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Federal Register / Vol. 72, No.

149 / Friday, August 3, 2007 / Rules and Regulations 43157

material advisor will not be considered Notice 2005–22 (2005–12 IRB 756) (see prescribe. Section 6111(a), as amended,
to have complied with the list § 601.601(d)(2)). also provides that the return must be
maintenance provisions in section 6112 filed not later than the date specified by
Kevin M. Brown,
and this section. A material advisor the Secretary. Section 6111(b)(1), as
Deputy Commissioner for Services and amended, provides a definition for the
must make the list or each component Enforcement.
of the list available to the IRS within the term material advisor and includes as
Approved: July 25, 2007. part of that definition a requirement that
period prescribed in section 6708 or
Eric Solomon, the material advisor derive certain
published guidance relating to section
Assistant Secretary of the Treasury (Tax threshold amounts of gross income that
6708. Policy). the Secretary may prescribe. The AJCA
(2) Claims of privilege. Each material [FR Doc. 07–3787 Filed 7–31–07; 11:22 am] amendments to section 6111 also
advisor who is required to maintain a BILLING CODE 4830–01–P authorize the Secretary to prescribe
list with respect to a reportable regulations that provide: (1) That only
transaction, must still maintain the list one person shall be required to meet the
pursuant to the requirements of this DEPARTMENT OF THE TREASURY requirements of section 6111(a) in cases
section even if a person asserts a claim in which two or more persons would
of privilege with respect to the Internal Revenue Service otherwise be required to meet such
information specified in paragraph requirements; (2) exemptions from the
(b)(3)(iii)(B) of this section. 26 CFR Part 301 requirements of section 6111; and (3)
[TD 9351] rules as may be necessary or appropriate
(f) Designation agreements. If more
to carry out the purposes of section
than one material advisor is required to RIN 1545–BE26 6111. Section 815 of the AJCA is
maintain a list of persons for a effective for transactions with respect to
reportable transaction, in accordance AJCA Modifications to the Section
6111 Regulations which material aid, assistance, or advice
with paragraph (b) of this section, the is provided after October 22, 2004.
material advisors may designate by AGENCY: Internal Revenue Service (IRS), In response to the AJCA, the IRS and
written agreement a single material Treasury. Treasury Department issued interim
advisor to maintain the list or a portion ACTION: Final regulations. guidance on section 6111 in Notice
of the list. The designation of one 2004–80 (2004–2 CB 963); Notice 2005–
material advisor to maintain the list SUMMARY: This document contains final 17 (2005–1 CB 606); Notice 2005–22
does not relieve the other material regulations under section 6111 of the (2005–1 CB 756); and Notice 2006–6
advisors from their obligation to furnish Internal Revenue Code that provide the (2006–5 IRB 385) (see § 601.601(d)(2)).
the list to the IRS in accordance with rules relating to the disclosure of On November 1, 2006, the IRS and
paragraph (e)(1) of this section, if the reportable transactions by material Treasury Department issued a notice of
designated material advisor fails to advisors. These regulations affect proposed rulemaking and temporary
furnish the list to the IRS in a timely material advisors responsible for and final regulations under sections
manner. A material advisor is not disclosing reportable transactions under 6011, 6111, and 6112 (REG–103038–05,
relieved from the requirement of this section 6111 and material advisors REG–103039–05, REG–103043–05, TD
section because a material advisor is responsible for keeping lists under 9295) (the November 2006 regulations).
unable to obtain the list from any section 6112. The November 2006 regulations were
designated material advisor, any DATES: Effective Date: These regulations published in the Federal Register (71
designated material advisor did not are effective August 3, 2007. FR 64488, 71 FR 64496, 71 FR 64501,
FOR FURTHER INFORMATION CONTACT:
71 FR 64458) on November 2, 2006.
maintain a list, or the list maintained by The IRS and Treasury Department
any designated material advisor is not Charles D. Wien, Michael H. Beker, or
received written public comments
complete. Tolsun N. Waddle, 202–622–3070 (not a
responding to the proposed regulations
toll-free number).
