Franchise Tax Board Subpoenas Insurers
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California tax regulators said they had subpoenaed client lists from two major insurance companies that might have insured questionable tax shelters against government intervention.
Accounting firms that were marketing the tax shelters lined up the insurance to persuade wary clients they wouldn’t lose their money, said Franchise Tax Board spokeswoman Denise Azimi. “It kind of closed the deal for some of these clients who were sitting on the fence.”
Now the board wants those client lists.
Illegal tax shelters cost the state $600 million to $1 billion a year, the tax board estimates. It defines the shelters as “transactions marketed with the promise of tax benefits with no correlating economic losses.”
Azimi said the names of the insurance companies were confidential.
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