IRS Identifies "Tax-Avoidance" Transactions.

• Author: Fiore, Nicholas J.

Transactions that are the same as or substantially similar to transactions described in the list below have been determined by the IRS to be tax-avoidance transactions for purposes of Temp Regs. Secs. 1.6011-4T(b)(2) and 301.6111-2T(b)(2). As a result, corporate taxpayers may need to disclose their participation in these listed transactions as prescribed in Temp. Regs. Sec. 1.6011-4T, and promoters (or other persons responsible for registering tax shelter transactions) may need to register such transactions under Temp. Regs. Sec. 301.6111-2T. In addition, promoters must maintain lists of investors for these listed transactions (pursuant to Temp. Regs. Sec. 301.6112-1T):

1. Rev. Rul. 90-105 (transactions in which taxpayers claim deductions for contributions to a qualified cash or deferred arrangement or matching contributions to a defined contribution plan, when the contributions are attributable to compensation earned by plan participants after the end of the tax year);

2. Notice 95-34 (certain trust arrangements purported to qualify as multiple employer welfare benefit funds exempt from the limits of Secs. 419 and 419A);

3. Notice 95-53 (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 (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, 201 F3d 505 (DC Cir. 2000), and ACM Partnership, 157 F3d 231 (3d Cir. 1998) (transactions...