(g) Effective/applicability date. In and held a public hearing regarding the
general, this section applies to SUPPLEMENTARY INFORMATION: proposed rules on March 20, 2007. After
transactions with respect to which a Background consideration of the comments received
material advisor makes a tax statement and comments made at the hearing, the
This document contains final proposed regulations are adopted as
under § 301.6111–3 on or after August 3,
regulations that amend 26 CFR part 301 revised by this Treasury decision. These
2007. However, this section applies to by providing rules relating to the
transactions of interest entered into on final regulations generally retain the
disclosure of reportable transactions by provisions of the proposed regulations
or after November 2, 2006, with respect material advisors under section 6111.
to which a material advisor makes a tax but include some modifications based
The American Jobs Creation Act of on recommendations in the public
statement under § 301.6111–3 on or 2004, Public Law 108–357 (118 Stat.
after November 2, 2006. Otherwise, the comments.
1418), (AJCA) was enacted on October
rules that apply before August 3, 2007 22, 2004. Section 815 of the AJCA Summary of Comments and
are contained in § 301.6112–1 in effect amended section 6111 to require each Explanation of Provisions
prior to August 3, 2007 (see 26 CFR part material advisor with respect to any Nine written comments were received
301 revised as of April 1, 2007), and see reportable transaction to make a return in response to the NPRM. All comments
also Notice 2004–80 (2004–50 IRB 963); (in such form as the Secretary may were considered and are available for
Notice 2005–17 (2005–8 IRB 606); and prescribe) setting forth: (1) Information public inspection upon request.
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identifying and describing the
transaction; (2) information describing Reportable Transaction Number
any potential tax benefits expected to The proposed regulations provide that
result from the transaction; and (3) such a material advisor must provide a
other information as the Secretary may reportable transaction number to all

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43158 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Rules and Regulations

taxpayers and material advisors to unless the facts and circumstances necessary information described in
whom the material advisor makes or prove otherwise, if 70 percent or more sections 6111 and 6112. The designation
provides tax statements. Many of the tax benefits from a reportable agreement allows material advisors, if
commentators commented that the transaction are provided to natural they choose, to have one material
requirement to provide the reportable persons (looking through any advisor comply with the disclosure and
transaction number to all taxpayers and partnerships, S corporations, or trusts) list maintenance obligations rather than
material advisors to whom the material then substantially all of the tax benefits multiple advisors maintaining
advisor makes or provides tax will be considered to be provided to duplicative lists. Inherent in the
statements is overly broad and natural persons. language is the assumption that the
suggested, instead, that the reportable designated material advisor will comply
Material Advisor Disclosure of the
transaction number only be required to with the requirements. Absolving the
Identity of Other Material Advisors
be furnished to those for whom the non-designated material advisors from
taxpayer acted as a material advisor. The proposed regulations provide that the obligations listed in sections 6111
One commentator recommended that a material advisor who is required to file and 6112 for good faith designation
the regulation be amended to remove a disclosure statement must also agreements would require the IRS to
the obligation to provide a reportable disclose the identity of other material determine whether the designation
transaction number. Another advisors. Two commentators agreement was entered into in good
commentator recommended that a recommended that these final faith and would increase the burdens on
material advisor should be required to regulations be amended to provide that tax administration.
