Disclosure Requirements With Respect to Prohibited Tax Shelter Transactions, 36869-36871 [E7-12903]
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36869
Federal Register / Vol. 72, No. 129 / Friday, July 6, 2007 / Rules and Regulations
not expected to cause any potentially
significant environmental impacts, and
no extraordinary circumstances exist
that warrant preparation of an
environmental assessment.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference,
Navigation (air).
The Amendment
In consideration of the foregoing, the
Federal Aviation Administration
I
§ 71.1
proposes to amend 14 CFR part 71 as
follows:
PART 71—DESIGNATION OF CLASS A,
B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND
REPORTING POINTS
1. The authority citation for part 71
continues to read as follows:
2. The incorporation by reference in
14 CFR 71.1 of FAA Order 7400.9P,
Airspace Designations and Reporting
Points, dated September 1, 2006, and
effective September 15, 2006, is
amended as follows:
Paragraph 6011
Area Navigation Routes.
*
*
I
I
Authority: 49 U.S.C. 106(g), 40103, 40113,
40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–
1963 Comp., p. 389.
T–245 Seal Beach, CA (SLI) to SILEX [New]
Seal Beach (SLI) ............................................ VORTAC ........................................................
POPPR ............................................................ Fix ..................................................................
Santa Monica (SMO) ..................................... VOR/DME ......................................................
SILEX ............................................................. Fix ..................................................................
(Lat.
(Lat.
(Lat.
(Lat.
*
*
*
*
*
T–247 Seal Beach, CA (SLI) to CANOG [New]
Seal Beach (SLI) ............................................ VORTAC ........................................................ (Lat.
POPPR ............................................................ Fix .................................................................. (Lat.
Santa Monica (SMO) ..................................... VOR/DME ...................................................... (Lat.
CANOG .......................................................... Fix .................................................................. (Lat.
*
*
T–249 Van Nuys, CA (VNY) to Seal Beach,
Van Nuys (VNY) ...........................................
Santa Monica (SMO) .....................................
POPPR ............................................................
Seal Beach (SLI) ............................................
*
*
*
*
*
Issued in Washington, DC, June 28, 2007.
Edith V. Parish,
Manager, Airspace and Rules Group.
[FR Doc. E7–13004 Filed 7–5–07; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[TD 9335]
RIN 1545–BG19
Disclosure Requirements With Respect
to Prohibited Tax Shelter Transactions
Internal Revenue Service (IRS),
Treasury.
ACTION: Temporary regulations.
jlentini on PROD1PC65 with RULES
AGENCY:
SUMMARY: This document contains
temporary regulations under section
6033(a)(2) of the Internal Revenue Code
(Code) that provide rules regarding the
form, manner and timing of disclosure
obligations with respect to prohibited
tax shelter transactions to which taxexempt entities are parties. These
temporary regulations affect a broad
array of tax-exempt entities, including
charities, state and local government
VerDate Aug<31>2005
20:11 Jul 05, 2007
Jkt 211001
[Amended]
*
*
*
CA [New]
VOR/DME ...................................................... (Lat.
VOR/DME ...................................................... (Lat.
Fix .................................................................. (Lat.
VORTAC ........................................................ (Lat.
entities, Indian Tribal governments and
employee benefit plans, as well as entity
managers of these entities. This action is
necessary to implement section 516 of
the Tax Increase Prevention and
Reconciliation Act of 2005. The text of
the temporary regulations also serves as
the text of the proposed regulations set
forth in the Proposed Rules section in
this issue of the Federal Register.
DATES: Effective Date: These regulations
are effective on July 6, 2007.
Applicability Date: For dates of
applicability, see § 1.6033–5T(g).
