§6111 — Disclosure of reportable transactions
34 cases·9 followed·2 overruled·23 cited—26% support
Statute Text — 26 U.S.C. §6111
Each material advisor with respect to any reportable transaction shall make a return (in such form as the Secretary may prescribe) setting forth—
information identifying and describing the transaction,
information describing any potential tax benefits expected to result from the transaction, and
such other information as the Secretary may prescribe.
Such return shall be filed not later than the date specified by the Secretary.
For purposes of this section:
The term “material advisor” means any person—
who provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction, and
who directly or indirectly derives gross income in excess of the threshold amount (or such other amount as may be prescribed by the Secretary) for such aid, assistance, or advice.
For purposes of subparagraph (A), the threshold amount is—
$50,000 in the case of a reportable transaction substantially all of the tax benefits from which are provided to natural persons, and
$250,000 in any other case.
The term “reportable transaction” has the meaning given to such term by section 6707A(c).
The Secretary may prescribe regulations which provide—
that only 1 person shall be required to meet the requirements of subsection (a) in cases in which 2 or more persons would otherwise be required to meet such requirements,
exemptions from the requirements of this section, and
such rules as may be necessary or appropriate to carry out the purposes of this section.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §301.6111-1T Questions and answers relating to tax shelter registration
- Treas. Reg. §Treas. Reg. §301.6111-1T(a) §301.6111-1T(a)
- Treas. Reg. §Treas. Reg. §301.6111-1T(b) Before the date on which the tax shelter or a tax shelter organizer sends the investor any schedule of profit or loss, or income, deduction, or credit that may be used in preparing the investor's income tax return for the taxable year that includes the date on which the tax shelter ceases to be a projected income investment.
- Treas. Reg. §Treas. Reg. §301.6111-1T(c) The cumulative projected income for an investor as of the close of a year is the gross income of the investor with respect to the investment, for all periods up to (and including) the end of such year, that is included in the financial projection or upon which the representation is based.
- Treas. Reg. §Treas. Reg. §301.6111-1T(d) The cumulative projected credits for an investor as of the close of a year are the gross credits of the investor with respect to the investment, for all periods up to (and including) the close of such year, that are included in the financial projection or upon which the representation is based.
- Treas. Reg. §Treas. Reg. §301.6111-1T(e) The cumulative projected tax liability (without regard to credits) for an investor as of the close of a year is 50 percent of the excess of cumulative projected income for the investor over cumulative projected deductions for the investor with respect to the investment as of the close of such year.
- Treas. Reg. §Treas. Reg. §301.6111-1T(f) §301.6111-1T(f)
- Treas. Reg. §Treas. Reg. §301.6111-2 Confidential corporate tax shelters
- Treas. Reg. §Treas. Reg. §301.6111-2(a) In general.
- Treas. Reg. §Treas. Reg. §301.6111-2(b) Transactions structured for avoidance or evasion of Federal income tax—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6111-2(c) Conditions of confidentiality—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6111-2(d) Determination of fees.
- Treas. Reg. §Treas. Reg. §301.6111-2(e) Registration—(1) Time for registering—(i) In general.
- Treas. Reg. §Treas. Reg. §301.6111-2(f) Definition of tax shelter promoter.
- Treas. Reg. §Treas. Reg. §301.6111-2(g) Person required to register—(1) Tax shelter promoters.
- Treas. Reg. §Treas. Reg. §301.6111-2(h) Effective dates.
- Treas. Reg. §Treas. Reg. §301.6111-2(i) In the case of a transaction other than a transaction described in paragraph (b)(2) of this section, the tax shelter promoter (or other person who would be responsible for registration under this section) reasonably determines that there is no reasonable basis under Federal tax law for denial of any significant portion of the expected Federal income tax benefits from the transaction.
- Treas. Reg. §Treas. Reg. §301.6111-2(v) Special rule for controlled entities.
- Treas. Reg. §Treas. Reg. §301.6111-3 Disclosure of reportable transactions
- Treas. Reg. §Treas. Reg. §301.6111-3(a) In general.
- Treas. Reg. §Treas. Reg. §301.6111-3(b) Material advisor—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6111-3(c) Definitions.
- Treas. Reg. §Treas. Reg. §301.6111-3(d) Form and content of material advisor's disclosure statement—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6111-3(e) Time of providing disclosure.
- Treas. Reg. §Treas. Reg. §301.6111-3(f) Designation agreements.
