On October 20, 2017, the U.S. Treasury Department and the Internal Revenue Service (IRS) published a notice in the Federal Register requesting comments on Form 13976 (Itemized Statement Component of Advisee List), which provides material advisors a format for preparing and maintaining an itemized statement with respect to a reportable transaction. The IRS requested that comments be submitted by December 19, 2017. See BEPS Action 12.
Under Internal Revenue Code (IRC) section 6112(a), material advisors with respect to any reportable transaction must (whether or not required to file a return under section 6111 with respect to such transaction) maintain a list identifying each person with respect to whom such advisor acted as a material advisor with respect to such transaction. Any person who is required to maintain this list shall retain information, which is required to be included on the list, for seven years.
Material advisors are persons who provide material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out reportable transactions, and who directly or indirectly derive gross income in excess of a threshold amount ($50,000 for reportable transactions where substantially all of the tax benefits are provided to natural persons, and $250,000 in other cases). See section 6111(b)(1). Reportable transactions include transactions where information is required to be included with a return or statement since they have a potential for tax avoidance or evasion. See section 6707A(c)(1).
Treas. Reg. section 1.6011-4(b) lists the following types of reportable transactions:
- Listed transactions.
- Confidential transactions.
- Transactions with contractual protection.
- Loss transactions.
- Transactions of interest.
Material advisors to any reportable transaction must file Form 8918 (Material Advisor Disclosure Statement) to disclose certain information about the reportable transaction.