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B. The 1998 IRS Restructuring and Reform Act and the 1999 Joint Committee and Treasury Studies
1. The Joint Committee Study
2. The Treasury Department Study
C. Legislative Proposals Recommending Disclosure
1. The Joint Committee Recommendations
2. The Administration's 2001 Fiscal Year Budget Legislative Proposals
D. Evolution of Prior Reportable Transaction Rules
1. The Initial Regulations
a. Listed Transactions
b. Other Reportable Transactions
c. Exceptions to Disclosure of Other Reportable Transactions
2. The Disclosure Statement
E. Eliminated Reportable Transaction Categories
1. Delisted Transactions
a. Notice 98-5: Foreign Tax Credit Abuse Listed Transaction
b. Notice 2002-70: Producer-Owned Reinsurance Company Listed Transaction
2. Other Eliminated Reportable Transaction Categories
a. Significant Book-Tax Difference
(1) October 2002 Regulations
(2) 2003 Final Regulations
(3) Schedule M-3 and the Phase Out of the Significant Book-Tax Difference
b. Brief Asset Holding Period
II. Overview of Reportable Transaction Categories
A. "Entered Into"
B. Listed Transactions
1. Financial Products-Notice 2002-35, Notional Principal Contracts
2. Exempt Organizations/Charitable/Trusts
a. Regs. § 1.643(a)-8
b. Notice 2000-61
c. Notice 2003-77
d. Notice 2004-30
e. Notice 2008-34
a. Notice 2003-81
b. Notice 2004-20
c. Notice 2003-22
4. Mergers and Acquisitions
a. Regs. § 1.7701(l)-3
b. Notice 2001-16
c. Notice 2001-17
d. Notice 2001-45
a. Rev. Rul. 2002-69
b. Notice 2005-13
c. Notice 2003-55
6. Employee Plans and Executive Compensation
a. Rev. Rul. 90-105
b. Notice 95-34
c. Rev. Rul. 2003-6
d. Notice 2003-24
e. Notice 2004-8
f. Rev. Rul. 2004-20
g. Notice 2007-83
a. ASA Investering Partnership v. Comr.
b. Notice 2000-44
c. Notice 2002-50
a. Notice 99-59
b. Rev. Rul. 2000-12
c. Notice 2000-60
d. Notice 2002-21
e. Notice 2003-47
f. Rev. Rul. 2004-4
g. Notice 2004-31
h. Notice 2007-57
C. Confidential Transactions
D. Transactions with Contractual Protection
E. Loss Transactions
F. Transactions of Interest
G. Transactions with a Significant Book-Tax Difference (Removed in 2006)
H. Transactions Involving a Brief Asset Holding Period (Removed in 2007)
III. Listed Transactions
B. Description of Each of the 34 Listed Transactions
1. Rev. Rul. 90-105, "Deduction for Contributions of an Employer to an Employees' Trust or Annuity Plan and Compensation Under a Deferred-Payment Plan"
