IRS offers settlement over 'abusive' tax scheme

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The Internal Revenue Service in the US has announced a settlement initiative for executives and more than 40 corporations that took part in an "abusive tax avoidance transaction" involving unreported income of $700m.

The scheme involved the transfer of stock options or restricted stock to family controlled entities, according to the IRS.

It said in a statement: "Executives, often facilitated by their corporate employers, transferred stock options to family controlled partnerships and other related entities typically created for the sole purpose of receiving the options and avoiding taxes on compensation income normally taxed to the executive.

"The tax objective was to defer for up to 30 years taxes on the compensation and, in many cases, resulted in the corporation deferring a legitimate dedu...

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