provide the reportable transaction a material advisor must provide the
identity of other material advisors only Form 8271
number to taxpayers only in the case of
marketed transactions. The if the material advisor has actual Before the enactment of the AJCA,
commentator also commented that in a knowledge of such other material section 6111 provided that tax shelter
purely one-on-one, non-abusive advisors. organizers were required to provide
transaction, the use of the reportable After carefully considering the investors in tax shelters the registration
transaction number may infringe upon recommendation by the commentators, number for the tax shelter. Section
the attorney-client relationship. these final regulations provide that a 301.6111–1T, Q&A 55, requires
The IRS and Treasury Department material advisor must provide the investors to report the registration
attempted to balance the need for identities of any material advisor(s) who number of the tax shelter to the IRS on
disclosure of reportable transactions the material advisor knows or has Form 8271, ‘‘Investor Reporting of Tax
with the resulting burden imposed upon reason to know acted as a material Shelter Registration Number’’, and
taxpayers. The IRS and Treasury advisor with respect to the transaction. attach the Form 8271 to any return on
Department do not believe that which any deduction, loss, credit, or
Designation Agreements
requiring a material advisor to provide other tax benefit attributable to the tax
a reportable transaction number to The proposed regulations provide that shelter is claimed. Because only a few
certain taxpayers and material advisors if more than one material advisor is investors must still file Form 8271 for
imposes an undue burden upon required to disclose a reportable pre-AJCA section 6111 tax shelters and
taxpayers in light of the benefit to tax transaction under section 6111, the because the IRS already is aware of
administration. However, the IRS and material advisors may designate by these transactions, the IRS and Treasury
Treasury Department recognize that written agreement a single material Department have decided that investors
requiring the reportable transaction advisor to disclose the transaction. The are no longer required to file Forms
number to be provided to all persons for designation of one material advisor to 8271 otherwise due on or after August
whom the material advisor made a tax disclose the transaction does not relieve 3, 2007. The Form 8271 will be
statement may be unnecessary. the other material advisors of their obsoleted. However, these final
Therefore, these final regulations state obligation to disclose the transaction to regulations continue to require that
that a material advisor is required to the IRS in accordance with section material advisors must provide the
provide a reportable transaction number 6111, if the designated material advisor reportable transaction number to all
to all taxpayers and material advisors fails to disclose the transaction to the taxpayers and material advisors for
for whom the material advisor acts as a IRS in a timely manner. One whom the material advisor acts as a
material advisor. commentator recommended that a good material advisor.
faith participation in a designation
Material Advisor Fee Threshold agreement be treated as if the non- Special Analyses
Language designated material advisor has satisfied It has been determined that this
The proposed regulations provide, in the advisor’s obligations under section Treasury decision is not a significant
general, that a lower threshold amount 6111 and/or section 6112. The regulatory action as defined in
of gross income applies in the case of a commentator also suggested that if the Executive Order 12866. Therefore, a
reportable transaction when previous recommendation is not regulatory assessment is not required. It
substantially all of the tax benefits are adopted, that these final regulations also has been determined that section
provided to natural persons (looking prohibit designation agreements 553(b) of the Administrative Procedure
through any partnerships, S entirely. Act (5 U.S.C. chapter 5) does not apply
corporations, or trusts). The IRS and These final regulations do not adopt to these regulations, and because these
Treasury Department received the recommendation of the regulations do not impose a collection
comments asking for clarification of the commentator. The purpose of the of information on small entities, the
term ‘‘substantially all of the tax designation agreement language is to provisions of the Regulatory Flexibility
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benefits.’’ reduce the burden on material advisors Act (5 U.S.C. chapter 35) do not apply.
The final regulations provide that the in complying with the disclosure and The return referenced in these
determination of whether the lower list maintenance regulations while regulations will be made available for
threshold amount applies is based on balancing the need of the IRS and public comment in accordance with the
the facts and circumstances. Generally, Treasury Department to receive the Paperwork Reduction Act of 1995 (44

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Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Rules and Regulations 43159

U.S.C. chapter 35). Pursuant to section and includes any series of steps carried benefit of the person making the
7805(f) of the Internal Revenue Code, out as part of a plan. statement, or the person making the
the notice of proposed rulemaking (2) Material aid, assistance, or statement knows the taxpayer’s
preceding these regulations was advice—(i) In general. Except as disclosure of the tax structure or tax
submitted to the Chief Counsel for provided in paragraph (b)(5) of this aspects of the transaction is limited in
Advocacy of the Small Business section, a person provides material aid, the manner described in § 1.6011–
Administration for comment on its assistance, or advice with respect to 4(b)(3) of this chapter.