2. Notice 95-34, "Tax Problems Raised by Certain Trust Arrangement Seeking to Qualify for Exemption from Section 419"
3. ASA Investerings Partnership v. Comr.
4. Regs. § 1.643(a)-8
5. Notice 99-59, "Tax Avoidance Using Distributions of Encumbered Property"
6. Regs. § 1.7701(l)-3, "Recharacterizing Financing Arrangements Involving Fast-Pay Stock"
7. Rev. Rul. 2000-12
8. Notice 2000-44, "Tax Avoidance Using Artificially High Basis"
9. Notice 2000-60, "Stock Compensation Corporate Tax Shelter"
10. Notice 2000-61, "Trusts Not Considered Individuals for Purposes of Section 935" (so-called "Guamanian Trusts")
11. Notice 2001-16, "Intermediary Transactions Tax Shelter" and Notice 2008-111, "Substantially Similar Guidance"
12. Notice 2001-17, "Contingent Liability Tax Shelter"
13. Notice 2001-45, "Basis Shifting Tax Shelter"
14. Notice 2002-21, "Tax Avoidance Using Inflated Basis"
15. Notice 2002-35 and Notice 2006-16, "Tax Avoidance Using Notional Principal Contracts"
16. Notice 2002-50, "Partnership Straddle Tax Shelters"
17. Rev. Rul. 2002-69, "Lease In/Lease Out ("LILO") Transactions"
18. Rev. Rul. 2003-6, "Abuses Associated with S-Corporation ESOPs"
19. Notice 2003-22, "Offshore Deferred Compensation Arrangements"
20. Notice 2003-24, "Certain Trust Arrangements Seeking to Qualify for Exception for Collectively Bargained Welfare Benefit Funds Under § 419A(f)(5)"
21. Notice 2003-47, "Transfers of Compensatory Stock Options to Related Persons"
22. Notice 2003-55, "Accounting for Lease Strips and Other Stripping Transactions"
23. Notice 2003-77, "Improper Use of Contested Liability Trusts to Attempt to Accelerate Deductions for Contested Liabilities Under IRC 461(f)"
24. Notice 2003-81, "Offsetting Foreign Currency Option Contracts"
25. Notice 2004-8, "Abusive Roth IRA Transactions"
26. Rev. Rul. 2004-4, "Prohibited Allocations of Securities in an S Corporation"
27. Situation 2 of Rev. Rul. 2004-20, "Abusive Transactions Involving Insurance Policies in IRC 412(i) Retirement Plans"
28. Notice 2004-20, "Abusive Foreign Tax Credit Transactions"
29. Notice 2004-30, "S Corporation Tax Shelter Involving Shifting Income to Tax Exempt Organization"
30. Notice 2004-31, "Intercompany Financing Through Partnerships"
31. Notice 2005-13, "Sale-In Lease-Out Transactions" ("SILOs")
32. Notice 2007-57, "Loss Importation Transaction"
33. Notice 2007-83, "Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits"
34. Notice 2008-34, "Distressed Asset Trust (DAT) Transaction"
IV. Transactions with Contractual Protection
B. Contractual Protection
2. Refundable Fees
3. Contingent Fees
a. Circular 230
b. AICPA Rules Governing Contingent Fees in Tax Cases
C. Rev. Proc. 2007-20
V. Confidential Transactions
B. Confidential Transactions
1. Conditions of Confidentiality
2. Minimum Fee
VI. Section 165 Losses
B. Loss Thresholds
D. Exempted Transactions
1. Rev. Proc. 2003-24
a. Qualifying Basis
b. Other Losses
2. Rev. Proc. 2004-66
VII. Transactions of Interest
B. Effective Date
1. Notice 2007-72, "Contribution of Successor Member Interest"
2. Notice 2007-73, "Toggling Grantor Trust"
3. Notice 2008-99, "Sale of All Interests in Charitable Remainder Trust After Contribution of Appreciated Assets to Trust and Reinvestment of Such Assets by Trust"
4. Notice 2009-7, "Interposing a U.S. Partnership to Avoid Taxation of Subpart F Income of a CFC"
5. Notice 2009-55, "Transactions of Interest as of July 15, 2009"
VIII. Brief Asset Holding Period Transactions (Removed)
B. Who Participated
C. Removal of the Category as a Reportable Transaction
IX. Significant Book-Tax Difference (Removed)
C. Who Participated
D. The Exceptions
E. Schedule M-3
1. Schedule M-3 Arrives
2. Rev. Proc. 2004-45
F. Removal of Book-Tax as a Category of Reportable Transactions
X. Patented Tax Transactions (Proposed)
A. Proposed Applicability
C. Public Reaction
XI. Compliance Procedures
A. Initial Compliance Regulations
B. Final Regulations
