Td 9352

material advisor acts as a material advisor
as defined in paragraph (b) of this section.
The reportable transaction number must
be provided at the time the transaction
is entered into, or, if the transaction is
entered into prior to the material advisor receiving the reportable transaction
number, within 60 calendar days from the
date the reportable transaction number is
mailed to the material advisor.
(e) Time of providing disclosure. The
material advisor’s disclosure statement for
a reportable transaction must be filed with
the Office of Tax Shelter Analysis (OTSA)
by the last day of the month that follows
the end of the calendar quarter in which
the advisor became a material advisor with
respect to the reportable transaction or in
which the circumstances necessitating an
amended disclosure statement occur. The
disclosure statement must be sent to OTSA
at the address provided in the instructions
for Form 8918 (or a successor form).
(f) Designation agreements. If more
than one material advisor is required to disclose a reportable transaction under this
section, the material advisors may designate by written agreement a single material advisor to disclose the transaction. The
transaction must be disclosed by the last
day of the month following the end of the
calendar quarter that includes the earliest
date on which a material advisor who is a
party to the agreement became a material
advisor with respect to the transaction as
described in paragraph (b)(4) of this section. The designation of one material advisor to disclose the transaction does not
relieve the other material advisors of their
obligation to disclose the transaction to the
IRS in accordance with this section, if the
designated material advisor fails to disclose the transaction to the IRS in a timely
manner.
(g) Protective disclosures. If a potential material advisor is uncertain whether
a transaction must be disclosed under this
section, the advisor may disclose the transaction in accordance with the requirements
of this section and comply with all the
provisions of this section, and indicate on
the disclosure statement that the disclosure
statement is being filed on a protective basis. The IRS will not treat disclosure statements filed on a protective basis any differently than other disclosure statements filed
under this section. For a protective disclo-

September 17, 2007

sure to be effective, the advisor must comply with the regulations under this section
and §301.6112–1 by providing to the IRS
all information requested by the IRS under
these sections.
(h) Rulings. If a potential material advisor requests a ruling as to whether a specific transaction is a reportable transaction
on or before the date that disclosure would
otherwise be required under this section,
the Commissioner in his discretion may
determine that the submission satisfies the
disclosure rules under this section for that
transaction if the request fully discloses
all relevant facts relating to the transaction
which would otherwise be required to be
disclosed under this section. The potential obligation of the person to disclose the
transaction under this section (or to maintain or furnish the list under §301.6112–1)
will not be suspended during the period
that the ruling request is pending.
(i) Effective/applicability date—(1) In
general. This section applies to transactions with respect to which a material
advisor makes a tax statement on or after
August 3, 2007. However, this section applies to transactions of interest entered into
on or after November 2, 2006 with respect
to which a material advisor makes a tax
statement under §301.6111–3 on or after
November 2, 2006. Paragraph (h) of this
section applies to ruling requests received
on or after November 1, 2006. Otherwise,
the rules that apply with respect to transactions entered into before August 3, 2007
are contained in Notice 2004–80, 2004–2
C.B. 963; Notice 2005–17, 2005–1 C.B.
606; and Notice 2005–22, 2005–1 C.B.
756 (see §601.601(d)(2)(ii)(b) in effect
prior to August 3, 2007.
(2) [Reserved].

(Filed by the Office of the Federal Register on July 31, 2007,
11:22 a.m., and published in the issue of the Federal Register
for August 3, 2007, F.R. 43157)

Section 6112.—Material
Advisors of Reportable
Transactions Must Keep
Lists of Advisees, etc.
26 CFR 301.6112–1: Material advisors of reportable
transactions must keep lists of advisees, etc.

