Qualified Amended Returns, 10037-10041 [05-3950]
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Federal Register / Vol. 70, No. 40 / Wednesday, March 2, 2005 / Rules and Regulations
Alternative Methods of Compliance
(AMOCs)
(j) The Manager, International Branch,
ANM–116, Transport Airplane Directorate,
FAA, has the authority to approve AMOCs
for this AD, if requested in accordance with
the procedures found in 14 CFR 39.19.
Related Information
(k) French airworthiness directive 2003–
376(B), dated October 1, 2003, also addresses
the subject of this AD.
Material Incorporated by Reference
(l) You must use Job Instruction Card 32–
11–00 RAI 10030–001, dated February 1,
2000, of the Avions de Transport Regional 42
Aircraft Maintenance Manual to perform the
actions that are required by this AD, unless
the AD specifies otherwise. The Director of
the Federal Register approves the
incorporation by reference of this document
in accordance with 5 U.S.C. 552(a) and 1 CFR
part 51. For copies of the service information,
contact Aerospatiale, 316 Route de Bayonne,
31060 Toulouse, Cedex 03, France. For
information on the availability of this
material at the National Archives and
Records Administration (NARA), call (202)
741–6030, or go to https://www.archives.gov/
federal_register/code_of_federal_regulations/
ibr_locations.html. You may view the AD
docket at the Docket Management Facility,
U.S. Department of Transportation, 400
Seventh Street SW., room PL–401, Nassif
Building, Washington, DC.
Issued in Renton, Washington, on February
17, 2005.
Ali Bahrami,
Manager, Transport Airplane Directorate,
Aircraft Certification Service.
[FR Doc. 05–3787 Filed 3–1–05; 8:45 am]
BILLING CODE 4910–13–P
AIR TRANSPORTATION
STABILIZATION BOARD
14 CFR Part 1310
Regulations for Air Transportation
Stabilization Board Under Section
101(a)(1) of the Air Transportation
Safety and System Stabilization Act
Air Transportation
Stabilization Board.
ACTION: Final rule.
AGENCY:
This supplemental regulation
is issued by the Air Transportation
Stabilization Board under section
102(c)(2)(B) of the Air Transportation
Safety and System Stabilization Act,
which authorizes the Air Transportation
Stabilization Board (the ‘‘Board’’) to
issue supplemental regulations for the
issuance of federal credit instruments.
The purpose of this supplemental
regulation is to allow the Board to
charge a fee for each amendment to, or
waiver of, any term or condition of any
SUMMARY:
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guaranteed loan document or related
instrument approved by the Board
relating to its air carrier guarantee loan
program. These regulations are effective
upon publication.
EFFECTIVE DATE: March 2, 2005.
FOR FURTHER INFORMATION CONTACT:
Mark R. Dayton, Executive Director, Air
Transportation Stabilization Board,
1120 Vermont Avenue, NW., Suite 970,
Washington, DC 20005, at (202) 622–
3550 or by e-mail to atsb@do.treas.gov.
SUPPLEMENTARY INFORMATION: On
October 12, 2001, the Office of
Management and Budget (the ‘‘OMB’’)
published a final rule (66 FR 52270), as
amended on April 9, 2002 (67 FR
17258), under section 102(c)(2)(B) of the
Air Transportation Safety and System
Stabilization Act (the ‘‘Act’’). That
section states that ‘‘the Director of the
Office of Management and Budget shall
issue regulations setting forth
procedures for application and
minimum requirements * * * for the
issuance of Federal credit instruments
under Section 101(a)(1)’’ of the Act.
Section 101(a)(1) authorizes the Board,
which is established by section
102(b)(1) of the Act, to issue certain
Federal credit instruments to assist air
carriers who suffered losses due to the
terrorist attacks of September 11, 2001,
and to whom credit is not otherwise
reasonably available, in order to
facilitate a safe, efficient, and viable
commercial aviation system in the
United States.
Section 102(c)(2)(B) of the Act
authorizes the Board to supplement the
regulations issued by OMB. On April 9,
2002, the Board published a
supplemental final rule (67 FR 17258)
under Section 102(c)(2)(B) of the Act
establishing administrative rules and
procedures. The Board has determined
that it is appropriate to issue
supplemental rules and procedures to
facilitate requests for amendments or
waivers to terms and conditions of
guaranteed loan documents or related
instruments approved by the Board.
Because this final rule relates to
public loan guarantees and does not
affect the substantive rights or
obligations of any person, notice and
public procedure are not required
pursuant to 5 U.S.C. 553(a). For the
same reasons, a delayed effective date is
not required pursuant to 5 U.S.C. 553(a)
and (d). This rule is not a ‘‘significant
regulatory action’’ for purposes of
Executive Order 12866, and because no
notice of proposed rulemaking is
required, the provisions of the
Regulatory Flexibility Act (5 U.S.C. 601
et seq.) do not apply.
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10037
List of Subjects in Part 1310
Air carriers, Disaster assistance, Loan
programs-transportation, Reporting and
recordkeeping requirements.
Dated: February 22, 2005.
Mark R. Dayton,
Executive Director, Air Transportation
Stabilization Board.
For the reasons set forth in the
preamble and under the authority of 49
U.S.C. 40101 note, the Air
Transportation Stabilization Board
amends subchapter B of 14 CFR Chapter
VI as follows:
I 1. The heading of Part 1310 is revised
to read as follows:
I
Subchapter B—Air Transportation
Stabilization Board
PART 1310—AIR CARRIER
GUARANTEE LOAN PROGRAM
ADMINISTRATIVE REGULATIONS AND
AMENDMENT OR WAIVER OF A TERM
OR CONDITION OF GUARANTEED
LOAN
2. The authority citation for part 1310
continues to read as follows:
I
Authority: Title I of Pub. L. 107–42, 115
Stat. 230 (49 U.S.C. 40101 note).
3. Section 1310.15 is added to read as
follows:
I
§ 1310.15 Amendment or Waiver of a term
or condition of a guaranteed loan.
The Board may, in its discretion,
charge the borrower a fee, in an amount
and payable as determined by the
Board, for each amendment to, or
waiver of, any term or condition of any
guaranteed loan document or related
instrument approved by the Board.
[FR Doc. 05–4005 Filed 2–25–05; 12:15 pm]
BILLING CODE 4810–25–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9186]
RIN 1545–BD42
Qualified Amended Returns
Internal Revenue Service (IRS),
Treasury.
ACTION: Temporary regulations.