FOR FURTHER INFORMATION CONTACT:
Galina Kolomietz, (202) 622–6070, or
Michael Blumenfeld, (202) 622–1124
(not toll-free numbers). For questions
specifically relating to qualified pension
plans, individual retirement accounts,
and similar tax-favored savings
arrangements, contact Dana Barry, (202)
622–6060 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The Tax Increase Prevention and
Reconciliation Act of 2005, Public Law
109–222 (120 Stat. 345) (TIPRA),
enacted on May 17, 2006, defines
certain transactions as prohibited tax
shelter transactions and imposes excise
taxes and disclosure requirements with
respect to prohibited tax shelter
transactions to which a tax-exempt
PO 00000
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Fmt 4700
Sfmt 4700
*
*
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33°50′34″
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long.
long.
long.
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118°03′17″
118°17′18″
118°27′24″
118°36′39″
W.)
W.)
W.)
W.)
*
33°47′00″
33°50′34″
34°00′37″
34°13′24″
N.,
N.,
N.,
N.,
long.
long.
long.
long.
*
118°03′17″
118°17′18″
118°27′24″
118°35′39″
W.)
W.)
W.)
W.)
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34°13′24″
34°00′37″
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N.,
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long.
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long.
*
118°29′30″
118°27′24″
118°17′18″
118°03′17″
W.)
W.)
W.)
W.)
entity is a party. TIPRA creates new
section 4965 and amends sections
6033(a)(2) and 6011(g) of the Code. The
amended section 6033(a)(2) requires
every tax-exempt entity to which
section 4965 applies that is a party to a
prohibited tax shelter transaction to
disclose to the IRS (in such form and
manner and at such time as determined
by the Secretary) the following
information: (a) That such entity is a
party to the prohibited tax shelter
transaction; and (b) the identity of any
other party to the transaction which is
known to the tax-exempt entity. The
amended section 6011(g) requires any
taxable party to a prohibited tax shelter
transaction to disclose by statement to
any tax-exempt entity to which section
4965 applies that is a party to such
transaction that such transaction is a
prohibited tax shelter transaction.
On July 11, 2006, the IRS released
Notice 2006–65 (2006–31 IRB 102),
which alerted taxpayers to the new
provisions. On February 7, 2007, the IRS
released Notice 2007–18 (2007–9 IRB
608), which provided interim guidance
regarding the circumstances under
which a tax-exempt entity will be
treated as a party to a prohibited tax
shelter transaction for purposes of
sections 4965, 6033(a)(2) and 6011(g)
and regarding the allocation to various
periods of net income and proceeds
E:\FR\FM\06JYR1.SGM
06JYR1
36870
Federal Register / Vol. 72, No. 129 / Friday, July 6, 2007 / Rules and Regulations
attributable to a prohibited tax shelter
transaction, including amounts received
prior to the effective date of the section
4965 tax. See § 601.601(d)(2)(ii)(b).
These temporary regulations are being
issued concurrently with proposed
regulations under sections 4965,
6033(a)(2) and 6011(g) published
elsewhere in the Federal Register.
Penalties, Reporting and recordkeeping
requirements.
Explanation of Provisions
These temporary regulations contain
rules concerning disclosure
requirements imposed by section
6033(a)(2) on tax-exempt entities that
are parties to prohibited tax shelter
transactions. Proposed regulations
providing rules concerning disclosure
requirements under section 6033(a)(2)
are being issued concurrently with these
temporary regulations.
I
Effective Date
These temporary regulations are
applicable with respect to transactions
entered into by a tax-exempt entity after
May 17, 2006.
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. For the
applicability of the Regulatory
Flexibility Act (5 U.S.C. chapter 6), refer
to the Special Analyses section of the
preamble to the cross-referencing notice
of proposed rulemaking published in
the Proposed Rules section in this issue
of the Federal Register. Pursuant to
section 7805(f) of the Code, these
regulations have been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on their impact on small business.
Drafting Information
The principal authors of these
regulations are Galina Kolomietz and
Dana Barry, Office of Division Counsel/
Associate Chief Counsel (Tax Exempt
and Government Entities). However,
other personnel from the IRS and the
Treasury Department participated in
their development.
jlentini on PROD1PC65 with RULES
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,
VerDate Aug<31>2005
20:11 Jul 05, 2007
Jkt 211001
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR parts 1 and 301
are amended as follows:
I
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read in part as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.6033–5T is added to
read as follows:
I
§ 1.6033–5T Disclosure by tax-exempt
entities that are parties to certain reportable
transactions (temporary).
