financial method or investment scheme that is created primarily to reduce or delay a person’s or businesses taxable income or tax liability. Common tax shelters include retirement accounts like a 401k, which allows an individual to defer taxes until they withdraw that income from their accounts. However, abusive tax shelters, or tax evasions, are regulated by the IRS and federal statutes and promoting abusive tax shelters is punishable by fine.
For more information regarding the registration of tax shelters, please visit 26 CFR § 301.6111-1T - Questions and answers relating to tax shelter registration.
See also: IRS webpage for Abusive Tax Shelters and Transactions
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