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IRS Lists Corporate Tax Shelters

FEB. 28, 2000

Notice 2000-15; 2000-12 IRB 1

DATED FEB. 28, 2000
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    returns
    shelters, registration
    shelters, investor lists
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-5712 (3 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 40-14
Citations: Notice 2000-15; 2000-12 IRB 1

 

=============== SUMMARY ===============

 

The Service has listed (Notice 2000-15) transactions that it has determined are tax avoidance transactions. Transactions that it considers corporate tax shelters include transactions in which the reasonably expected economic profit is insubstantial in comparison to the value of the expected foreign tax credits, or a taxpayer purports to lease property and then subleases it back to the lessor. The IRS also says that corporate tax shelters may involve the distribution of encumbered property in which taxpayers claim tax losses for capital outlays that they have in fact recovered, or the acquisition of two debt instruments with values that are expected to change significantly at about the same time in opposite directions.

 

=============== FULL TEXT ===============

 

Part III -- Administrative, Procedural, and Miscellaneous

[1] Transactions that are the same as or substantially similar to transactions described in the list below have been determined by the Internal Revenue Service to be tax avoidance transactions and are identified as Alisted transactions@ for purposes of section 1.6011- 4T(b)(2) of the Temporary Income Tax Regulations and section 301.6111-2T(b)(2) of the Temporary Procedure and Administration Regulations. As a result, corporate taxpayers may need to disclose their participation in these listed transactions as prescribed in section 1.6011-4T, and promoters (or other persons responsible for registering tax shelter transactions) may need to register such transactions under section 301.6111-2T. In addition, promoters must maintain lists of investors with respect to these listed transactions pursuant to section 301.6112-1T.

(1) Rev. Rul. 90-105, 1990-2 C.B. 69 (transactions in which

 

taxpayers claim deductions for contributions to a qualified cash or

 

deferred arrangement or matching contributions to a defined

 

contribution plan where the contributions are attributable to

 

compensation earned by plan participants after the end of the taxable

 

year);

 

 

(2) Notice 95-34, 1995-1 C.B. 309 (certain trust arrangements

 

purported to qualify as multiple employer welfare benefit funds

 

exempt from the limits of sections 419 and 419A of the Internal

 

Revenue Code);

 

 

(3) Notice 95-53, 1995-2 C.B 334 (certain multiple-party

 

transactions intended to allow one party to realize rental or other

 

income from property or service contracts and to allow another party

 

to report deductions related to that income (often referred to as

 

"lease strips"));

 

 

(4) Transactions described in Part II of Notice 98-5, 1998-1

 

C.B. 334 (transactions in which the reasonably expected economic

 

profit is insubstantial in comparison to the value of the expected

 

foreign tax credits);

 

 

(5) Transactions substantially similar to those at issue in ASA

 

Investerings Partnership v. Commissioner, No. 98-1583 (D.C. Cir. Feb.

 

1, 2000) and ACM Partnership v. Commissioner, 157 F.3d 231 (3d Cir.

 

1998) (transactions involving contingent installment sales of

 

securities by partnerships in order to accelerate and allocate income

 

to a tax-indifferent partner, such as a tax-exempt entity or foreign

 

person, and to allocate later losses to another partner);

 

 

(6) Prop. Treas. Reg. section 1.643(a)-8 (transactions involving

 

distributions described in section 1.643(a)-8 from charitable

 

remainder trusts);

 

 

(7) Rev. Rul. 99-14, 1999-13 I.R.B. 3 (transactions in which a

 

taxpayer purports to lease property and then purports to immediately

 

sublease it back to the lessor (that is, lease-in/lease out or LILO

 

transactions));

 

 

(8) Notice 99-59, 1999-52 I.R.B. 761 (transactions involving the

 

distribution of encumbered property in which taxpayers claim tax

 

losses for capital outlays that they have in fact recovered);

 

 

(9) Treas. Reg. section 1.7701(l)-3 (transactions involving

 

fast-pay arrangements as defined in section 1.7701(l)-3(b)); and

 

 

(10) Rev. Rul. 2000-12, 2000-11 I.R.B. __, dated March 13, 2000

 

(certain transactions involving the acquisition of two debt

 

instruments the values of which are expected to change significantly

 

at about the same time in opposite directions).

 

 

[2] The principal author of this notice is Richard Castanon of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice contact Richard Castanon on (202) 622-3080 (not a toll-free call).
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Areas/Tax Topics
  • Index Terms
    returns
    shelters, registration
    shelters, investor lists
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-5712 (3 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 40-14
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