(a) In general. Every tax-exempt entity
(as defined in section 4965(c)) shall file
with the IRS on Form 8886–T,
‘‘Disclosure by Tax-Exempt Entity
Regarding Prohibited Tax Shelter
Transaction’’ (or a successor form), in
accordance with this section and the
instructions to the form, a disclosure
of—
(1) Such entity’s being a party (as
defined in paragraph (b) of this section)
to a prohibited tax shelter transaction
(as defined in section 4965(e)); and
(2) The identity of any other party
(whether taxable or tax-exempt) to such
transaction that is known to the taxexempt entity.
(b) Definition of tax-exempt party to a
prohibited tax shelter transaction—(1)
In general. For purposes of section
6033(a)(2), a tax-exempt entity is a party
to a prohibited tax shelter transaction if
the entity—
(i) Facilitates a prohibited tax shelter
transaction by reason of its tax-exempt,
tax indifferent or tax-favored status;
(ii) Enters into a listed transaction and
the tax-exempt entity’s tax return
(whether an original or an amended
return) reflects a reduction or
elimination of its liability for applicable
Federal employment, excise or
unrelated business income taxes that is
derived directly or indirectly from tax
consequences or tax strategy described
in the published guidance that lists the
transaction; or
(iii) Is identified in published
guidance, by type, class or role, as a
party to a prohibited tax shelter
transaction.
(2) Published guidance may identify
which tax-exempt entities, by type, class
or role, will not be treated as a party to
a prohibited tax shelter transaction for
purposes of section 6033(a)(2).
(c) Frequency of disclosure. A single
disclosure is required for each
prohibited tax shelter transaction.
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(d) By whom disclosure is made—(1)
Tax-exempt entities referred to in
section 4965(c)(1), (2) or (3). In the case
of tax-exempt entities referred to in
section 4965(c)(1), (2) or (3), the
disclosure required by this section must
be made by the entity.
(2) Tax-exempt entities referred to in
section 4965(c)(4), (5), (6) or (7). In the
case of tax-exempt entities referred to in
section 4965(c)(4), (5), (6) or (7),
including a fully self-directed qualified
plan, IRA, or other savings arrangement,
the disclosure required by this section
must be made by the entity manager (as
defined in section 4965(d)(2)) of the
entity.
(e) Time and place for filing—(1) Taxexempt entities described in paragraph
(b)(1)(i) of this section—(i) In general.
The disclosure required by this section
shall be filed on or before May 15 of the
calendar year following the close of the
calendar year during which the taxexempt entered into the prohibited tax
shelter transaction.
(ii) Subsequently listed transactions.
In the case of subsequently listed
transactions (as defined in section
4965(e)(2)), the disclosure required by
this section shall be filed on or before
May 15 of the calendar year following
the close of the calendar year during
which the transaction was identified by
the Secretary as a listed transaction.
(2) Tax-exempt entities described in
paragraph (b)(1)(ii) of this section. The
disclosure required by this section shall
be filed on or before the date on which
the first tax return (whether an original
or an amended return) is filed which
reflects a reduction or elimination of the
tax-exempt entity’s liability for
applicable Federal employment, excise
or unrelated business income taxes that
is derived directly or indirectly from tax
consequences or tax strategy described
in the published guidance that lists the
transaction.
(3) Transition rule. If a tax-exempt
entity entered into a prohibited tax
shelter transaction after May 17, 2006
and before January 1, 2007, the
disclosure required by this section shall
be filed—
(i) In the case of tax-exempt entities
described in paragraph (b)(1)(i) of this
section, on or before November 5, 2007;
(ii) In the case of tax-exempt entities
described in paragraph (b)(1)(ii) of this
section, on or before the later of—
(A) November 5, 2007; or
(B) The date on which the first tax
return (whether an original or an
amended return) is filed which reflects
a reduction or elimination of the taxexempt entity’s liability for applicable
Federal employment, excise or
unrelated business income taxes that is
E:\FR\FM\06JYR1.SGM
06JYR1
Federal Register / Vol. 72, No. 129 / Friday, July 6, 2007 / Rules and Regulations
derived directly or indirectly from tax
consequences or tax strategy described
in the published guidance that lists the
transaction.