AGENCY:
SUMMARY: This document contains
temporary regulations that modify the
rules relating to qualified amended
returns by providing additional
circumstances that end the period
within which a taxpayer may file an
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Federal Register / Vol. 70, No. 40 / Wednesday, March 2, 2005 / Rules and Regulations
amended return that constitutes a
qualified amended return. These
regulations provide that the period for
filing a qualified amended return is
terminated once the IRS has served a
John Doe summons on a third party
with respect to the taxpayer’s tax
liability. In addition, for taxpayers who
have claimed tax benefits from
undisclosed listed transactions, the
regulations provide that the period for
filing a qualified amended return is
terminated once the IRS contacts a
promoter, organizer, seller, or material
advisor concerning the listed
transaction. The regulations also
provide that the date on which
published guidance is issued
announcing a settlement initiative for a
listed transaction in which penalties are
compromised or waived is an additional
date by which a taxpayer must file a
qualified amended return. The text of
these temporary regulations also serves
as the text of the proposed regulations
set forth in the notice of proposed
rulemaking on this subject published
elsewhere in this issue of the Federal
Register.
DATES: Effective Date: These regulations
are effective March 2, 2005.
Applicability Dates: For dates of
applicability, see § 1.6664–1T(b)(3).
FOR FURTHER INFORMATION CONTACT:
Nancy M. Galib, 202–622–4940 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains temporary
regulations under 26 CFR part 1 relating
to qualified amended returns. Section
1.6664–2(c) provides that the amount
reported on a qualified amended return
will be treated as an amount shown as
tax on the taxpayer’s return for purposes
of determining whether there is an
underpayment of tax subject to an
accuracy-related penalty. Section
1.6664–2(c)(3) provides that an
amended return, or request for
administrative adjustment under section
6227 of the Internal Revenue Code, is a
qualified amended return if it is filed
before the earliest of: (1) The date on
which the IRS first contacts the taxpayer
concerning an examination of the
return; (2) the date on which the IRS
first contacts a person described in
section 6700(a) concerning the
examination of an activity described in
section 6700(a) with respect to which
the taxpayer claimed any tax benefit on
the return directly or indirectly through
the entity, plan or arrangement
described in section 6700(a)(1)(A); or (3)
for certain pass-through items, the date
on which the IRS first contacts the pass-
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through entity in connection with an
examination of the return to which the
pass-through item relates. These
provisions are intended to encourage
voluntary compliance by permitting
taxpayers to avoid accuracy-related
penalties by filing an amended return
before the IRS begins an investigation of
the taxpayer or the promoter of a
transaction in which the taxpayer
participated.
The Treasury Department and the IRS
have determined that additional rules
providing for the termination of the
period for filing a qualified amended
return are necessary because existing
rules may encourage taxpayers to delay
filing amended returns until after the
IRS has taken steps to identify taxpayers
as participants in potentially abusive
transactions. To discourage the waitand-see approach of some taxpayers and
to encourage voluntary compliance, the
Treasury Department and the IRS
announced in Notice 2004–38, 2004–24
I.R.B. 949, that regulations modifying
the definition of qualified amended
return in § 1.6664–2(c)(3) would be
issued. Notice 2004–38 announced that
the regulations would provide that the
period for filing a qualified amended
return is terminated when the IRS
serves a John Doe summons under
section 7609(f) with respect to the
taxpayer’s tax liability. Notice 2004–38
also announced that the regulations
would provide that the period for filing
a qualified amended return would
terminate when the IRS contacts an
organizer, seller, or material advisor
concerning a listed transaction for
which the taxpayer has claimed a tax
benefit. Notice 2004–38 provided that
the regulations would be effective for
amended returns or requests for
administrative adjustment filed on or
after April 30, 2004.
Explanation of Provisions
These regulations provide the rules
announced in Notice 2004–38 that
identify additional circumstances that
terminate the period within which a
taxpayer may file a qualified amended
return. Temporary regulation § 1.6664–
2T(c)(3)(i) provides that a qualified
amended return must be filed before the
IRS serves on a third party a John Doe
summons relating to the tax liability of
a person, group, or class that includes
the taxpayer or pass-through entity of
which the taxpayer is a partner,
shareholder, beneficiary, or holder of a
residual interest in a REMIC with
respect to a return that reflects the
activity that is the subject of the
summons. Any taxpayer so identified
also is precluded from filing a qualified
amended return in a year not identified
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in the summons if the original return for
that year reflected the taxpayer’s
participation in the transaction or
activity to which the summons relates.
Temporary regulation § 1.6664–
2T(c)(3)(ii) provides special rules with
respect to undisclosed listed
transactions. An undisclosed listed
transaction is a transaction that: (1) is
the same or substantially similar to a
listed transaction as defined in
§ 1.6011–4(b)(2) (regardless of whether
§ 1.6011–4 requires the taxpayer to
disclose the transaction); and (2) was
not previously disclosed by the taxpayer
within the meaning of § 1.6011–4 or
§ 1.6011–4T, or had not been disclosed
under Announcement 2002–2 by the
deadline therein. In the case of an
undisclosed listed transaction for which
a taxpayer claims any direct or indirect
tax benefits on its return, a taxpayer
may not file a qualified amended return
on or after the earlier of: (1) The date on
which the IRS first contacts any person
regarding an examination of that
person’s liability under section 6707(a)
with respect to the undisclosed listed
transaction of the taxpayer; or (2) the
date on which the IRS issues to any
person a request for information
required to be included on a list under
section 6112 relating to a type of listed
transaction regarding which that person
made a tax statement to or for the
benefit of the taxpayer (regardless of
whether the taxpayer’s information is
required to be included on the list
requested by the IRS). For purposes of
this section, an examination of a
person’s liability under section 6707(a)
includes examinations under section
6707, in effect prior to and after the
amendments made by section 816 of the
American Jobs Creation Act of 2004,
Pub. L. 108–357 (118 Stat. 1418).
An amended return that is filed to
disclose a transaction, but that does not
show an additional amount due, is
treated as a qualified amended return
for purposes of § 1.6662–3(c) or
§ 1.6662–4(e) and (f). These temporary
regulations also provide that a qualified
amended return includes an amended
return filed solely to disclose
information pursuant to § 1.6011–4,
provided that the taxpayer also makes
the required disclosure to the Office of
Tax Shelter Analysis.
In addition to these rules, temporary
regulation § 1.6664–2T(c)(3)(i) also
provides that the date on which
published guidance is issued providing
for a settlement initiative for a listed
transaction is an additional date by
which a taxpayer who participated in
the listed transaction must file a
qualified amended return for the taxable
years in which the taxpayer claimed any
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Federal Register / Vol. 70, No. 40 / Wednesday, March 2, 2005 / Rules and Regulations
direct or indirect tax benefits from the
listed transaction. The Commissioner
may waive the requirements of this
provision or identify a later date by
which a taxpayer who participated in
the listed transaction must file a
qualified amended return in the
published guidance announcing the
listed transaction settlement initiative.