impact on small business. organizing, managing, promoting, (C) Transactions with contractual
selling, implementing, insuring, or protection. A statement relates to a tax
Drafting Information carrying out any transaction if the aspect of a transaction that causes it to
The principal authors of these person makes or provides a tax be a transaction with contractual
regulations are Charles D. Wien, statement to or for the benefit of— protection if the statement concerns a
Michael H. Beker, and Tolsun N. (A) A taxpayer who either is required tax benefit related to the transaction and
Waddle, Office of the Associate Chief to disclose the transaction under either—
Counsel (Passthroughs and Special §§ 1.6011–4, 20.6011–4, 25.6011–4, (1) The taxpayer has the right to a full
Industries). However, other personnel 31.6011–4, 53.6011–4, 54.6011–4, or or partial refund of fees paid to the
from the IRS and Treasury Department 56.6011–4 of this chapter because the person making the statement or the fees
participated in their development. transaction is a listed transaction or a are contingent in the manner described
transaction of interest, or would have in § 1.6011–4(b)(4) of this chapter; or
List of Subjects in 26 CFR Part 301 been required to disclose the transaction (2) The person making the statement
Employment taxes, Estate taxes, under §§ 1.6011–4, 20.6011–4, 25.6011– knows or has reason to know that the
Excise taxes, Gift taxes, Income taxes, 4, 31.6011–4, 53.6011–4, 54.6011–4, or taxpayer has the right to a full or partial
Penalties, Reporting and recordkeeping 56.6011–4 of this chapter if the refund of fees (described in § 1.6011–
requirements. transaction had become a listed 4(b)(4)(ii) of this chapter) paid to
transaction or a transaction of interest another if all or part of the intended tax
Adoption of Amendments to the consequences from the transaction are
within the period of limitations in
Regulations § 1.6011–4(e) of this chapter; not sustained or that fees (as described
■Accordingly, 26 CFR part 301 is (B) A taxpayer who the potential in § 1.6011–4(b)(4)(ii) of this chapter)
amended as follows: material advisor knows is or reasonably paid by the taxpayer to another are
expects to be required to disclose the contingent on the taxpayer’s realization
PART 301—PROCEDURE AND transaction under § 1.6011–4 of this of tax benefits from the transaction in
ADMINISTRATION chapter because the transaction is or is the manner described in § 1.6011–
reasonably expected to become a 4(b)(4) of this chapter.
■ Paragraph 1. The authority citation (D) Loss transactions. A statement
transaction described in § 1.6011–4(b)(3)
for part 301 is amended by adding relates to a tax aspect of a transaction
through (5) or (7) of this chapter;
entries in numerical order to read, in (C) A material advisor who is required that causes it to be a loss transaction if
part, as follows: to disclose the transaction under this the statement concerns an item that
Authority: 26 U.S.C. 7805 * * * section because it is a listed transaction gives rise to a loss described in
Section 301.6111–3 also issued under 26 or a transaction of interest; or § 1.6011–4(b)(5) of this chapter.
U.S.C. 6111. (D) A material advisor who the (E) [Reserved].
■ Par. 2. Section 301.6111–3 is added to potential material advisor knows is or (iii) Special rules—(A) Capacity as an
read as follows: reasonably expects to be required to employee. A material advisor generally
disclose the transaction under this does not include a person who makes a
§ 301.6111–3 Disclosure of reportable section because the transaction is or is tax statement solely in the person’s
transactions. reasonably expected to become a capacity as an employee, shareholder,
(a) In general. Each material advisor, transaction described in § 1.6011–4(b)(3) partner or agent of another person. Any
as defined in paragraph (b) of this through (5) or (7) of this chapter. tax statement made by that person will
section, with respect to any reportable (ii) Tax statement—(A) In general. A be attributed to that person’s employer,
transaction, as defined in § 1.6011–4(b) tax statement is any statement corporation, partnership or principal.
of this chapter, must file a return as (including another person’s statement), However, a person shall be treated as a
described in paragraph (d) of this oral or written, that relates to a tax material advisor if that person forms or
section by the date described in aspect of a transaction that causes the avails of an entity with the purpose of
paragraph (e) of this section. transaction to be a reportable avoiding the rules of section 6111 or
(b) Material advisor—(1) In general. A transaction as defined in § 1.6011– 6112 or the penalties under section 6707
person is a material advisor with respect 4(b)(2) through (7) of this chapter. A tax or 6708.