(4) Disclosure is not required with
respect to any prohibited tax shelter
transaction entered into by a tax-exempt
entity on or before May 17, 2006.
(f) Penalty for failure to provide
disclosure statement. See section
6652(c)(3) for penalties applicable to
failure to disclose a prohibited tax
shelter transaction in accordance with
this section.
(g) Effective date—(1) Applicability
date. This section applies with respect
to transactions entered into by a taxexempt entity after May 17, 2006.
(2) Expiration date. This section will
expire on July 6, 2010.
PART 301—PROCEDURE AND
ADMINISTRATION
I Par. 3. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
I Par. 4. Section 301.6033–5T is added
to read as follows:
§ 301.6033–5T Disclosure by tax-exempt
entities that are parties to certain reportable
transactions (temporary).
(a) In general. For provisions relating
to the requirement of the disclosure by
a tax-exempt entity that it is a party to
certain reportable transactions, see
§ 1.6033–5T of this chapter (Income Tax
Regulations).
(b) Effective date—(1) Applicability
date. This section applies with respect
to transactions entered into by a taxexempt entity after May 17, 2006.
(2) Expiration date. This section will
expire on July 5, 2010.
Kevin M. Brown,
Deputy Commissioner for Services and
Enforcement.
Approved: June 21, 2007.
Eric Solomon,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. E7–12903 Filed 7–5–07; 8:45 am]
jlentini on PROD1PC65 with RULES
BILLING CODE 4830–01–P
VerDate Aug<31>2005
20:11 Jul 05, 2007
Jkt 211001
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 53 and 54
[TD 9334]
RIN 1545–BG20
Requirement of Return and Time for
Filing
Internal Revenue Service (IRS),
Treasury.
ACTION: Final and temporary
regulations.
AGENCY:
SUMMARY: This document contains final
and temporary regulations providing
guidance relating to the requirement of
a return to accompany payment of
excise taxes under section 4965 of the
Internal Revenue Code (Code) and the
time for filing that return. These
regulations affect a broad array of taxexempt entities, including charities,
state and local government entities,
Indian tribal governments and employee
benefit plans, as well as entity managers
of these entities. This action is
necessary to implement section 516 of
the Tax Increase Prevention and
Reconciliation Act of 2005. The text of
the temporary regulations also serves as
the text of the proposed regulations set
forth in the Proposed Rules section in
this issue of the Federal Register.
DATES: Effective date. These regulations
are effective on July 6, 2007.
Applicability date. For dates of
applicability, see §§ 53.6071–1T(g) and
54.6011–1T(c) of these regulations.
FOR FURTHER INFORMATION CONTACT:
Galina Kolomietz, (202) 622–6070,
Michael Blumenfeld, (202) 622–1124, or
Dana Barry, (202) 622–6060 (not tollfree numbers).
SUPPLEMENTARY INFORMATION:
Background
The Tax Increase Prevention and
Reconciliation Act of 2005, Public Law
109–222 (120 Stat. 345) (TIPRA),
enacted on May 17, 2006, added section
4965 to the Code. Section 4965 affects
a broad array of tax-exempt entities as
defined in section 4965(c). Tax-exempt
entities described in section 4965(c)(1),
(2), or (3) (referred to herein as ‘‘nonplan entities’’) include entities
described in section 501(c), religious or
apostolic associations or corporations
described in section 501(d), entities
described in section 170(c), including
states, possessions of the United States,
the District of Columbia, political
subdivisions of states and political
subdivisions of possessions of the
United States (but not including the
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Frm 00013
Fmt 4700
Sfmt 4700
36871
United States), and Indian tribal
governments within the meaning of
section 7701(a)(40). Tax-exempt entities
described in section 4965(c)(4), (c)(5),
(c)(6), or (c)(7) (referred to herein as
‘‘plan entities’’) include tax-favored
retirement plans, individual retirement
arrangements, and savings arrangements
described in section 401(a), 403(a),
403(b), 529, 457(b), 408(a), 220(d),
408(b), 530 or 223(d).
