AJCA Modifications to the Section 6011, 6111, and 6112 Regulations, 64458-64460 [E6-18317]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 71, Number 212 (Thursday, November 2, 2006)]
[Rules and Regulations]
[Pages 64458-64460]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18317]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

[TD 9295]
RIN 1545-BF98


AJCA Modifications to the Section 6011, 6111, and 6112 
Regulations

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final and temporary regulations.

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SUMMARY: This document contains temporary and final regulations under 
sections 6011, 6111, and 6112 of the Internal Revenue Code that modify 
the rules relating to the disclosure of reportable transactions and the 
list maintenance requirements. These regulations affect taxpayers

[[Page 64459]]

participating in reportable transactions under section 6011, material 
advisors responsible for disclosing reportable transactions under 
section 6111, and material advisors responsible for keeping lists under 
section 6112. These temporary and final regulations are being issued 
concurrently with proposed regulations under sections 6011, 6111, and 
6112 published elsewhere in the Federal Register.

DATES: Effective Date: These regulations are effective November 1, 
2006.

FOR FURTHER INFORMATION CONTACT: Tara P. Volungis or Charles Wien, 202-
622-3070 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    This document amends 26 CFR parts 1 and 301 by modifying the rules 
relating to the disclosure of reportable transactions under sections 
6011 and 6111 and the list maintenance rules under section 6112. On 
February 28, 2003, the IRS issued final regulations under sections 
6011, 6111, and 6112 (TD 9046) (the February 2003 regulations). The 
February 2003 regulations were published in the Federal Register (68 FR 
10161) on March 4, 2003. On December 29, 2003, the IRS issued final 
regulations under section 6011 and 6112 (TD 9108) (the December 2003 
regulations). The December 2003 regulations were published in the 
Federal Register (68 FR 75128) on December 30, 2003.

Explanation of Provisions

    These regulations relate to the provisions for obtaining a private 
letter ruling and the tolling of the time for providing disclosure 
under Sec.  1.6011-4 and section 6111 and for maintaining a list under 
section 6112 during the time the request for a ruling is pending. 
Because the IRS and Treasury Department believe that the removal of the 
tolling provision will promote effective tax administration, these 
regulations eliminate the tolling of the time for providing disclosure 
and for maintaining the list when a taxpayer or a potential material 
advisor requests a private letter ruling. Proposed regulations removing 
the tolling provision are being issued concurrently with these 
temporary regulations. Taxpayers and potential material advisors may 
still request a ruling on a transaction under the regular procedures 
for requesting a ruling, provided the ruling request is not factual or 
hypothetical, but the time for providing disclosure or for maintaining 
a list will not be tolled. The removal of the tolling provision is 
effective for all ruling requests received on or after November 1, 
2006.

Special Analyses

    It has been determined that these regulations are not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required. It also has been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
does not apply to these regulations. For applicability of the 
Regulatory Flexibility Act, please refer to the cross-reference notice 
of proposed rulemaking published elsewhere in this issue of the Federal 
Register. Pursuant to section 7805(f) of the Internal Revenue Code, 
this regulation 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 authors of these regulations are Tara P. Volungis and 
Charles Wien, Office of the Associate Chief Counsel (Passthroughs and 
Special Industries). However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Amendments to the Regulations

0
Accordingly, 26 CFR parts 1 and 301 are amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by adding an 
entry in numerical order to read, in part, as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 1.6011-4T also issued under 26 U.S.C. 6011 * * *

0
Par. 2. Section 1.6011-4 is amended by:
0
1. Revising paragraphs (f)(1) and (f)(3).
0
2. Redesignating the text of paragraph (h) as (h)(1) and adding a 
heading.
0
3. Adding paragraph (h)(2).
    The revisions and additions read as follows:


Sec.  1.6011-4  Requirement of statement disclosing participation in 
certain transactions by taxpayers.

