The Internal Revenue Service is pursuing back taxes from dozens of Twin Falls-area professionals after a federal appeals court invalidated their tax shelter.
A panel of the 9th U.S. Court of Appeals recently ruled Professional and Executive Leasing Inc., a local corporation formed to provide tax benefits to dozens of doctors, lawyers and business people, was not the legal employer of those professionals.Therefore, it could not offer retirement plans to the 47 or more who signed who signed contracts with the corporation.
Professional Leasing advertised itself as an employee-leasing operation. It hired professionals and leased them back to practices or businesses - generally their own.
The arrangement, according to Professional's literature, provided a very liberal fringe-benefit package and retirement plan without having to offer the same benefits to office employees.
Professional's attorney, Thomas G. Walker Jr., argued the individuals covered by the company were employees of the corporation, who could be fired or reassigned by management.