Section 4965 imposes two new excise
taxes, one on the tax-exempt entity (the
entity-level tax) and the other on certain
of the tax-exempt entity’s managers (the
manager-level tax). The entity-level tax
is imposed on non-plan entities that are
parties to prohibited tax shelter
transactions. The entity-level tax does
not apply to plan entities. Prohibited tax
shelter transactions are transactions that
are identified by the IRS as ‘‘listed
transactions’’ (within the meaning of
section 6707A(c)(2)) and reportable
transactions that are confidential
transactions or transactions with
contractual protection (as defined in
section 6707A(c)(1) and § 1.6011–4(b) of
this chapter).
The entity-level tax applies to each
taxable year during which the non-plan
entity is a party to a prohibited tax
shelter transaction and has net income
or proceeds attributable to the
transaction which are properly allocable
to that taxable year. The amount of the
entity-level tax depends on whether the
non-plan entity knew or had reason to
know that the transaction was a
prohibited tax shelter transaction at the
time the entity became a party to the
transaction. If the non-plan entity did
not know (and did not have reason to
know) that the transaction was a
prohibited tax shelter transaction at the
time the entity became a party to the
transaction, the tax is the highest rate of
tax under section 11 (currently 35
percent) multiplied by the greater of: (i)
The entity’s net income with respect to
the prohibited tax shelter transaction
(after taking into account any tax
imposed by Subtitle D, other than by
this section, with respect to such
transaction) for the taxable year or (ii)
75 percent of the proceeds received by
the entity for the taxable year that are
attributable to such transaction. If the
non-plan entity knew or had reason to
know that the transaction was a
prohibited tax shelter transaction at the
time the entity became a party to the
transaction, the tax is the greater of (i)
100 percent of the entity’s net income
with respect to the transaction (after
taking into account any tax imposed by
Subtitle D, other than by this section,
with respect to such transaction) for the
taxable year or (ii) 75 percent of the
E:\FR\FM\06JYR1.SGM
06JYR1
]]>Agencies
[Federal Register Volume 72, Number 129 (Friday, July 6, 2007)]
[Rules and Regulations]
[Pages 36869-36871]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-12903]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 301
[TD 9335]
RIN 1545-BG19
Disclosure Requirements With Respect to Prohibited Tax Shelter
Transactions
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains temporary regulations under section
6033(a)(2) of the Internal Revenue Code (Code) that provide rules
regarding the form, manner and timing of disclosure obligations with
respect to prohibited tax shelter transactions to which tax-exempt
entities are parties. These temporary regulations affect a broad array
of tax-exempt entities, including charities, state and local government
entities, Indian Tribal governments and employee benefit plans, as well
as entity managers of these entities. This action is necessary to
implement section 516 of the Tax Increase Prevention and Reconciliation
Act of 2005. The text of the temporary regulations also serves as the
text of the proposed regulations set forth in the Proposed Rules
section in this issue of the Federal Register.
DATES: Effective Date: These regulations are effective on July 6, 2007.
Applicability Date: For dates of applicability, see Sec. 1.6033-
5T(g).