1. Compliance for All Taxpayers: Form 8886
2. Electronic Filing
3. Flow-Through Entity Compliance Issues
4. Listed Transactions and Transactions of Interest
5. Loss Transactions
6. Pending Ruling Requests
7. Compliance by Certain Tax-Exempt Entities: Form 8886-T
a. Filing Requirements
b. Penalties Related to Form 8886-T
XII. Protective Disclosures
A. Effect of a Protective Disclosure
1. Penalty Protection
2. The IRS's Tax Accrual Workpaper Request Policy
B. Process for Making a Protective Disclosure
XIII. Penalties Related to Reportable Transactions
A. Sanctions Before Enactment of Monetary Penalties
B. Penalties Added by the 2004 AJCA
1. Failure to Disclose Participation in a Reportable Transaction (§ 6707A)
a. Application in General
b. Amount of Penalty
(1) Penalty for Failing to Disclose Participation in Reportable Transactions Other Than Listed Transactions
(2) Penalty for Failing to Disclose Participation in Listed Transactions
c. Rescission of Penalty in Limited Cases
d. Notice 2005-11
e. Rev. Proc. 2007-21
(1) Scope of Rev. Proc. 2007-21
(2) Application of Rescission Requests
f. Disclosure of Penalties in Publicly Filed Documents
g. Rev. Proc. 2005-51
h. Collection Moratorium for Some Tax Shelters Subject to § 6707A Penalty
i. Legislation to Curb § 6707A Penalty
2. Understatements Attributable to Reportable Avoidance Transactions (§ 6662A)
a. Application of the Understatement Penalty in General
b. Amount of Understatement
c. Penalty Amount
(1) Understatements Attributable to Properly Disclosed Reportable Avoidance Transactions
(2) Understatements Attributable to Undisclosed Reportable Avoidance Transactions
d. Reasonable Cause
e. Coordination with Penalties Under § 6662
f. Coordination With Other Penalties
g. Special Rules for Amended Returns
C. Other Issues
1. Accuracy-Related Penalties (§ 6662)
2. Limitations on Interest Abatement Under § 6404(g)
3. Unlimited Statute of Limitations on Assessment (§ 6501(c)(10))
b. October 2009 Proposed Regulations
D. Excise Tax on Certain Tax-Exempt Entities Entering into Prohibited Tax Shelter Transactions (§ 4965)
2. Amount of Tax Imposed
a. Tax on the Entity
b. Tax on the Entity Manager
c. Coordination with Other Taxes, Penalties
3. Disclosure of Reportable Transactions by Tax-Exempt Entities
4. Notices 2006-65 and 2007-9
5. Proposed Regulations
XIV. Private Letter Ruling Requests
XV. Exceptions for Regulated Investment Companies and Leasing Transactions
A. Exception for Regulated Investment Companies
B. Exception for Certain Leasing Transactions
2. Removal of the Leasing Exception
XVI. Record Retention
XVII. Section 6111/6112-Reporting and List Maintenance by Material Advisors
1. Former § 6111
2. Former § 6112
B. Post-2004 AJCA § 6111-Registration
1. Statutory Regime
b. Material Advisors: Defined
c. Reportable Transactions: Defined
d. Regulatory Authority
2. Guidance Under § 6111
a. Notice 2004-80 and the 2007 Final Regulations
(1) In General
(2) Tax Statement
(3) Minimum Fee
(4) When One Becomes a Material Advisor
b. Notice 2005-17
c. Notice 2005-22
1. 2004 AJCA Interim Guidance
2. Form 8918
D. Post-2004 AJCA § 6112 - List Maintenance
1. The List
2. Furnishing Lists to the IRS
3. Multiple Material Advisors
1. Failure to Register: § 6707
a. In General
2. Failure to Provide List: § 6708
F. Protective Disclosures
G. Former Form 8271
XVIII. State Reportable Transaction Overview
1. Reportable Transactions
F. New York
I. West Virginia
Table of Worksheets
Worksheet 1 Evolution of Reportable Transactions
Worksheet 2 List of IRS Guidance Regarding Reportable Transactions by Relevant Code Section
Worksheet 3 List of Relevant IRS Forms, Instructions, and Published Guidance
Worksheet 4 IRS Forms and Instructions
Worksheet 5 LMSB Mandatory IDR Announcement and Mandatory Listed Transaction IDR
United States Constitution:
Internal Revenue Manual:
IRS & Treasury Websites:
State Statutes & Regulations:
New York Websites:
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