These temporary regulations also
clarify the existing rules applicable to
qualified amended returns. Temporary
regulation § 1.6664–2T(c)(3)(i)(B)
clarifies that the period for filing a
qualified amended return terminates on
the date the IRS first contacts a person
concerning an examination under
section 6700, regardless of whether the
IRS ultimately establishes that such
person violated section 6700.
Temporary regulation § 1.6664–
2T(c)(3)(i) also clarifies that a taxpayer
must file a qualified amended return
before the IRS first contacts the taxpayer
concerning a criminal investigation of
the taxpayer that includes the tax period
covered by the return.
Effective Date
Paragraphs (c)(1), (c)(2), (c)(3)(i)(A),
(c)(3)(i)(B), (c)(3)(i)(C), (c)(3)(i)(D)
(second sentence), (c)(3)(i)(E), and (c)(4)
of § 1.6664–2T are applicable for
amended returns and requests for
administrative adjustment filed on or
after March 2, 2005. Paragraphs
(c)(3)(i)(D) (first sentence) and (c)(3)(ii)
of § 1.6664–2T are applicable for
amended returns and requests for
administrative adjustment filed on or
after April 30, 2004.
Effect on Other Documents
Notice 2004–38 (2004–24 I.R.B. 949)
is obsolete as of March 2, 2005.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in
Executive Order 12866. Therefore, a
regulatory assessment is not required. It
has also been determined that section
553(b) of the Administrative Procedure
Act (5 U.S.C. chapter 5) does not apply
to these regulations, and because the
regulation does not impose a collection
of information on small entities, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to
section 7805(f), this Treasury decision
will be submitted to the Chief Counsel
for Advocacy of the Small Business
Administration for comment on its
impact on small business.
Drafting Information
The principal author of this regulation
is Nancy M. Galib, Office of Associate
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Chief Counsel (Procedure &
Administration), Administrative
Provisions and Judicial Practice
Division.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
I
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as
follows:
I
Authority: 26 U.S.C. 7805 * * *
I Par. 2. Section 1.6664–1T is added to
read as follows:
§ 1.6664–1T Accuracy-related and fraud
penalties; definitions and special rules
(temporary).
(a) through (b)(2) [Reserved]. For
further guidance, see § 1.6664–1.
(b)(3) Qualified amended returns.
Sections 1.6664–2T(c)(1), (c)(2),
(c)(3)(i)(A), (c)(3)(i)(B), (c)(3)(i)(C),
(c)(3)(i)(D) (second sentence),
(c)(3)(i)(E), and (c)(4) are applicable for
amended returns and requests for
administrative adjustment filed on or
after March 2, 2005. Sections 1.6664–
2T(c)(3)(i)(D) (first sentence) and
(c)(3)(ii) are applicable for amended
returns and requests for administrative
adjustment filed on or after April 30,
2004.
I Par. 3. Section 1.6664–2 is revised to
read as follows:
§ 1.6664–2
Underpayment.
*
*
*
*
*
(c) [Reserved]. For further guidance,
see § 1.6664–2T.
*
*
*
*
*
I Par. 4. Section 1.6664–2T is added to
read as follows:
§ 1.6664–2T
Underpayment (temporary).
(a) through (b) [Reserved]. For further
guidance, see § 1.6664–2.
(c) Amount shown as the tax by the
taxpayer on his return—(1) Defined. For
purposes of paragraph (a) of this section,
the ‘‘amount shown as the tax by the
taxpayer on his return’’ is the tax
liability shown by the taxpayer on his
return, determined without regard to the
items listed in § 1.6664–2(b) (1), (2), and
(3), except that it is reduced by the
excess of—
(i) The amounts shown by the
taxpayer on his return as credits for tax
withheld under section 31 (relating to
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10039
tax withheld on wages) and section 33
(relating to tax withheld at source on
nonresident aliens and foreign
corporations), as payments of estimated
tax, or as any other payments made by
the taxpayer with respect to a taxable
year before filing the return for such
taxable year; over
(ii) The amounts actually withheld,
actually paid as estimated tax, or
actually paid with respect to a taxable
year before the return is filed for such
taxable year.
(2) Effect of qualified amended return.
The ‘‘amount shown as the tax by the
taxpayer on his return’’ includes an
amount shown as additional tax on a
qualified amended return (as defined in
paragraph (c)(3) of this section), except
that such amount is not included if it
relates to a fraudulent position on the
original return.
(3) Qualified amended return defined.
(i) General rule. A qualified amended
return is an amended return, or a timely
request for an administrative adjustment
under section 6227, filed after the due
date of the return for the taxable year
(determined with regard to extensions of
time to file) and before the earliest of—
(A) The date the taxpayer is first
contacted by the Internal Revenue
Service concerning any examination
(including a criminal investigation) with
respect to the return;
(B) The date any person is first
contacted by the Internal Revenue
Service concerning an examination of
that person under section 6700 (relating
to the penalty for promoting abusive tax
shelters) of an activity with respect to
which the taxpayer claimed any tax
benefit on the return directly or
indirectly through the entity, plan or
arrangement described in section
6700(a)(1)(A);
(C) In the case of a pass-through item
(as defined in § 1.6662–4(f)(5)), the date
the pass-through entity (as defined in
§ 1.6662–4(f)(5)) is first contacted by the
Internal Revenue Service in connection
with an examination of the return to
which the pass-through item relates;
(D) The date on which the Internal
Revenue Service serves a summons
described in section 7609(f) relating to
the tax liability of a person, group, or
class that includes the taxpayer (or passthrough entity of which the taxpayer is
a partner, shareholder, beneficiary, or
holder of a residual interest in a REMIC)
with respect to an activity for which the
taxpayer claimed any tax benefit on the
return directly or indirectly. This rule
applies to any return on which the
taxpayer claimed a direct or indirect tax
benefit from the type of activity that is
the subject of the summons, regardless
of whether the summons seeks the
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production of information for the
taxable period covered by such return;
and
(E) The date on which the
Commissioner announces by revenue
ruling, revenue procedure, notice, or
announcement, to be published in the
Internal Revenue Bulletin (see
§ 601.601(d)(2)), a settlement initiative
to compromise or waive penalties with
respect to a listed transaction. This rule
applies only to a taxpayer who
participated in the listed transaction
and for the taxable year(s) in which the
taxpayer claimed any direct or indirect
tax benefits from the listed transaction.
The Commissioner may waive the
requirements of this paragraph or
identify a later date by which a taxpayer
who participated in the listed
transaction must file a qualified
amended return in the published
guidance announcing the listed
transaction settlement initiative.
(ii) Undisclosed listed transactions.
