The IRS announced on Monday (IR-2005-72) two developments in its ongoing tax shelter settlement initiatives:

• The IRS has reached settlements with 95 of the 114 corporate executives targeted in the stock option tax shelter:

The initiative provided corporate executives and their companies a means to resolve an abusive tax transaction involving the transfer of stock options to family controlled partnerships. Through this abusive stock option scheme, executives attempted to defer tax on stock option income for up to 30 years. The settlement required executives to include 100% of their stock option compensation in income, pay applicable interest, income and employment taxes, and pay a 10% penalty…. Those executives who elected to participate or otherwise resolved their tax liability have $500 million in potential income adjustments. The IRS estimates that the 19 executives who did not participate in the settlement offer underreported their income by more than $400 million.  [For prior coverage, see here.]

• The IRS has reached settlements with 1,200 of the 2,000 taxpayers targeted in the Son of Boss tax shelter:

More than 1,200 electing taxpayers have qualified to participate in this offer. The taxes, interest and penalties collected from this group has now topped $3.7 billion…. About 750 taxpayers did not elect or did not qualify to participate in the Son of Boss settlement offer. The IRS will continue to pursue these cases through audits and the normal litigation process. So far, more than 100 Son of Boss cases are in court and the IRS expects the first cases to go to trial by early fall.