Encyclopedia of Investment Terminology

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Abusive Tax Shelter

Abusive tax shelters are transactions executed only for its tax benefit without an actual change in a taxpayer's assets, or income. Some of the most popular abusive tax schemes include the abusive structuring of foreign and domestic trusts, and the abuse of secrecy laws of some foreign nations, and the use and abuse of credit and debit cards from such territories, among many others.

The Internal Revenue Service has created a Criminal Investigation (CI) department to detect and combat these illegal tax schemes.

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