An undisclosed listed transaction is a
transaction that is the same as, or
substantially similar to, a listed
transaction within the meaning of
§ 1.6011–4(b)(2) (regardless of whether
§ 1.6011–4 requires the taxpayer to
disclose the transaction) and was not
previously disclosed by the taxpayer
within the meaning of § 1.6011–4 or
§ 1.6011–4T, or had not been disclosed
under Announcement 2002–2, 2002–1
C.B. 304, by the deadline therein. In the
case of an undisclosed listed transaction
for which a taxpayer claims any direct
or indirect tax benefits on its return
(regardless of whether the transaction
was a listed transaction at the time the
return was filed), an amended return or
request for administrative adjustment
under section 6227 will not be a
qualified amended return if filed on or
after the earliest of—
(A) The dates described in § 1.6664–
2(c)(3)(i);
(B) The date on which the Internal
Revenue Service first contacts any
person regarding an examination of that
person’s liability under section 6707(a)
with respect to the undisclosed listed
transaction of the taxpayer; or
(C) The date on which the Internal
Revenue Service requests, from any
person who made a tax statement to or
for the benefit of the taxpayer, or who
is a material advisor (within the
meaning of section 6111) with respect to
the taxpayer, the information required
to be included on a list under section
6112 relating to a transaction that is the
same as, or substantially similar to, the
undisclosed listed transaction,
regardless of whether the taxpayer’s
information is required to be included
on that list.
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(4) Special rules. (i) A qualified
amended return includes an amended
return that is filed to disclose
information pursuant to § 1.6662–3(c) or
§ 1.6662–4 (e) and (f) and that does not
report any additional tax liability. A
qualified amended return also includes
an amended return filed solely to
disclose information pursuant to
§ 1.6011–4, if the taxpayer also makes
the required disclosure to the Office of
Tax Shelter Analysis under § 1.6011–
4(e). See § 1.6662–3(c), § 1.6662–4(f),
and § 1.6664–4(c) for rules relating to
adequate disclosure.
(ii) The Commissioner may by
revenue procedure prescribe the manner
in which the rules of paragraph (c) of
this section regarding qualified
amended returns apply to particular
classes of taxpayers.
(5) Examples. The following examples
illustrate the provisions of paragraphs
(c)(3) and (c)(4) of this section:
Example 1. T, an individual taxpayer,
claimed tax benefits on its 2002 Federal
income tax return from a transaction that is
substantially similar to the transaction
identified as a listed transaction in Notice
2002–65, 2002–2 C.B. 690 (Partnership Entity
Straddle Tax Shelter). T did not disclose his
participation in this transaction on a Form
8886, Reportable Transaction Disclosure
Statement, as required by § 1.6011–4. On
June 30, 2004, the IRS requested from P, T’s
material advisor, an investor list required to
be maintained under section 6112. The
section 6112 request, however, related to the
type of transaction described in Notice 2003–
81, 2003–2 C.B. 1223 (Tax Avoidance Using
Offsetting Foreign Currency Option
Contracts). T did not participate in (within
the meaning of § 1.6011–4(c)), and claimed
no tax benefits from, a transaction described
in Notice 2003–81. T may file a qualified
amended return relating to the transaction
described in Notice 2002–65 because T did
not claim a tax benefit with respect to the
listed transaction that is the subject of the
section 6112 request.
Example 2. The facts are the same as in
Example 1, except that T’s 2002 Federal
income tax return reflected T’s participation
in the transaction described in Notice 2003–
81. As of June 30, 2004, T may not file a
qualified amended return for the 2002 tax
year.
Example 3. Corporation X claimed tax
benefits from a transaction on its 2002
Federal income tax return. In October 2003,
the IRS and Treasury identified the
transaction as a listed transaction. In
December 2003, the IRS contacted P
concerning an examination of P’s liability
under section 6707(a) (as in effect prior to the
amendment to section 6707 by section 816 of
the American Jobs Creation Act of 2004, P.L.
108–357, 118 Stat. 1418). P is the organizer
of a section 6111 tax shelter who provided
representations to X regarding tax benefits
from the transaction, and the IRS has
contacted P about the failure to register that
transaction. Three days later, X filed an
amended return.
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X’s amended return is not a qualified
amended return, because X did not disclose
the transaction before the IRS contacted P.
X’s amended return would have been a
qualified amended return if it was submitted
prior to the date on which the IRS contacted
P.
Example 4. The facts are the same as in
Example 3 except that, instead of contacting
P concerning an examination under section
6707(a), in December 2003, the IRS served P
a summons described in section 7609(f). X
cannot file a qualified amended return after
the summons has been served regardless of
when, or whether, the transaction becomes a
listed transaction.
Example 5. On November 30, 2003, the
Internal Revenue Service served Corporation
Y, a credit card company, a summons
described in section 7609(f). The summons
requested the identity of, and information
concerning, United States taxpayers who,
during the taxable years 2001 and 2002, had
signature authority over Corporation Y’s
credit cards issued by, through, or on behalf
of certain offshore financial institutions. In
obtaining court approval for the summons,
the IRS provided reports and declarations
that established a reasonable basis for
believing that this ascertainable group of
taxpayers may have been using these offshore
credit card accounts to avoid complying with
the internal revenue laws of the United
States. Corporation Y complied with the
summons, and identified, among others,
Taxpayer B. On May 31, 2004, before the IRS
first contacted Taxpayer B concerning an
examination of Taxpayer B’s federal income
tax return for the taxable year 2002, Taxpayer
B filed an amended return for that taxable
year, that showed an increase in Taxpayer B’s
federal income tax liability. Under paragraph
(c)(3)(i)(D) of this section, the amended
return is not a qualified amended return
because it was not filed before the summons
was served on Corporation Y.
Example 6. The facts are the same as in
Example 5. Taxpayer B continued to
maintain the offshore credit card account
through 2003 to avoid compliance with the
internal revenue laws. On March 21, 2005,
Taxpayer B filed an amended return for the
taxable year 2003, that showed an increase in
Taxpayer B’s federal income tax liability.
Under paragraph (c)(3)(i)(D) of this section,
the amended return is not a qualified
amended return because it was not filed
before the summons for 2001 and 2002 was
served on Corporation Y, and the return
reflects an activity that is the subject of the
same summons.
Example 7. On November 30, 2003, the
Internal Revenue Service served Corporation
Y, a credit card company, a summons
described in section 7609(f). The summons
requested the identity of, and information
concerning, United States taxpayers who,
during the taxable years 2001 and 2002, had
signature authority over Corporation Y’s
credit cards issued by, through, or on behalf
of certain offshore financial institutions. In
obtaining court approval for the summons,
the IRS established a reasonable basis for
believing that this ascertainable group of
taxpayers may have been using these offshore
credit card accounts to avoid complying with
E:\FR\FM\02MRR1.SGM
02MRR1
Federal Register / Vol. 70, No. 40 / Wednesday, March 2, 2005 / Rules and Regulations
the internal revenue laws of the United
States. Taxpayer C did not have signature
authority over any of Corporation Y’s credit
cards during either 2001 or 2002 and,
therefore, was not a person described in the
summons.
