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Laxalt Lobbies to Aid Investors in Tax Shelters

November 20, 1987|From the Washington Post

WASHINGTON — Former Sen. Paul Laxalt is lobbying the Treasury Department to allow wealthy individuals who have invested in questionable tax shelters to escape sizable interest and penalty charges in return for paying the back taxes the Internal Revenue Service says they owe.

The lobbying effort would save billions of dollars for hundreds of thousands of investors who obtained improper tax write-offs through the shelters, according to the IRS, which is opposed to the proposal. Law firms representing some of those investors hired Laxalt's law firm to push the proposal.

As a result of the plan, supporters estimate, federal tax receipts would rise by as much as $8.6 billion in 1988 and $1.2 billion in 1989. But the proposal would reduce revenues in subsequent years, in part because the Treasury would not be collecting interest and penalties on the contested tax claims.

Sends Plan to Treasury

Laxalt, a Nevada Republican and close friend of President Reagan, said through a spokesman that he has made a "full presentation" of the proposal to Treasury Secretary James A. Baker III, whose aides are analyzing the plan.

The proposal is the latest version of a long-running lobbying effort to seek relief for tax-shelter investors being pursued by the IRS. The various plans would cover controversial tax-reduction strategies involving a wide range of investments, from oil drilling and real estate to movie production, that were most popular in the late 1970s and early 1980s.

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