FROM THE OFFICE OF PUBLIC AFFAIRS

Today the Treasury Department and the IRS issued a notice amending the effective date for the revised taxpayer disclosure and promoter list maintenance regulations issued in October 2002.  The amended effective date will reduce taxpayer burden and permit Treasury and the IRS to clarify these regulations before they must be applied to ensure that they focus on the information needed to combat abusive tax avoidance transactions.

"Those who engage in or promote abusive transactions cannot be allowed to hide these transactions from scrutiny.  At the same time, the requirements to disclose transactions and maintain lists of customers must be as clear and as administrable as possible.  Requiring disclosure unnecessarily is burdensome to taxpayers and the IRS and will detract from the usefulness of the rules to the IRS' pursuit of potentially abusive transactions,” stated Treasury Assistant Secretary for Tax Policy Pam Olson.

Treasury and the IRS are considering clarifications of the types of transactions that must be disclosed by taxpayers to the IRS.  Taxpayers will be able to rely on these new definitions, or the existing definitions, for the period prior to when the new rules are issued in February.  Further, the list maintenance rules issued in October 2002 will not be effective until they are finalized in February.  This delayed effective date, however, will not apply to designated tax avoidance transactions or to transactions that promoters must register with the IRS.

The text of the notice is attached.