FOR FURTHER INFORMATION CONTACT: Galina Kolomietz, (202) 622-6070, or
Michael Blumenfeld, (202) 622-1124 (not toll-free numbers). For
questions specifically relating to qualified pension plans, individual
retirement accounts, and similar tax-favored savings arrangements,
contact Dana Barry, (202) 622-6060 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The Tax Increase Prevention and Reconciliation Act of 2005, Public
Law 109-222 (120 Stat. 345) (TIPRA), enacted on May 17, 2006, defines
certain transactions as prohibited tax shelter transactions and imposes
excise taxes and disclosure requirements with respect to prohibited tax
shelter transactions to which a tax-exempt entity is a party. TIPRA
creates new section 4965 and amends sections 6033(a)(2) and 6011(g) of
the Code. The amended section 6033(a)(2) requires every tax-exempt
entity to which section 4965 applies that is a party to a prohibited
tax shelter transaction to disclose to the IRS (in such form and manner
and at such time as determined by the Secretary) the following
information: (a) That such entity is a party to the prohibited tax
shelter transaction; and (b) the identity of any other party to the
transaction which is known to the tax-exempt entity. The amended
section 6011(g) requires any taxable party to a prohibited tax shelter
transaction to disclose by statement to any tax-exempt entity to which
section 4965 applies that is a party to such transaction that such
transaction is a prohibited tax shelter transaction.
On July 11, 2006, the IRS released Notice 2006-65 (2006-31 IRB
102), which alerted taxpayers to the new provisions. On February 7,
2007, the IRS released Notice 2007-18 (2007-9 IRB 608), which provided
interim guidance regarding the circumstances under which a tax-exempt
entity will be treated as a party to a prohibited tax shelter
transaction for purposes of sections 4965, 6033(a)(2) and 6011(g) and
regarding the allocation to various periods of net income and proceeds
[[Page 36870]]
attributable to a prohibited tax shelter transaction, including amounts
received prior to the effective date of the section 4965 tax. See Sec.
601.601(d)(2)(ii)(b).
These temporary regulations are being issued concurrently with
proposed regulations under sections 4965, 6033(a)(2) and 6011(g)
published elsewhere in the Federal Register.
Explanation of Provisions
These temporary regulations contain rules concerning disclosure
requirements imposed by section 6033(a)(2) on tax-exempt entities that
are parties to prohibited tax shelter transactions. Proposed
regulations providing rules concerning disclosure requirements under
section 6033(a)(2) are being issued concurrently with these temporary
regulations.
Effective Date
These temporary regulations are applicable with respect to
transactions entered into by a tax-exempt entity after May 17, 2006.
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. For the
applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6),
refer to the Special Analyses section of the preamble to the cross-
referencing notice of proposed rulemaking published in the Proposed
Rules section in this issue of the Federal Register. Pursuant to
section 7805(f) of the Code, these regulations have been submitted to
the Chief Counsel for Advocacy of the Small Business Administration for
comment on their impact on small business.
Drafting Information
The principal authors of these regulations are Galina Kolomietz and
Dana Barry, Office of Division Counsel/Associate Chief Counsel (Tax
Exempt and Government Entities). However, other personnel from the IRS
and the 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.
Adoption of 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 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.6033-5T is added to read as follows:
Sec. 1.6033-5T Disclosure by tax-exempt entities that are parties to
certain reportable transactions (temporary).
(a) In general. Every tax-exempt entity (as defined in section
4965(c)) shall file with the IRS on Form 8886-T, ``Disclosure by Tax-
Exempt Entity Regarding Prohibited Tax Shelter Transaction'' (or a
successor form), in accordance with this section and the instructions
to the form, a disclosure of--
(1) Such entity's being a party (as defined in paragraph (b) of
this section) to a prohibited tax shelter transaction (as defined in
section 4965(e)); and
(2) The identity of any other party (whether taxable or tax-exempt)
to such transaction that is known to the tax-exempt entity.
(b) Definition of tax-exempt party to a prohibited tax shelter
transaction--(1) In general. For purposes of section 6033(a)(2), a tax-
exempt entity is a party to a prohibited tax shelter transaction if the
entity--
(i) Facilitates a prohibited tax shelter transaction by reason of
its tax-exempt, tax indifferent or tax-favored status;
(ii) Enters into a listed transaction and the tax-exempt entity's
tax return (whether an original or an amended return) reflects a
reduction or elimination of its liability for applicable Federal
employment, excise or unrelated business income taxes that is derived
directly or indirectly from tax consequences or tax strategy described
in the published guidance that lists the transaction; or
(iii) Is identified in published guidance, by type, class or role,
as a party to a prohibited tax shelter transaction.