to a transaction if the person provides statement under this section includes (B) Post-filing advice. A person will
any material aid, assistance, or advice tax result protection that insures some not be considered to be a material
with respect to organizing, managing, or all of the tax benefits of a reportable advisor with respect to a transaction if
promoting, selling, implementing, transaction. that person does not make or provide a
insuring, or carrying out any reportable (B) Confidential transactions. A tax statement regarding the transaction
transaction, and directly or indirectly statement relates to a tax aspect of a until after the first tax return reflecting
derives gross income in excess of the transaction that causes it to be a tax benefit(s) of the transaction is filed
threshold amount as defined in confidential transaction if the statement with the IRS. However, this exception
paragraph (b)(3) of this section for the concerns a tax benefit related to the does not apply to a person who makes
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material aid, assistance, or advice. The transaction and either the taxpayer’s a tax statement with respect to the
term transaction includes all of the disclosure of the tax treatment or tax transaction if it is expected that the
factual elements relevant to the structure of the transaction is limited in taxpayer will file a supplemental or
expected tax treatment of any the manner described in § 1.6011– amended return reflecting additional tax
investment, entity, plan or arrangement, 4(b)(3) of this chapter by or for the benefits from the transaction.

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43160 Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Rules and Regulations

(C) Publicly filed statements. A tax (whether or not related to the tax (5) Other persons designated as
statement with respect to a transaction consequences of the transaction), for material advisors. Published guidance
that includes only information about the services to implement the transaction, may identify other types or classes of
transaction contained in publicly for services to document the transaction, persons as material advisors.
available documents filed with the and for services to prepare tax returns (c) Definitions. For purposes of this
Securities and Exchange Commission no to the extent return preparation fees are section, the following definitions apply:
later than the close of the transaction unreasonable in light of all of the facts (1) Reportable transaction. The term
will not be considered a tax statement and circumstances. A fee does not reportable transaction is defined in
to or for the benefit of a person include amounts paid to a person, § 1.6011–4(b)(1) of this chapter.
described in paragraph (b)(2) of this including an advisor, in that person’s (2) Listed transaction. The term listed
section. capacity as a party to the transaction. transaction is defined in § 1.6011–
(3) Gross income derived for material For example, a fee does not include 4(b)(2) of this chapter. See also
aid, assistance, or advice—(i) Threshold reasonable charges for the use of capital §§ 20.6011–4(a), 25.6011–4(a), 31.6011–
amount—(A) In general. The threshold or the sale or use of property. The IRS 4(a), 53.6011–4(a), 54.6011–4(a), or
amount of gross income is $50,000 in will scrutinize carefully all of the facts 56.6011–4(a) of this chapter.
the case of a reportable transaction and circumstances in determining (3) Derive. The term derive means
substantially all of the tax benefits from whether consideration received in receive or expect to receive.
which are provided to natural persons connection with a reportable transaction (4) Person. The term person means
(looking through any partnerships, S constitutes gross income derived any person described in section
corporations, or trusts). For all other directly or indirectly for aid, assistance, 7701(a)(1), including an affiliated group
transactions, the threshold amount is or advice. For purposes of this section, of corporations that join in the filing of
$250,000. the threshold amount must be met a consolidated return under section
(B) Listed transactions and independently for each transaction that 1501.
transactions of interest. For listed is a reportable transaction and (5) Substantially similar. The term
transactions described in §§ 1.6011–4, aggregation of fees among transactions is substantially similar is defined in
20.6011–4, 25.6011–4, 31.6011–4, not required. § 1.6011–4(c)(4) of this chapter.
53.6011–4, 54.6011–4, or 56.6011–4 of (4) Date a person becomes a material (6) Tax. The term tax means Federal
this chapter, the threshold amounts in advisor—(i) In general. A person will be tax.
paragraph (b)(3)(i)(A) of this section are (7) Tax benefit. A tax benefit includes
treated as becoming a material advisor
reduced from $50,000 to $10,000 and deductions, exclusions from gross
when all of the following events have
from $250,000 to $25,000. For income, nonrecognition of gain, tax
occurred (in no particular order)—
transactions of interest described in credits, adjustments (or the absence of
(A) The person provides material aid,
§§ 1.6011–4, 20.6011–4, 25.6011–4, adjustments) to the basis of property,
assistance or advice as described in
31.6011–4, 53.6011–4, 54.6011–4, or status as an entity exempt from Federal
56.6011–4 of this chapter, the threshold paragraph (b)(2) of this section;
income taxation, and any other tax
amounts in paragraph (b)(3)(i)(A) of this (B) The person directly or indirectly consequences that may reduce a
section may be reduced as identified in derives gross income in excess of the taxpayer’s Federal tax liability by
the published guidance describing the threshold amount as described in affecting the amount, timing, character,
transaction. paragraph (b)(3) of this section; and or source of any item of income, gain,
(C) [Reserved]. (C) The transaction is entered into by expense, loss, or credit.
