The Internal Revenue Service Wednesday said that taxpayers who used a tax shelter known as “Son of Boss,” have until June 21 to accept an IRS settlement offer to resolve their tax issues.

Son of Boss was aggressively marketed in the late 1990s and 2000 to companies and high net-worth individuals. In August 2000, the IRS issued Notice 2000-44 declaring the transactions abusive and requiring promoters to maintain a list of investors.

“These transactions were developed and marketed by an interlocking network of commercial interests, including leading law firms, accounting firms and investment banks,” said IRS Commissioner Mark W. Everson. “Son of Boss deals had only one purpose - the elimination of tax. We encourage investors in these transactions to settle these disputes now to avoid more severe consequences later.”

Many of these transactions generated tax losses of between $10 million and $50 million, for an understatement of tax in excess of $6 billion, not including interest and penalties, the IRS said.

Taxpayers who come forward must agree to concede 100 percent of the claimed tax losses, the IRS said. They must also pay all applicable interest and penalties.

The IRS said taxpayers who do not come forward will receive a statutory notice of deficiency (90 day letter) disallowing all losses and out of pocket costs and will be assessed maximum applicable penalties.

“Taxpayers should not expect to settle court cases on terms more favorable than those offered in the IRS settlement initiative,” added IRS Chief Counsel Donald Korb. “The IRS will work closely with the Justice Department on Son of Boss cases.”

The IRS said it continues to become aware of many Son of Boss transactions through investor lists obtained in IRS promoter investigations and successful summons enforcement actions by the Department of Justice. The IRS said it has learned of at least 500 previously undisclosed transactions in the last 90 days alone.

(via Internal Revenue Service)