In 2003, Taxpayer C first acquired
signature authority over a Corporation Y
credit card issued by an offshore financial
institution. Taxpayer C’s ability to file a
qualified amended return for 2003 is not
limited by paragraph (c)(3)(i)(D) because
Taxpayer C’s return does not reflect an
activity that was the subject of the summons
that was served on Corporation Y for 2001
and 2002.
Example 8. On April 15, 2004, Taxpayer D
timely filed his 2003 federal income tax
return. The return reported tax benefits from
a transaction that had previously been
identified as a listed transaction. The tax
treatment of the transaction also reflected a
position that was contrary to a revenue
ruling. D did not include with his return a
Form 8275, Disclosure Statement, as required
by § 1.6662–3(c), or a Form 8886, Reportable
Transaction Disclosure Statement, as
required by § 1.6011–4. On March 21, 2005,
D filed a qualified amended return that
disclosed the listed transaction on an
attached Form 8886, but that did not report
any additional tax. D also filed the Form
8886 with the Office of Tax Shelter Analysis
as required by § 1.6011–4. D has not
adequately disclosed the transaction under
§ 1.6662–3(c) because D failed to file a Form
8275. (d) through (g) [Reserved]. For further
guidance, see § 1.6664–2.
Mark E. Matthews,
Deputy Commissioner for Services and
Enforcement.
Approved: February 23, 2005.
Eric Solomon,
Acting Assistant Secretary of the Treasury.
[FR Doc. 05–3950 Filed 3–1–05; 8:45 am]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 228
10041
DATES: Effective Date: This final site
designation and de-designation becomes
effective on April 1, 2005.
The administrative record
for this final action is available for
inspection at the Region 10 Library,
10th Floor, 1200 Sixth Avenue, Seattle,
Washington 98101. For access to the
administrative record, contact the
Region 10 Library Reference Desk at
(206) 553–1289, between 9 a.m. and 4
p.m., Monday through Friday, excluding
legal holidays, for an appointment. The
EPA public information regulations (40
CFR part 2) provide that a reasonable fee
may be charged for copying.
ADDRESSES:
[FRL–7877–9]
Ocean Dumping; De-designation of
Ocean Dredged Material Disposal Sites
and Designation of New Sites
Environmental Protection
Agency.
ACTION: Final rule.
AGENCY:
SUMMARY: The Environmental Protection
Agency (EPA) is finalizing its proposal
to de-designate four existing ocean
dredged material disposal sites located
off of the mouth of the Columbia River
near the states of Oregon and
Washington and to designate two new
sites, the Shallow Water site (SWS) and
the Deep Water site (DWS). The new
sites are needed for long-term use by
authorized Columbia River navigation
projects and may be available for use by
others meeting the criteria for ocean
disposal of dredged material. EPA
published its proposal to designate the
two new ocean disposal sites and to dedesignate the four existing ocean
disposal sites in the Federal Register on
March 11, 2003 (68 FR 11488). The dedesignation of existing sites is necessary
to discontinue their use where the
impact of disposal has resulted in
changed and adverse site conditions.
The newly designated sites are
necessary for current and future dredged
material ocean disposal needs and will
be subject to ongoing monitoring and
management to ensure continued
protection of the marine environment
from adverse effects to the greatest
extent practicable.
John
Malek, Ocean Dumping Coordinator,
U.S. Environmental Protection Agency,
Region 10 (ETPA–083), 1200 Sixth
Avenue, Seattle, WA 98101–1128,
telephone (206) 553–1286, e-mail:
malek.john@epa.gov.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
1. Regulated Entities
Entities potentially affected by this
action include those who seek or might
seek permits or approval by EPA to
dispose of dredged material into ocean
waters pursuant to the Marine
Protection, Research, and Sanctuaries
Act, as amended, 33 U.S.C. 1401 to
1445, (MPRSA). The action would be
relevant to entities, including the U.S.
Army Corps of Engineers (Corps),
seeking to dispose of dredged materials
in ocean waters off the mouth of the
Columbia River near the states of
Oregon and Washington. Potentially
affected categories and entities include:
Category
Examples of potentially regulated entities
Federal Government ..............................................
U.S. Army Corps of Engineers Civil Works Projects, Regulatory Program, Other Federal
Agencies.
Port Authorities, Marinas and Harbors, Shipyards and Marine Repair Facilities, Berth Owners.
Governments owning and/or responsible for ports, harbors, and/or berths, Government
agencies requiring disposal of dredged material associated with public works projects.
Industry and General Public ...................................
State, local and tribal governments .......................
This table is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
affected by this action. For any
questions regarding the applicability of
this action to a particular entity, please
consult the person listed in the section
of this action titled FOR FURTHER
INFORMATION CONTACT.
2. Background
The EPA published a proposal in the
Federal Register on March 11, 2003, (68
FR 11488), to de-designate four ocean
VerDate jul<14>2003
14:59 Mar 01, 2005
Jkt 205001
dredged material disposal sites and to
designate two new ocean dredged
material disposal sites under Section
102(c) of the MPRSA and its
implementing regulations at 40 CFR
subchapter H. Under the MPRSA, the
Administrator of EPA has the authority,
which is delegated to the Regional
Administrator of the Region in which
the sites are located, to designate sites
where ocean disposal may be permitted.
The sites that are designated in today’s
action and the sites that are de-
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
designated in today’s action are located
near the mouth of the Columbia River,
within Region 10. Figure 1 displays the
de-designated sites. Figure 2 displays
the newly designated sites. [Figures 1
and 2 are attached at the end of this
document.]
The proposed designations and dedesignations were accompanied by a
joint EPA and Corps ‘‘Integrated
Feasibility Report and Environmental
Impact Statement for Channel
Improvements,’’ August 1999 (1999 IFR/
E:\FR\FM\02MRR1.SGM
02MRR1
]]>Agencies
[Federal Register Volume 70, Number 40 (Wednesday, March 2, 2005)]
[Rules and Regulations]
[Pages 10037-10041]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-3950]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9186]
RIN 1545-BD42
Qualified Amended Returns
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains temporary regulations that modify the
rules relating to qualified amended returns by providing additional
circumstances that end the period within which a taxpayer may file an
[[Page 10038]]
amended return that constitutes a qualified amended return. These
regulations provide that the period for filing a qualified amended
return is terminated once the IRS has served a John Doe summons on a
third party with respect to the taxpayer's tax liability. In addition,
for taxpayers who have claimed tax benefits from undisclosed listed
transactions, the regulations provide that the period for filing a
qualified amended return is terminated once the IRS contacts a
promoter, organizer, seller, or material advisor concerning the listed
transaction. The regulations also provide that the date on which
published guidance is issued announcing a settlement initiative for a
listed transaction in which penalties are compromised or waived is an
additional date by which a taxpayer must file a qualified amended
return. The text of these temporary regulations also serves as the text
of the proposed regulations set forth in the notice of proposed
rulemaking on this subject published elsewhere in this issue of the
Federal Register.