T.D. 9352
DEPARTMENT OF
THE TREASURY
Internal Revenue Service
26 CFR Part 301
AJCA Modifications to the
Section 6112 Regulations
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final
regulations under section 6112 of the Internal Revenue Code that provide the rules relating to the obligation of material advisors
to prepare and maintain lists with respect
to reportable transactions. These regulations affect material advisors responsible
for keeping lists under section 6112.
DATES: Effective Date: These regulations
are effective August 3, 2007.
FOR
FURTHER
INFORMATION
CONTACT:
Charles
D.
Wien,
Michael H. Beker, or Tolsun N. Waddle,
202–622–3070; (not a toll-free number).

§301.6111–3T [Removed]

SUPPLEMENTARY INFORMATION:

Par. 3. Section 301.6111–3T is removed.

Paperwork Reduction Act

Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
Approved July 25, 2007.
Eric Solomon,
Assistant Secretary of
the Treasury (Tax Policy).

621

The collections of information contained in this final regulation have been
reviewed and approved by the Office
of Management and Budget in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1686. Responses to these collections of information are mandatory. An
agency may not conduct or sponsor, and
a person is not required to respond to, a

2007–38 I.R.B.

collection of information unless the collection of information displays a valid OMB
control number assigned by the Office of
Management and Budget.
The estimated annual burden per
recordkeeper for the collection of information in §301.6112–1 is 100 hours and
the estimated number of recordkeepers is
500.
Comments concerning the accuracy
of these burden estimates and suggestions for reducing these burdens should
be sent to Internal Revenue Service,
Attn: IRS Reports Clearance Officer,
SE:W:CAR:MP:T:T:SP, Washington, DC
20224, and to the Office of Management and Budget, Attn: Desk Officer
for the Department of Treasury, Office
of Information and Regulatory Affairs,
Washington, DC 20503.
Books and records relating to these collections of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax
information are confidential, as required
by 26 U.S.C. 6103.

the Procedure and Administration Regulations.
On November 1, 2006, the IRS and
Treasury Department issued a notice
of proposed rulemaking and temporary and final regulations under sections
6011, 6111, and 6112 (REG–103038–05,
2006–49 I.R.B. 1049, REG–103039–05,
2006–49 I.R.B. 1057, REG–103043–05,
2006–49 I.R.B 1063, T.D. 9295, 2006–49
I.R.B. 1030) (the November 2006 regulations). The November 2006 regulations
were published in the Federal Register
(71 FR 64488, 71 FR 64496, 71 FR 64501,
71 FR 64458) on November 2, 2006.
The IRS and Treasury Department received written public comments responding to the proposed regulations and held
a public hearing regarding the proposed
rules on March 20, 2007. After consideration of the comments received and comments made at the hearing, the proposed
regulations are adopted as revised by this
Treasury decision. These final regulations
generally retain the provisions of the proposed regulations but include some modifications based on recommendations in the
public comments.

Background
This document contains final regulations that amend 26 CFR part 301 by
amending the rules relating to the list
maintenance requirements of material
advisors with respect to reportable transactions under section 6112.
The American Jobs Creation Act of
2004, Public Law 108–357 (118 Stat.
1418), (AJCA) was enacted on October 22,
2004. Section 815 of the AJCA amended
section 6112 to provide that each material advisor (as defined in section 6111, as
amended by the AJCA) with respect to any
reportable transaction is required to maintain a list (in such manner as the Secretary
may by regulations prescribe) identifying
each person with respect to whom the
advisor acted as a material advisor with
respect to the transaction, and containing
other information as the Secretary may
by regulations require. Section 815 of the
AJCA is effective for transactions with
respect to which material aid, assistance,
or advice is provided after October 22,
2004. Prior to the amendments to section
6111 made by the AJCA, the definition of
material advisor was in §301.6112–1 of

2007–38 I.R.B.

Summary of Comments and
Explanation of Provisions

maintenance provisions of section 6112
and the regulations thereunder.
Several commentators recommended
that the proposed regulations should provide the IRS with flexibility to determine,
based on the amount of information required, a production schedule that will
be sufficient to avoid the imposition of
penalties. Two commentators suggested
providing a phased disclosure procedure.
One commentator recommended that the
20 business days begin after the advisor
had an adequate opportunity to gather the
required information. Another commentator recommended amending the proposed
regulations to provide a substantial compliance standard.
The IRS and Treasury Department believe that providing the IRS the ability to
determine an alternative production schedule will benefit both taxpayers and the IRS.
These final regulations remove the language regarding the period for furnishing
a list or the components of the list to the
IRS because that period will be addressed
in forthcoming published guidance under
section 6708. In addition, an alternative
schedule for furnishing the list or the components of the list will be addressed in published guidance under section 6708.
Special Analyses

Furnishing of Lists
The proposed regulations provided that
each material advisor must prepare and
maintain a list for each reportable transaction. The proposed regulations also
provided that each list must include three
components: an itemized statement, a
description of the transaction, and documents. Further, the proposed regulations
provided that each material advisor responsible for maintaining a list must, upon
written request by the IRS, make each
component of the list available to the IRS
by furnishing each component of the list
to the IRS within 20 business days from
the day on which the request is provided.
The proposed regulations stated that each
component of the list must be furnished
to the IRS in a form that enables the IRS
to determine without undue delay or difficulty the information required to be on the
list. If any component of the list is not in
such form, the material advisor will not be
considered to have complied with the list

622

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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations. It is
hereby certified that the collection of information in these regulations will not have a
significant economic impact on a substantial number of small entities. This certification is based upon the fact that most
of the information is already required to
be reported under the current regulations;
the clarifications and new information required by the final regulations add little
or no new burden to the existing requirements. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the
Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel

September 17, 2007

for Advocacy of the Small Business Administration for comment on its impact on
small business.
Drafting Information
The principal authors of these
regulations are Charles D. Wien,
Michael H. Beker, and Tolsun N. Waddle,
Office of the Associate Chief Counsel
(Passthroughs and Special Industries).
However, other personnel from the IRS
and Treasury Department participated in
their development.
*****
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 301 is
amended as follows:
PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation for
part 301 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 301.6112–1 is revised
to read as follows:
§301.6112–1 Material advisors of
reportable transactions must keep lists of
advisees, etc.
(a) In general. Each material advisor,
as defined in §301.6111–3(b), with respect
to any reportable transaction, as defined
in §1.6011–4(b) of this chapter, shall prepare and maintain a list in accordance with
paragraph (b) of this section and shall furnish such list to the Internal Revenue Service (IRS) in accordance with paragraph
(e) of this section.
(b) Preparation and maintenance of
lists—(1) In general. A separate list must
be prepared and maintained for each reportable transaction. However, one list
must be maintained for substantially similar transactions. A list must be maintained
in a form that enables the IRS to determine
without undue delay or difficulty the information required in paragraph (b)(3) of
this section. The Commissioner in his discretion may provide in published guidance
a form or method for maintaining and/or
furnishing the list.

September 17, 2007

(2) Persons required to be included on
lists. A material advisor is required to
maintain a list identifying each person with
respect to whom the advisor acted as a material advisor with respect to the reportable
transaction. However, a material advisor is
not required to identify a person on the list
if the person entered into a listed transaction or a transaction of interest more than 6
years before the transaction was identified
in published guidance as a listed transaction or a transaction of interest.
(3) Contents. Each list must include the
three components described in paragraph
(b)(3)(i), (ii), and (iii) of this section.
(i) Statement. An itemized statement
containing the following information—
(A) The name of each reportable transaction, the citation to the published guidance number identifying the transaction if
the transaction is a listed transaction or a
transaction of interest, and the reportable
transaction number obtained under section
6111;
(B) The name, address, and TIN of each
person required to be included on the list;
(C) The date on which each person required to be included on the list entered
into each reportable transaction, if known
by the material advisor;
(D) The amount invested in each reportable transaction by each person required to be included on the list, if known
by the material advisor;
(E) A summary or schedule of the tax
treatment that each person is intended or
expected to derive from participation in
each reportable transaction; and
(F) The name of each other material
advisor to the transaction, if known by the
material advisor.
(ii) Description of the transaction. A
detailed description of each reportable
transaction that describes both the tax
structure of the transaction and the purported tax treatment of the transaction.
(iii) Documents. The following documents—
(A) A copy of any designation agreement (as described in paragraph (f) of this
section) to which the material advisor is a
party; and
(B) Copies of any additional written
materials, including tax analyses or opinions, relating to each reportable transaction
that are material to an understanding of the
purported tax treatment or tax structure of
the transaction that have been shown or

623

provided to any person who acquired or
may acquire an interest in the transactions,
or to their representatives, tax advisors, or
agents, by the material advisor or any related party or agent of the material advisor.
However, a material advisor is not required
to retain earlier drafts of a document provided the material advisor retains a copy
of the final document (or, if there is no final document, the most recent draft of the
document) and the final document (or most
recent draft) contains all the information
in the earlier drafts of such document that
is material to an understanding of the purported tax treatment or the tax structure of
the transaction.
(c) Definitions. For purposes of this
section, the following terms are defined as:
(1) Material advisor. The term material
advisor is defined in §301.6111–3(b).
(2) Reportable transaction.
The
term reportable transaction is defined
in §1.6011–4(b)(1) of this chapter.
(3) Listed transaction. The term listed
transaction is defined in §1.6011–4(b)(2)
of this chapter. See also §§20.6011–4(a),
25.6011–4(a), 31.6011–4(a), 53.6011–
4(a), 54.6011–4(a), or 56.6011–4(a) of
this chapter.
(4) Substantially similar. The term
substantially similar is defined in
§1.6011–4(c)(4) of this chapter.
(5) Person. The term person is defined
in §301.6111–3(c)(4).
(6) Related party. A person is a related party with respect to another person
if such person bears a relationship to such
other person described in section 267(b) or
707(b).
(7) Tax. The term tax is defined in
§301.6111–3(c)(6).
(8) Tax benefit. The term tax benefit is
defined in §301.6111–3(c)(7).
(9) Tax return. The term tax return is
defined in §301.6111–3(c)(8).
(10) Tax structure. The term tax structure is defined in §301.6111–3(c)(9).
(11) Tax treatment. The term tax treatment is defined in §301.6111–3(c)(10).
(12) Transaction of interest.
The
term transaction of interest is defined
in §1.6011–4(b)(6) of this chapter. See
also §§20.6011–4(a),
25.6011–4(a),
31.6011–4(a), 53.6011–4(a), 54.6011–
4(a), or 56.6011–4(a) of this chapter.
(d) Retention of lists. Each material
advisor must maintain each component of
the list described in paragraph (b)(3) of

2007–38 I.R.B.

this section in a readily accessible form
for seven years following the earlier of
the date on which the material advisor last
made a tax statement relating to the transaction, or the date the transaction was last
entered into, if known. If the material advisor required to prepare, maintain, and
furnish the list is a corporation, partnership, or other entity (entity) that has dissolved or liquidated before completion of
the seven-year period, the person responsible under state law for winding up the
affairs of the entity must prepare, maintain and furnish each component of the list
on behalf of the entity, unless the entity
submits the list to the Office of Tax Shelter Analysis (OTSA) within 60 days after
the dissolution or liquidation. If state law
does not specify any person as responsible for winding up the affairs, then each of
the directors of the corporation, the general
partners of the partnership, or the trustees,
owners, or members of the entity are responsible for preparing, maintaining and
furnishing each component of the list on
behalf of the entity, unless the entity submits the list to the OTSA within 60 days
after the dissolution or liquidation. The responsible person must also provide notice
to OTSA of such dissolution or liquidation
within 60 days after the dissolution or liquidation. The list and the notice provided
to OTSA must be sent to: Internal Revenue Service, OTSA Mail Stop 4915, 1973
North Rulon White Blvd., Ogden, Utah
84404, or to such other address as provided
by the Commissioner.
(e) Furnishing of lists—(1) In general. Each material advisor responsible
for maintaining a list must, upon written
request by the IRS, make each component of the list described in paragraph
(b)(3) of this section available to the IRS.
Each component of the list must be furnished to the IRS in a form that enables
the IRS to determine without undue delay
or difficulty the information required in
paragraph (b)(3) of this section. If any
component of the list is not in a form
that enables the IRS to determine without
undue delay or difficulty the information required in paragraph (b)(3) of this
section, the material advisor will not be
considered to have complied with the list
maintenance provisions in section 6112
and this section. A material advisor must
make the list or each component of the
list available to the IRS within the period

2007–38 I.R.B.

prescribed in section 6708 or published
guidance relating to section 6708.
(2) Claims of privilege. Each material advisor who is required to maintain a
list with respect to a reportable transaction,
must still maintain the list pursuant to the
requirements of this section even if a person asserts a claim of privilege with respect to the information specified in paragraph (b)(3)(iii)(B) of this section.
(f) Designation agreements. If more
than one material advisor is required to
maintain a list of persons for a reportable
transaction, in accordance with paragraph
(b) of this section, the material advisors
may designate by written agreement a single material advisor to maintain the list or a
portion of the list. The designation of one
material advisor to maintain the list does
not relieve the other material advisors from
their obligation to furnish the list to the IRS
in accordance with paragraph (e)(1) of this
section, if the designated material advisor
fails to furnish the list to the IRS in a timely
manner. A material advisor is not relieved
from the requirement of this section because a material advisor is unable to obtain
the list from any designated material advisor, any designated material advisor did
not maintain a list, or the list maintained
by any designated material advisor is not
complete.
(g) Effective/applicability date. In general, this section applies to transactions
with respect to which a material advisor
makes a tax statement under §301.6111–3
on or after August 3, 2007. However, this
section applies to transactions of interest
entered into on or after November 2, 2006,
with respect to which a material advisor
makes a tax statement under §301.6111–3
on or after November 2, 2006. Otherwise,
the rules that apply before August 3, 2007
are contained in §301.6112–1 in effect
prior to August 3, 2007 (see 26 CFR part
301 revised as of April 1, 2007, and see
also Notice 2004–80, 2004–2 C.B. 963;
Notice 2005–17, 2005–1 C.B. 606; and
Notice 2005–22, 2005–1 C.B. 756 (see
§601.601(d)(2)(ii)(b) of this chapter).
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
Approved July 25, 2007.

624

Eric Solomon,
Assistant Secretary of
the Treasury (Tax Policy).
(Filed by the Office of the Federal Register on July 31, 2007,
11:22 a.m., and published in the issue of the Federal Register
for August 3, 2007, 72 F.R. 43154)

Section 6655.—Failure
by Corporation to Pay
Estimated Income Tax
26 CFR 1.6655–1: Addition to the tax in the case of
a corporation.

T.D. 9347
DEPARTMENT OF
THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 301, and 602
Corporate Estimated Tax
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final
regulations that provide guidance to corporations with respect to estimated tax requirements. These final regulations generally affect corporate taxpayers who are
required to make estimated tax payments.
These final regulations reflect changes to
the law since 1984. This document also
removes the section 6154 regulations.
DATES: Effective date: These regulations
are effective on August 7, 2007.
Applicability date: These regulations
apply to tax years beginning after September 6, 2007.
FOR
FURTHER
INFORMATION
CONTACT: Timothy Sheppard, at (202)
622–4910 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to the Income Tax Regulations (26 CFR
Part 1), the Procedure and Administration
Regulations (26 CFR Part 301), and the
OMB Control Numbers under the Paperwork Reduction Act Regulations (26 CFR
Part 602) relating to corporate estimated

September 17, 2007