34 Citing Cases
On May 2, 2000, PwC informed the parties involved in the test transactions that the transactions would be registered as confidential corporate tax shelters pursuant to section 6111(d) and applicable regulations and provided the parties with the proposed designation agreement which, upon execution, would appoint PwC as a designated organizer.
On May 2, 2000, PwC informed the parties involved in the test transactions that the transactions would be registered as confidential corporate tax shelters pursuant to section 6111(d) and applicable regulations and provided the parties with the proposed designation agreement which, upon execution, would appoint PwC as a designated organizer.
For example, section 5051 imposes an excise tax on beer, but section 5053 authorizes various exemp- tions "under such regulations * * * as the Secretary may * * * prescribe."6 Section 6111 requires the disclosure ofcertain reportable transactions, but section 6111(c)(2) provides that "[t]he Secretary may prescribe regulations which provide * * * exemptions from the requirements ofthis section." Section 3402(n) provides that withholding shall not be required "ifthere is in effect * * * a withh
ISSIONER OF INTERNAL REVENUE, Respondent ————— Docket Nos. 17038-18L, 17535-18L. Filed February 23, 2026. ————— Between 1999 and 2002, Ps marketed and sold certain tax avoidance strategies to clients without reporting those strategies as required by I.R.C. § 6111. R assessed penalties under I.R.C. § 6707 with respect to Ps. In correspondence with Ps, R offered Ps a meeting with IRS Appeals to dispute their liabilities for the assessed penalties. To circumvent the application of I.R.C. § 6330(c)(
2000 Mr. Goddard $4,053,679 $764,240 LGD 4,202,348 792,268 The IRS assessed pre-AJCA section 6707 penalties against LGD, a partnership and law firm, and its partner Mr. Goddard for failure to timely register tax shelters, as required under pre-AJCA section 6111. The IRS determined that petitioners were involved in developing, marketing, and directing the operation of Short Option Strategies (SOS) and Custom Adjustable Rate Debt Strategy (CARDS) transactions. I. Early History Mr. Goddard earned
ority, and states in part: This notice alerts taxpayers and their representatives that the transaction described in section 2 of this notice is a tax avoidance transaction and identifies this transaction, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) of the Income Tax Regulations (Regulations) and §§ 6111 and 6112 of the Internal Revenue Code (Code).
round all monetary amounts to the nearest dollar. - 3 - [*3] tioner a Form 5701, Notice ofProposed Adjustment, notifying him ofits beliefthat he was a "material advisor" who had failed to make disclosure of "reportable transactions" as required by section 6111. Exam proposed to assert, under section 6707, penalties totaling $1,608,126 for tax years 1998-2001. On December 3, 2014, Exam notified petitioner that a penalty assessment of $1,608,126 would be made ifhe did not pay that amount upon not
Persons who failed to comply with these re- quirements could be liable for penalties under sections 6707 (for failure to comply with section 6111) and 6708 (for failure to comply with section 6112).
Persons who failed to comply with these re- quirements could be liable for penalties under sections 6707 (for failure to comply with section 6111) and 6708 (for failure to comply with section 6112).
Persons who failed to comply with these re- quirements could be liable for penalties under sections 6707 (for failure to comply with section 6111) and 6708 (for failure to comply with section 6112).
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
e - 96 - also alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies certain transactions using trust arrangements involving cash value life insurance policies, and substantially similar transactions, as listed transactions for purposes of § 1.6011-4(b)(2) ofthe Income Tax Regulations and §§ 6111 and 6112 ofthe Internal Revenue Code.
In addition, Edwards & Angell issued Benistar Plan a letter in December 2003 stating that Benistar Plan is not a tax shelter as described in section 6111, or a potentially abusive tax shelter or listed transaction as described in section 301 .6112-1(b)(2), Proced .
In addition, Edwards & Angell issued Benistar Plan a letter in December 2003 stating that Benistar Plan is not a tax shelter as described in section 6111, or a potentially abusive tax shelter or listed transaction as described in section 301 .6112-1(b)(2), Proced .
eason for its enactment.” Merkel v. Commissioner, supra at 468-469; see United States v. Am. Trucking Associations, supra at 543-544. Sec. 6111(d) provides that confidential corporate tax shelters are subject to the tax shelter registration rules of sec. 6111. A confidential corporate tax shelter is a transaction for which, among other things, the tax shelter promoters may receive fees in excess of $100,000. Sec. 6111(d)(1)(C). For purposes of sec. 6111(d), the term “promoter” is defined as a pe