DATES: Effective Date: These regulations are effective March 2, 2005.
Applicability Dates: For dates of applicability, see Sec. 1.6664-
1T(b)(3).
FOR FURTHER INFORMATION CONTACT: Nancy M. Galib, 202-622-4940 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains temporary regulations under 26 CFR part 1
relating to qualified amended returns. Section 1.6664-2(c) provides
that the amount reported on a qualified amended return will be treated
as an amount shown as tax on the taxpayer's return for purposes of
determining whether there is an underpayment of tax subject to an
accuracy-related penalty. Section 1.6664-2(c)(3) provides that an
amended return, or request for administrative adjustment under section
6227 of the Internal Revenue Code, is a qualified amended return if it
is filed before the earliest of: (1) The date on which the IRS first
contacts the taxpayer concerning an examination of the return; (2) the
date on which the IRS first contacts a person described in section
6700(a) concerning the examination of an activity described in section
6700(a) with respect to which the taxpayer claimed any tax benefit on
the return directly or indirectly through the entity, plan or
arrangement described in section 6700(a)(1)(A); or (3) for certain
pass-through items, the date on which the IRS first contacts the pass-
through entity in connection with an examination of the return to which
the pass-through item relates. These provisions are intended to
encourage voluntary compliance by permitting taxpayers to avoid
accuracy-related penalties by filing an amended return before the IRS
begins an investigation of the taxpayer or the promoter of a
transaction in which the taxpayer participated.
The Treasury Department and the IRS have determined that additional
rules providing for the termination of the period for filing a
qualified amended return are necessary because existing rules may
encourage taxpayers to delay filing amended returns until after the IRS
has taken steps to identify taxpayers as participants in potentially
abusive transactions. To discourage the wait-and-see approach of some
taxpayers and to encourage voluntary compliance, the Treasury
Department and the IRS announced in Notice 2004-38, 2004-24 I.R.B. 949,
that regulations modifying the definition of qualified amended return
in Sec. 1.6664-2(c)(3) would be issued. Notice 2004-38 announced that
the regulations would provide that the period for filing a qualified
amended return is terminated when the IRS serves a John Doe summons
under section 7609(f) with respect to the taxpayer's tax liability.
Notice 2004-38 also announced that the regulations would provide that
the period for filing a qualified amended return would terminate when
the IRS contacts an organizer, seller, or material advisor concerning a
listed transaction for which the taxpayer has claimed a tax benefit.
Notice 2004-38 provided that the regulations would be effective for
amended returns or requests for administrative adjustment filed on or
after April 30, 2004.
Explanation of Provisions
These regulations provide the rules announced in Notice 2004-38
that identify additional circumstances that terminate the period within
which a taxpayer may file a qualified amended return. Temporary
regulation Sec. 1.6664-2T(c)(3)(i) provides that a qualified amended
return must be filed before the IRS serves on a third party a John Doe
summons relating to the tax liability of a person, group, or class that
includes the taxpayer or pass-through entity of which the taxpayer is a
partner, shareholder, beneficiary, or holder of a residual interest in
a REMIC with respect to a return that reflects the activity that is the
subject of the summons. Any taxpayer so identified also is precluded
from filing a qualified amended return in a year not identified in the
summons if the original return for that year reflected the taxpayer's
participation in the transaction or activity to which the summons
relates.
Temporary regulation Sec. 1.6664-2T(c)(3)(ii) provides special
rules with respect to undisclosed listed transactions. An undisclosed
listed transaction is a transaction that: (1) is the same or
substantially similar to a listed transaction as defined in Sec.
1.6011-4(b)(2) (regardless of whether Sec. 1.6011-4 requires the
taxpayer to disclose the transaction); and (2) was not previously
disclosed by the taxpayer within the meaning of Sec. 1.6011-4 or Sec.
1.6011-4T, or had not been disclosed under Announcement 2002-2 by the
deadline therein. In the case of an undisclosed listed transaction for
which a taxpayer claims any direct or indirect tax benefits on its
return, a taxpayer may not file a qualified amended return on or after
the earlier of: (1) The date on which the IRS first contacts any person
regarding an examination of that person's liability under section
6707(a) with respect to the undisclosed listed transaction of the
taxpayer; or (2) the date on which the IRS issues to any person a
request for information required to be included on a list under section
6112 relating to a type of listed transaction regarding which that
person made a tax statement to or for the benefit of the taxpayer
(regardless of whether the taxpayer's information is required to be
included on the list requested by the IRS). For purposes of this
section, an examination of a person's liability under section 6707(a)
includes examinations under section 6707, in effect prior to and after
the amendments made by section 816 of the American Jobs Creation Act of
2004, Pub. L. 108-357 (118 Stat. 1418).
An amended return that is filed to disclose a transaction, but that
does not show an additional amount due, is treated as a qualified
amended return for purposes of Sec. 1.6662-3(c) or Sec. 1.6662-4(e)
and (f). These temporary regulations also provide that a qualified
amended return includes an amended return filed solely to disclose
information pursuant to Sec. 1.6011-4, provided that the taxpayer also
makes the required disclosure to the Office of Tax Shelter Analysis.
In addition to these rules, temporary regulation Sec. 1.6664-
2T(c)(3)(i) also provides that the date on which published guidance is
issued providing for a settlement initiative for a listed transaction
is an additional date by which a taxpayer who participated in the
listed transaction must file a qualified amended return for the taxable
years in which the taxpayer claimed any
[[Page 10039]]
direct or indirect tax benefits from the listed transaction. The
Commissioner may waive the requirements of this provision or identify a
later date by which a taxpayer who participated in the listed
transaction must file a qualified amended return in the published
guidance announcing the listed transaction settlement initiative.
These temporary regulations also clarify the existing rules
applicable to qualified amended returns. Temporary regulation Sec.
1.6664-2T(c)(3)(i)(B) clarifies that the period for filing a qualified
amended return terminates on the date the IRS first contacts a person
concerning an examination under section 6700, regardless of whether the
IRS ultimately establishes that such person violated section 6700.
Temporary regulation Sec. 1.6664-2T(c)(3)(i) also clarifies that a
taxpayer must file a qualified amended return before the IRS first
contacts the taxpayer concerning a criminal investigation of the
taxpayer that includes the tax period covered by the return.
