REPORTABLE TRANSACTION RULES FOR TAX-EXEMPT ENTITIES ISSUED

Thursday, July 5, 2007 - 7:30am

The Internal Revenue Service (IRS) today issued guidance effective July 6 regarding how, under Internal Revenue Code (IRC) Section 4965, excise taxes apply in prohibited tax shelter transactions involving tax-exempt third parties. In Treasury Decision (TD) 9334, the IRS sets final and temporary rules relating to the requirement of a return to accompany payment of excise taxes. TD 9335 provides temporary rules regarding the form, manner and timing of disclosure obligations with respect to prohibited tax shelter transactions involving tax-exempt third parties. The IRS also released a notice of proposed rulemaking relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties.