Throughout the history of the United States, the regulation and collection of taxes has been one of the most controversial and debated topics in the accounting world. Although taxes serve countless purposes, ranging from paying for services to reducing the national deficit, they play the basic role in providing the government with the funding necessary to grow. On the other hand though, the individuals and business that pay these taxes also rely heavily on maintaining their own funds in order to function and survive. It is this constant necessity for capital that gives way to much of the debate within tax accounting. In the United States, citizens and taxable businesses have an obligation to pay taxes to the government’s tax collecting body, the Internal Revenue Service. The IRS functions as the implementing body for the U.S. tax laws found in the Internal Revenue Code. While the IRC serves as the main source of regulation for taxation, actual implementation is a very subjective issue and left open to multiple interpretations. Within the IRC, taxpayers are entitled to numerous deductions that, in essence, reduce their tax liability. The ability to reduce taxes creates an incentive to analyze the Code and utilize every method possible that will help save money. This practice, in turn, opens the door for tax avoidance and aggressive tax accounting. One of the most aggressive tax issues that the IRS faces is the usage of tax shelters. A tax shelter is an investment that utilizes loopholes in order to avoid the payment of taxes. Many tax shelters that have been developed are considered completely legal and follow the IRC properly, serving some major economic purpose. In the late twentieth century, it became common practice for big accounting firms to develop and market different tax shelters in order to reduce their client’s tax liabilities. Some of the tax