limited partnership the IRS believes is claiming illegal tax deductions. This type of shelter usually inflates the value of purchased property, thus providing a basis for higher depreciation write-offs. When the IRS disallows the write-offs, back taxes as well as interest charges and high penalties must be paid.

any investment used to avoid taxes that is not in compliance with the law, such as a limited partnership the Internal Revenue Service deems to be claiming illegal tax deductions -typically, one that inflates the value of acquired property beyond its fair market value. If these writeoffs are denied by the IRS, investors must pay severe penalties and interest charges, on top of back taxes.

tax shelter claiming illegal tax deductions. For example, a limited partnership inflates the value of acquired property beyond its fair market value in order to claim excessive depreciation deductions. If these writeoffs are denied by the IRS, investors must pay severe penalties, interest, and back taxes.

illegal tax deduction (as determined by the Internal Revenue Service) taken under the auspices of a limited partnership. One abuse of taxes is inflating the value of purchased assets far beyond their fair market value. Once the IRS determines that tax deductions are illegal, participants in the limited partnership are subject to the payment of back taxes, interest due on the back taxes, and penalties.