n-03-11.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Effective Date of Regulations Under Sections 6011 and 6112

Notice 2003-11

SECTION 1. BACKGROUND

In Treasury Decisions 9017 and 9018, as published in the Federal Register on
October 22, 2002 (67 Fed. Reg. 64799; 67 Fed. Reg. 64807) (October 2002 temporary
regulations), the Department of the Treasury (Treasury) and the Internal Revenue
Service (Service) issued comprehensive amendments to the rules under § 1.6011-4T of
the temporary Income Tax Regulations and § 301.6112-1T of the temporary Procedure
and Administrative Regulations, and made corresponding amendments to § 301.6111-
2T.
See
2002-45 I.R.B. 815 and 823. These amendments related primarily to the
disclosure of reportable transactions under § 6011 of the Internal Revenue Code and
the list maintenance requirements for potentially abusive tax shelters under § 6112.
Specifically, Treasury and the Service revised and clarified the definition of “reportable
transaction” and the definition of “organizer and seller” to ensure that the Service
receives the information needed to evaluate certain types of potentially abusive
transactions and to improve compliance.

The October 2002 temporary regulations generally are effective for transactions
entered into on or after January 1, 2003. Taxpayers are not required to disclose
reportable transactions as defined under the October 2002 temporary disclosure
regulations until the time they file their tax return reporting those transactions. However,
under the October 2002 temporary list maintenance regulations, material advisors have
an immediate obligation to maintain lists with respect to reportable transactions.

Treasury and the Service have received numerous comments relating to the
October 2002 temporary disclosure regulations and the October 2002 temporary list
maintenance regulations. Treasury and the Service are currently reviewing these
comments. In particular, Treasury and the Service are reviewing the comments that
provide suggested clarifications to the rules pertaining to who must disclose
transactions. In addition, Treasury and the Service are considering clarifications as to
the persons required to maintain lists and the persons who must be included on lists.

Treasury and the Service also are reviewing the comments relating to the
reportable transaction categories of loss transactions and transactions with a significant
book-tax difference. More generally, Treasury and the Service are considering how the
rules in the October 2002 temporary regulations can be revised to exclude transactions
for which disclosure and maintenance of information under §§ 6011 and 6112 may be
unnecessary, while preserving the ability of Treasury and the Service to obtain

information about potentially abusive transactions. Treasury and the Service intend to
publish final regulations in February 2003.

SECTION 2. EFFECTIVE DATE FOR THE DISCLOSURE REGULATIONS UNDER
§ 6011

Treasury and the Service intend to revise the disclosure regulations under
§ 6011 to reflect the consideration of the comments received. Although the October
2002 temporary disclosure regulations under § 6011 will continue to apply to
transactions entered into on or after January 1, 2003, the revised regulations under
§ 6011 will permit taxpayers who entered into transactions on or after January 1, 2003,
and before the filing date of the revised regulations, to elect to apply the revised
regulations instead of the October 2002 temporary disclosure regulations.

SECTION 3. EFFECTIVE DATE FOR THE LIST MAINTENANCE REGULATIONS
UNDER § 6112

In order to provide necessary clarification to the October 2002 temporary list
maintenance regulations, Treasury and the Service will change the effective date of the
October 2002 temporary list maintenance regulations under § 6112 to the date the
revised regulations under § 6112 are filed. Except as provided below, the list
maintenance requirements under § 6112 will not apply to transactions entered into on or
after January 1, 2003, and before the filing date of the revised regulations under § 6112.
The delayed effective date, however, will not apply to listed transactions or transactions
that are § 6111 shelters as defined in § 301.6112-1T(b)(1) of the October 2002
temporary regulations.

SECTION 4. CONTACT INFORMATION

The principal author of this notice is Tara P. Volungis of the Office of Associate
Chief Counsel (Passthroughs and Special Industries). For further information regarding
this notice, contact Ms. Volungis at (202) 622-3080 (not a toll-free call).