Effective Date
Paragraphs (c)(1), (c)(2), (c)(3)(i)(A), (c)(3)(i)(B),
(c)(3)(i)(C), (c)(3)(i)(D) (second sentence), (c)(3)(i)(E), and (c)(4)
of Sec. 1.6664-2T are applicable for amended returns and requests for
administrative adjustment filed on or after March 2, 2005. Paragraphs
(c)(3)(i)(D) (first sentence) and (c)(3)(ii) of Sec. 1.6664-2T are
applicable for amended returns and requests for administrative
adjustment filed on or after April 30, 2004.
Effect on Other Documents
Notice 2004-38 (2004-24 I.R.B. 949) is obsolete as of March 2,
2005.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It has also been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations, and because the
regulation does not impose a collection of information on small
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f), this Treasury decision will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Drafting Information
The principal author of this regulation is Nancy M. Galib, Office
of Associate Chief Counsel (Procedure & Administration), Administrative
Provisions and Judicial Practice Division.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.6664-1T is added to read as follows:
Sec. 1.6664-1T Accuracy-related and fraud penalties; definitions and
special rules (temporary).
(a) through (b)(2) [Reserved]. For further guidance, see Sec.
1.6664-1.
(b)(3) Qualified amended returns. Sections 1.6664-2T(c)(1), (c)(2),
(c)(3)(i)(A), (c)(3)(i)(B), (c)(3)(i)(C), (c)(3)(i)(D) (second
sentence), (c)(3)(i)(E), and (c)(4) are applicable for amended returns
and requests for administrative adjustment filed on or after March 2,
2005. Sections 1.6664-2T(c)(3)(i)(D) (first sentence) and (c)(3)(ii)
are applicable for amended returns and requests for administrative
adjustment filed on or after April 30, 2004.
0
Par. 3. Section 1.6664-2 is revised to read as follows:
Sec. 1.6664-2 Underpayment.
* * * * *
(c) [Reserved]. For further guidance, see Sec. 1.6664-2T.
* * * * *
0
Par. 4. Section 1.6664-2T is added to read as follows:
Sec. 1.6664-2T Underpayment (temporary).
(a) through (b) [Reserved]. For further guidance, see Sec. 1.6664-
2.
(c) Amount shown as the tax by the taxpayer on his return--(1)
Defined. For purposes of paragraph (a) of this section, the ``amount
shown as the tax by the taxpayer on his return'' is the tax liability
shown by the taxpayer on his return, determined without regard to the
items listed in Sec. 1.6664-2(b) (1), (2), and (3), except that it is
reduced by the excess of--
(i) The amounts shown by the taxpayer on his return as credits for
tax withheld under section 31 (relating to tax withheld on wages) and
section 33 (relating to tax withheld at source on nonresident aliens
and foreign corporations), as payments of estimated tax, or as any
other payments made by the taxpayer with respect to a taxable year
before filing the return for such taxable year; over
(ii) The amounts actually withheld, actually paid as estimated tax,
or actually paid with respect to a taxable year before the return is
filed for such taxable year.
(2) Effect of qualified amended return. The ``amount shown as the
tax by the taxpayer on his return'' includes an amount shown as
additional tax on a qualified amended return (as defined in paragraph
(c)(3) of this section), except that such amount is not included if it
relates to a fraudulent position on the original return.
(3) Qualified amended return defined. (i) General rule. A qualified
amended return is an amended return, or a timely request for an
administrative adjustment under section 6227, filed after the due date
of the return for the taxable year (determined with regard to
extensions of time to file) and before the earliest of--
(A) The date the taxpayer is first contacted by the Internal
Revenue Service concerning any examination (including a criminal
investigation) with respect to the return;
(B) The date any person is first contacted by the Internal Revenue
Service concerning an examination of that person under section 6700
(relating to the penalty for promoting abusive tax shelters) of an
activity with respect to which the taxpayer claimed any tax benefit on
the return directly or indirectly through the entity, plan or
arrangement described in section 6700(a)(1)(A);
(C) In the case of a pass-through item (as defined in Sec. 1.6662-
4(f)(5)), the date the pass-through entity (as defined in Sec. 1.6662-
4(f)(5)) is first contacted by the Internal Revenue Service in
connection with an examination of the return to which the pass-through
item relates;
(D) The date on which the Internal Revenue Service serves a summons
described in section 7609(f) relating to the tax liability of a person,
group, or class that includes the taxpayer (or pass-through entity of
which the taxpayer is a partner, shareholder, beneficiary, or holder of
a residual interest in a REMIC) with respect to an activity for which
the taxpayer claimed any tax benefit on the return directly or
indirectly. This rule applies to any return on which the taxpayer
claimed a direct or indirect tax benefit from the type of activity that
is the subject of the summons, regardless of whether the summons seeks
the
[[Page 10040]]
production of information for the taxable period covered by such
return; and
(E) The date on which the Commissioner announces by revenue ruling,
revenue procedure, notice, or announcement, to be published in the
Internal Revenue Bulletin (see Sec. 601.601(d)(2)), a settlement
initiative to compromise or waive penalties with respect to a listed
transaction. This rule applies only to a taxpayer who participated in
the listed transaction and for the taxable year(s) in which the
taxpayer claimed any direct or indirect tax benefits from the listed
transaction. The Commissioner may waive the requirements of this
paragraph or identify a later date by which a taxpayer who participated
in the listed transaction must file a qualified amended return in the
published guidance announcing the listed transaction settlement
initiative.
(ii) Undisclosed listed transactions. An undisclosed listed
transaction is a transaction that is the same as, or substantially
similar to, a listed transaction within the meaning of Sec. 1.6011-
4(b)(2) (regardless of whether Sec. 1.6011-4 requires the taxpayer to
disclose the transaction) and was not previously disclosed by the
taxpayer within the meaning of Sec. 1.6011-4 or Sec. 1.6011-4T, or
had not been disclosed under Announcement 2002-2, 2002-1 C.B. 304, by
the deadline therein. In the case of an undisclosed listed transaction
for which a taxpayer claims any direct or indirect tax benefits on its
return (regardless of whether the transaction was a listed transaction
at the time the return was filed), an amended return or request for
administrative adjustment under section 6227 will not be a qualified
amended return if filed on or after the earliest of--
(A) The dates described in Sec. 1.6664-2(c)(3)(i);
(B) The date on which the Internal Revenue Service first contacts
any person regarding an examination of that person's liability under
section 6707(a) with respect to the undisclosed listed transaction of
the taxpayer; or
(C) The date on which the Internal Revenue Service requests, from
any person who made a tax statement to or for the benefit of the
taxpayer, or who is a material advisor (within the meaning of section
6111) with respect to the taxpayer, the information required to be
included on a list under section 6112 relating to a transaction that is
the same as, or substantially similar to, the undisclosed listed
transaction, regardless of whether the taxpayer's information is
required to be included on that list.
(4) Special rules. (i) A qualified amended return includes an
amended return that is filed to disclose information pursuant to Sec.
