Run, don't walk, away from huge tax saving strategies for high-net-worth clients that seem too good to be true.

That's the warning from some advisors and lawyers who say that the government is heightening its efforts to scrutinize tax reduction investment strategies for the well-heeled, such as the use of foreign parties or counter parties not covered by U.S. tax laws.

There are a number of other dicey, aggressive approaches: Life insurance payment schemes that substitute for contributions to qualified plans and the infamous Son of Boss transaction.

Advisors and attorneys warn that many of these strategies are not worth the risk of audit and possible civil and criminal penalties.

"When you let the tax tail wag the dog, you usually end up in trouble," says Peggy Ruhlin, a certified financial planner and a CPA with her own advisory business in Columbus, Ohio.

"You have to ask yourself, is the risk worth the reward of these strategies?" says Michael Delgass, a tax attorney in Hartford, Conn., with the firm of Day Berry & Howard. Exchange funds, which he notes have been become more widely used by individual investors with concentrated stock positions, can still be carefully employed to reduce taxes.

But "the Internal Revenue Service and Congress have progressively limited the way you can structure an exchange fund," he warns.

A more risky strategy, he says, is the so-called mixing bowl-trading shares of one fund for another through the use of a temporary partnership. "This is much more aggressive than trying the exchange fund. Mixing bowls are higher-risk techniques, but they're still being done," Delgass explains.

The investor is at risk because he is relying on avoiding anti-abuse rules when going in and out of the partnership. These rules are written very "broadly," Delgass says. That means the IRS is given much leeway in making a case against investors and advisors who use the mixing bowl.

"So if you have bad facts, if the IRS can show there was intention all the time just to avoid taxes, then the investor will end up with capital gains right from the beginning, which is what you were trying to avoid," Delgass cautions. He says the IRS will then argue that "you always knew, in going into the partnership, that you were going to get out at a certain date. This looks to [them] like an immediate sale."

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