(D) Substantially all of the tax the taxpayer to whom or for whose (8) Tax return. The term tax return
benefits. For purposes of this section, benefit the person provided the tax means a Federal tax return and a
the determination of whether statement, or in the case of a tax Federal information return.
substantially all of the tax benefits from statement provided to another material (9) Tax structure. The tax structure of
a reportable transaction are provided to advisor, when the transaction is entered a transaction is any fact that may be
natural persons is made based on all the into by a taxpayer to whom or for whose relevant to understanding the purported
facts and circumstances. Generally, benefit that material advisor provided a or claimed Federal tax treatment of the
unless the facts and circumstances tax statement. transaction.
prove otherwise, if 70 percent or more (ii) Determining if the taxpayer (10) Tax treatment. The tax treatment
of the tax benefits from a reportable entered into the transaction. Material of a transaction is the purported or
transaction are provided to natural advisors, including those who cease claimed Federal tax treatment of the
persons (looking through any providing services before the time the transaction.
partnerships, S corporations, or trusts) transaction is entered into, must make (11) Taxpayer. The term taxpayer is
then substantially all of the tax benefits reasonable and good faith efforts to defined in § 1.6011–4(c)(1) of this
will be considered to be provided to determine whether the event described chapter.
natural persons. in paragraph (b)(4)(i)(C) of this section (12) Tax result protection. The term
(ii) Gross income derived directly or has occurred. tax result protection includes insurance
indirectly for the material aid, (iii) Listed transactions and company and other third party products
assistance, or advice. In determining the transactions of interest. If a transaction commonly described as tax result
amount of gross income a person that was not a reportable transaction is insurance.
derives directly or indirectly for identified as a listed transaction or a (13) Transaction of interest. The term
material aid, assistance, or advice, all transaction of interest in published transaction of interest is defined in
fees for a tax strategy or for services for guidance after the occurrence of the § 1.6011–4(b)(6) of this chapter. See also
advice (whether or not tax advice) or for events described in paragraph (b)(4)(i) of §§ 20.6011–4(a), 25.6011–4(a), 31.6011–
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the implementation of a reportable this section, the person will be treated 4(a), 53.6011–4(a), 54.6011–4(a), or
transaction are taken into account. Fees as becoming a material advisor on the 56.6011–4(a) of this chapter.
include consideration in whatever form date the transaction is identified as a (d) Form and content of material
paid, whether in cash or in kind, for listed transaction or a transaction of advisor’s disclosure statement—(1) In
services to analyze the transaction interest. general. A material advisor required to

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Federal Register / Vol. 72, No. 149 / Friday, August 3, 2007 / Rules and Regulations 43161

file a disclosure statement under this for a reportable transaction must be filed potential obligation of the person to
section must file a completed Form with the Office of Tax Shelter Analysis disclose the transaction under this
8918, ‘‘Material Advisor Disclosure (OTSA) by the last day of the month that section (or to maintain or furnish the list
Statement’’ (or successor form) in follows the end of the calendar quarter under § 301.6112–1) will not be
accordance with this paragraph (d) and in which the advisor became a material suspended during the period that the
the instructions to the form. To be advisor with respect to the reportable ruling request is pending.
considered complete, the information transaction or in which the (i) Effective/applicability date—(1) In
provided on the form must describe the circumstances necessitating an amended general. This section applies to
expected tax treatment and all potential disclosure statement occur. The transactions with respect to which a
tax benefits expected to result from the disclosure statement must be sent to material advisor makes a tax statement
transaction, describe any tax result OTSA at the address provided in the on or after August 3, 2007. However,
protection with respect to the instructions for Form 8918 (or a this section applies to transactions of
transaction, and identify and describe successor form). interest entered into on or after
the transaction in sufficient detail for (f) Designation agreements. If more November 2, 2006 with respect to which
the IRS to be able to understand the tax than one material advisor is required to a material advisor makes a tax statement
structure of the reportable transaction disclose a reportable transaction under under § 301.6111–3 on or after
and the identity of any material this section, the material advisors may November 2, 2006. Paragraph (h) of this
advisor(s) whom the material advisor designate by written agreement a single section applies to ruling requests
knows or has reason to know acted as material advisor to disclose the received on or after November 1, 2006.