1.6662-3(c) or Sec. 1.6662-4 (e) and (f) and that does not report any
additional tax liability. A qualified amended return also includes an
amended return filed solely to disclose information pursuant to Sec.
1.6011-4, if the taxpayer also makes the required disclosure to the
Office of Tax Shelter Analysis under Sec. 1.6011-4(e). See Sec.
1.6662-3(c), Sec. 1.6662-4(f), and Sec. 1.6664-4(c) for rules
relating to adequate disclosure.
(ii) The Commissioner may by revenue procedure prescribe the manner
in which the rules of paragraph (c) of this section regarding qualified
amended returns apply to particular classes of taxpayers.
(5) Examples. The following examples illustrate the provisions of
paragraphs (c)(3) and (c)(4) of this section:
Example 1. T, an individual taxpayer, claimed tax benefits on
its 2002 Federal income tax return from a transaction that is
substantially similar to the transaction identified as a listed
transaction in Notice 2002-65, 2002-2 C.B. 690 (Partnership Entity
Straddle Tax Shelter). T did not disclose his participation in this
transaction on a Form 8886, Reportable Transaction Disclosure
Statement, as required by Sec. 1.6011-4. On June 30, 2004, the IRS
requested from P, T's material advisor, an investor list required to
be maintained under section 6112. The section 6112 request, however,
related to the type of transaction described in Notice 2003-81,
2003-2 C.B. 1223 (Tax Avoidance Using Offsetting Foreign Currency
Option Contracts). T did not participate in (within the meaning of
Sec. 1.6011-4(c)), and claimed no tax benefits from, a transaction
described in Notice 2003-81. T may file a qualified amended return
relating to the transaction described in Notice 2002-65 because T
did not claim a tax benefit with respect to the listed transaction
that is the subject of the section 6112 request.
Example 2. The facts are the same as in Example 1, except that
T's 2002 Federal income tax return reflected T's participation in
the transaction described in Notice 2003-81. As of June 30, 2004, T
may not file a qualified amended return for the 2002 tax year.
Example 3. Corporation X claimed tax benefits from a transaction
on its 2002 Federal income tax return. In October 2003, the IRS and
Treasury identified the transaction as a listed transaction. In
December 2003, the IRS contacted P concerning an examination of P's
liability under section 6707(a) (as in effect prior to the amendment
to section 6707 by section 816 of the American Jobs Creation Act of
2004, P.L. 108-357, 118 Stat. 1418). P is the organizer of a section
6111 tax shelter who provided representations to X regarding tax
benefits from the transaction, and the IRS has contacted P about the
failure to register that transaction. Three days later, X filed an
amended return.
X's amended return is not a qualified amended return, because X
did not disclose the transaction before the IRS contacted P. X's
amended return would have been a qualified amended return if it was
submitted prior to the date on which the IRS contacted P.
Example 4. The facts are the same as in Example 3 except that,
instead of contacting P concerning an examination under section
6707(a), in December 2003, the IRS served P a summons described in
section 7609(f). X cannot file a qualified amended return after the
summons has been served regardless of when, or whether, the
transaction becomes a listed transaction.
Example 5. On November 30, 2003, the Internal Revenue Service
served Corporation Y, a credit card company, a summons described in
section 7609(f). The summons requested the identity of, and
information concerning, United States taxpayers who, during the
taxable years 2001 and 2002, had signature authority over
Corporation Y's credit cards issued by, through, or on behalf of
certain offshore financial institutions. In obtaining court approval
for the summons, the IRS provided reports and declarations that
established a reasonable basis for believing that this ascertainable
group of taxpayers may have been using these offshore credit card
accounts to avoid complying with the internal revenue laws of the
United States. Corporation Y complied with the summons, and
identified, among others, Taxpayer B. On May 31, 2004, before the
IRS first contacted Taxpayer B concerning an examination of Taxpayer
B's federal income tax return for the taxable year 2002, Taxpayer B
filed an amended return for that taxable year, that showed an
increase in Taxpayer B's federal income tax liability. Under
paragraph (c)(3)(i)(D) of this section, the amended return is not a
qualified amended return because it was not filed before the summons
was served on Corporation Y.
Example 6. The facts are the same as in Example 5. Taxpayer B
continued to maintain the offshore credit card account through 2003
to avoid compliance with the internal revenue laws. On March 21,
2005, Taxpayer B filed an amended return for the taxable year 2003,
that showed an increase in Taxpayer B's federal income tax
liability. Under paragraph (c)(3)(i)(D) of this section, the amended
return is not a qualified amended return because it was not filed
before the summons for 2001 and 2002 was served on Corporation Y,
and the return reflects an activity that is the subject of the same
summons.
Example 7. On November 30, 2003, the Internal Revenue Service
served Corporation Y, a credit card company, a summons described in
section 7609(f). The summons requested the identity of, and
information concerning, United States taxpayers who, during the
taxable years 2001 and 2002, had signature authority over
Corporation Y's credit cards issued by, through, or on behalf of
certain offshore financial institutions. In obtaining court approval
for the summons, the IRS established a reasonable basis for
believing that this ascertainable group of taxpayers may have been
using these offshore credit card accounts to avoid complying with
[[Page 10041]]
the internal revenue laws of the United States. Taxpayer C did not
have signature authority over any of Corporation Y's credit cards
during either 2001 or 2002 and, therefore, was not a person
described in the summons.
In 2003, Taxpayer C first acquired signature authority over a
Corporation Y credit card issued by an offshore financial
institution. Taxpayer C's ability to file a qualified amended return
for 2003 is not limited by paragraph (c)(3)(i)(D) because Taxpayer
C's return does not reflect an activity that was the subject of the
summons that was served on Corporation Y for 2001 and 2002.
Example 8. On April 15, 2004, Taxpayer D timely filed his 2003
federal income tax return. The return reported tax benefits from a
transaction that had previously been identified as a listed
transaction. The tax treatment of the transaction also reflected a
position that was contrary to a revenue ruling. D did not include
with his return a Form 8275, Disclosure Statement, as required by
Sec. 1.6662-3(c), or a Form 8886, Reportable Transaction Disclosure
Statement, as required by Sec. 1.6011-4. On March 21, 2005, D filed
a qualified amended return that disclosed the listed transaction on
an attached Form 8886, but that did not report any additional tax. D
also filed the Form 8886 with the Office of Tax Shelter Analysis as
required by Sec. 1.6011-4. D has not adequately disclosed the
transaction under Sec. 1.6662-3(c) because D failed to file a Form
8275. (d) through (g) [Reserved]. For further guidance, see Sec.
1.6664-2.
Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
Approved: February 23, 2005.
Eric Solomon,
Acting Assistant Secretary of the Treasury.
[FR Doc. 05-3950 Filed 3-1-05; 8:45 am]
BILLING CODE 4830-01-P