* * * * *
    (f) * * * (1) [Reserved]. For further guidance, see Sec.  1.6011-
4T(f)(1).
    (2) * * *
    (3) [Reserved]. For further guidance, see Sec.  1.6011-4T(f)(1).
* * * * *
    (h) Effective date--(1) In general. * * *
    (2) [Reserved]. For further guidance, see Sec.  1.6011-4T(h)(2).


0
Par. 3. Section 1.6011-4T is added to read as follows:


Sec.  1.6011-4T  Requirement of statement disclosing participation in 
certain transactions by taxpayers (temporary).

    (a) through (e) [Reserved]. For further guidance, see Sec.  1.6011-
4(a) through (e).
    (f) Rulings and protective disclosures--(1) Rulings. If a taxpayer 
requests a ruling on the merits of a specific transaction on or before 
the date that disclosure would otherwise be required under this 
section, and receives a favorable ruling as to the transaction, the 
disclosure rules under this section will be deemed to have been 
satisfied by that taxpayer with regard to that transaction, so long as 
the request fully discloses all relevant facts relating to the 
transaction which would otherwise be required to be disclosed under 
this section. If a taxpayer requests a ruling as to whether a specific 
transaction is a reportable transaction on or before the date that 
disclosure would otherwise be required under this section, the 
Commissioner in his discretion may determine that the submission 
satisfies the disclosure rules under this section for the taxpayer 
requesting the ruling for that transaction if the request fully 
discloses all relevant facts relating to the transaction which would 
otherwise be required to be disclosed under this section. The potential 
obligation of the taxpayer to disclose the transaction under this 
section will not be suspended during the period that the ruling request 
is pending.
    (f)(2) through (g) [Reserved]. For further guidance, see Sec.  
1.6011-4(f)(2) through (g).
    (h) Effective date--(1) [Reserved]. For further guidance, see Sec.  
1.6011-4(h)(1).
    (2) Tolling provision. Paragraph (f)(1) of this section applies to 
ruling requests received on or after November 1, 2006. The 
applicability of this section expires on or before November 2, 2009.

[[Page 64460]]

PART 301--PROCEDURE AND ADMINISTRATION

0
Par. 4. The authority citation for part 301 is amended by adding an 
entry in numerical order to read, in part, as follows:

    Authority: 26 U.S.C. 7805 * * *
    Section 301.6111-3T also issued under 26 U.S.C. 6111 * * *


0
Par. 5. Section 301.6111-3T is added to read as follows:


Sec.  301.6111-3T  Disclosure of reportable transactions (temporary).

    (a) through (g) [Reserved].
    (h) Rulings. If a potential material advisor requests a ruling as 
to whether a specific transaction is a reportable transaction on or 
before the date that disclosure would otherwise be required under this 
section, the Commissioner in his discretion may determine that the 
submission satisfies the disclosure rules under this section for that 
transaction if the request fully discloses all relevant facts relating 
to the transaction which would otherwise be required to be disclosed 
under this section. The potential obligation of the person to disclose 
the transaction under this section (or to maintain or furnish the list 
under Sec.  301.6112-1) will not be suspended during the period that 
the ruling request is pending.
    (i) Effective date--(1) [Reserved].
    (2) Tolling provision. Paragraph (h) of this section applies to 
ruling requests received on or after November 1, 2006. The 
applicability of this section expires on or before November 2, 2009.


0
Par. 6. Section 301.6112-1 is amended by revising paragraph (i) to read 
as follows:


Sec.  301.6112-1  Requirement to prepare, maintain, and furnish lists 
with respect to potentially abusive tax shelters.

* * * * *
    (i) [Reserved]. For further guidance, see Sec.  301.6111-3T(h).
* * * * *

Mark E. Matthews,
Deputy Commissioner for Services and Enforcement.
     Approved: October 25, 2006.
Eric Solomon,
Acting Deputy Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E6-18317 Filed 11-1-06; 8:45 am]
BILLING CODE 4830-01-P