(2) Published guidance may identify which tax-exempt entities, by
type, class or role, will not be treated as a party to a prohibited tax
shelter transaction for purposes of section 6033(a)(2).
(c) Frequency of disclosure. A single disclosure is required for
each prohibited tax shelter transaction.
(d) By whom disclosure is made--(1) Tax-exempt entities referred to
in section 4965(c)(1), (2) or (3). In the case of tax-exempt entities
referred to in section 4965(c)(1), (2) or (3), the disclosure required
by this section must be made by the entity.
(2) Tax-exempt entities referred to in section 4965(c)(4), (5), (6)
or (7). In the case of tax-exempt entities referred to in section
4965(c)(4), (5), (6) or (7), including a fully self-directed qualified
plan, IRA, or other savings arrangement, the disclosure required by
this section must be made by the entity manager (as defined in section
4965(d)(2)) of the entity.
(e) Time and place for filing--(1) Tax-exempt entities described in
paragraph (b)(1)(i) of this section--(i) In general. The disclosure
required by this section shall be filed on or before May 15 of the
calendar year following the close of the calendar year during which the
tax-exempt entered into the prohibited tax shelter transaction.
(ii) Subsequently listed transactions. In the case of subsequently
listed transactions (as defined in section 4965(e)(2)), the disclosure
required by this section shall be filed on or before May 15 of the
calendar year following the close of the calendar year during which the
transaction was identified by the Secretary as a listed transaction.
(2) Tax-exempt entities described in paragraph (b)(1)(ii) of this
section. The disclosure required by this section shall be filed on or
before the date on which the first tax return (whether an original or
an amended return) is filed which reflects a reduction or elimination
of the tax-exempt entity's liability for applicable Federal employment,
excise or unrelated business income taxes that is derived directly or
indirectly from tax consequences or tax strategy described in the
published guidance that lists the transaction.
(3) Transition rule. If a tax-exempt entity entered into a
prohibited tax shelter transaction after May 17, 2006 and before
January 1, 2007, the disclosure required by this section shall be
filed--
(i) In the case of tax-exempt entities described in paragraph
(b)(1)(i) of this section, on or before November 5, 2007;
(ii) In the case of tax-exempt entities described in paragraph
(b)(1)(ii) of this section, on or before the later of--
(A) November 5, 2007; or
(B) The date on which the first tax return (whether an original or
an amended return) is filed which reflects a reduction or elimination
of the tax-exempt entity's liability for applicable Federal employment,
excise or unrelated business income taxes that is
[[Page 36871]]
derived directly or indirectly from tax consequences or tax strategy
described in the published guidance that lists the transaction.
(4) Disclosure is not required with respect to any prohibited tax
shelter transaction entered into by a tax-exempt entity on or before
May 17, 2006.
(f) Penalty for failure to provide disclosure statement. See
section 6652(c)(3) for penalties applicable to failure to disclose a
prohibited tax shelter transaction in accordance with this section.
(g) Effective date--(1) Applicability date. This section applies
with respect to transactions entered into by a tax-exempt entity after
May 17, 2006.
(2) Expiration date. This section will expire on July 6, 2010.
PART 301--PROCEDURE AND ADMINISTRATION
0
Par. 3. The authority citation for part 301 continues to read in part
as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 4. Section 301.6033-5T is added to read as follows:
Sec. 301.6033-5T Disclosure by tax-exempt entities that are parties
to certain reportable transactions (temporary).
(a) In general. For provisions relating to the requirement of the
disclosure by a tax-exempt entity that it is a party to certain
reportable transactions, see Sec. 1.6033-5T of this chapter (Income
Tax Regulations).
(b) Effective date--(1) Applicability date. This section applies
with respect to transactions entered into by a tax-exempt entity after
May 17, 2006.
(2) Expiration date. This section will expire on July 5, 2010.
Kevin M. Brown,
Deputy Commissioner for Services and Enforcement.
Approved: June 21, 2007.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E7-12903 Filed 7-5-07; 8:45 am]
BILLING CODE 4830-01-P
