(Archived Content)
The Treasury Department and the Internal Revenue Service today issued modifications to the corporate tax shelter disclosure and registration regulations. The regulations requiring corporate taxpayers to disclose certain transactions on their tax returns have been modified to focus better on transactions meriting IRS review. In particular, the modifications eliminate a characteristic that triggers reporting of many legitimate business transactions and clarify two exceptions to the reporting requirements.
The modifications to the temporary regulations will make the disclosure and registration rules more effective in identifying tax shelters and help taxpayers and practitioners to better understand and comply with the rules. This will allow the IRS to devote more time, effort and energy in identifying and pursuing abusive transactions, stated Mark Weinberger, Assistant Secretary of the Treasury (Tax Policy).
In addition, modifications have been made to the rules requiring promoters to register confidential corporate tax shelters to ensure that registration occurs where promoters restrict customers from disclosing written materials provided to them by the promoter.
This change will make certain that there is more sunshine on questionable transactions, Weinberger stated.
The changes are interim modifications in anticipation of the first significant filing of disclosures by corporate taxpayers in September. Treasury continues to study comments on the regulations and evaluate the operation of the regulations. Further changes may be made in the future.