a material advisor as defined in transaction. The transaction must be Otherwise, the rules that apply with
paragraph (b) of this section with disclosed by the last day of the month respect to transactions entered into
respect to the transaction. An following the end of the calendar before August 3, 2007 are contained in
incomplete form containing a statement quarter that includes the earliest date on Notice 2004–80 (2004–50 IRB 963);
that information will be provided upon which a material advisor who is a party Notice 2005–17 (2005–8 IRB 606); and
request is not considered a complete to the agreement became a material Notice 2005–22 (2005–12 IRB 756) (see
disclosure statement. A material advisor advisor with respect to the transaction § 601.601(d)(2)(ii)(b) in effect prior to
may file a single form for substantially as described in paragraph (b)(4) of this August 3, 2007.
similar transactions. An amended form section. The designation of one material (2) [Reserved].
must be filed if information previously advisor to disclose the transaction does
provided is no longer accurate, if not relieve the other material advisors of § 301.6111–3T [Removed]
additional information that was not their obligation to disclose the ■ Par. 3. Section 301.6111–3T is
disclosed becomes available, or if there transaction to the IRS in accordance removed.
are material changes to the transaction. with this section, if the designated
material advisor fails to disclose the Kevin M. Brown,
A material advisor is not required to file
an additional form for each additional transaction to the IRS in a timely Deputy Commissioner for Services and
taxpayer that enters into the same or manner. Enforcement.
substantially similar transaction. If the (g) Protective disclosures. If a Approved: July 25, 2007.
form is not completed in accordance potential material advisor is uncertain Eric Solomon,
with the provisions in this paragraph (d) whether a transaction must be disclosed Assistant Secretary of the Treasury (Tax
and the instructions to the form, the under this section, the advisor may Policy).
material advisor will not be considered disclose the transaction in accordance [FR Doc. 07–3788 Filed 7–31–07; 11:22 am]
to have complied with the disclosure with the requirements of this section BILLING CODE 4830–01–P
requirements of this section. and comply with all the provisions of
(2) Reportable transaction number. this section, and indicate on the
The IRS will issue to a material advisor disclosure statement that the disclosure DEPARTMENT OF DEFENSE
a reportable transaction number with statement is being filed on a protective
respect to the disclosed reportable basis. The IRS will not treat disclosure Department of the Army
transaction. Receipt of a reportable statements filed on a protective basis
transaction number does not indicate any differently than other disclosure 32 CFR Part 571
that the disclosure statement is statements filed under this section. For
a protective disclosure to be effective, [Docket No. USA–2007–0017]
complete, nor does it indicate that the
transaction has been reviewed, the advisor must comply with the RIN 0702–AA57
examined, or approved by the IRS. regulations under this section and
Material advisors must provide the § 301.6112–1 by providing to the IRS all Recruiting and Enlistments
reportable transaction number to all information requested by the IRS under AGENCY: Department of the Army, DoD.
taxpayers and material advisors for these sections.
(h) Rulings. If a potential material ACTION: Final rule.
whom the material advisor acts as a
material advisor as defined in paragraph advisor requests a ruling as to whether SUMMARY: The Department of the Army
(b) of this section. The reportable a specific transaction is a reportable has revised its regulation that prescribes
transaction number must be provided at transaction on or before the date that policies and procedures concerning
the time the transaction is entered into, disclosure would otherwise be required recruiting and enlistment into the
or, if the transaction is entered into under this section, the Commissioner in Regular Army and its Reserve
prior to the material advisor receiving his discretion may determine that the Components.
the reportable transaction number, submission satisfies the disclosure rules
DATES: Effective Date: September 4,
rmajette on PROD1PC64 with RULES

within 60 calendar days from the date under this section for that transaction if
the reportable transaction number is the request fully discloses all relevant 2007.
mailed to the material advisor. facts relating to the transaction which ADDRESSES: Deputy Chief of Staff, G–1,
(e) Time of providing disclosure. The would otherwise be required to be ATTN: DAPE-MPA, 300 Army
material advisor’s disclosure statement disclosed under this section. The Pentagon, Washington, DC 20310.

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