Listed Transactions Reporting: Conservation Easements, Form 8886 and the IRS Audit Initiative

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, May 28, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will update tax practitioners and taxpayers on the latest developments for reportable transactions. Reportable transactions include five types of transactions, most notably, listed transactions and transactions of interest (TOI). Accurately reporting these, and clients participating in these, has been and continues to be an itchy area for tax practitioners. The panel will clarify what transactions qualify or may qualify for this troublesome designation, explain how to report and disclose these transactions on the income tax return, and provide updates on the current status of the IRS audit initiative in this area.

Description

The IRS definition of a listed transaction is worrisome enough:

"Listed transactions are the same as, or substantially similar to, one of the types of transactions that the IRS has determined to be a tax avoidance transaction and identified by notice, regulation, or other form of published guidance as a listed transaction."

More worrisome is having a client participate in one.

The IRS lists, in chronological order, 36 listed transactions on its website. The most familiar of these is the syndicated conservation easement. Significantly lower in numbers are transactions of interest which the IRS website describes as "a transaction that has the potential for tax avoidance or evasion …." Currently, TOIs number six and include certain micro-captive insurance transactions.

The failure to disclose penalties for reportable transactions under IRC Section 6707A are startling. They are 75% of the tax savings not to exceed $10,000 for natural persons and $50,000 for all others. For listed transactions, the amounts rise to $100,000 and $200,000 respectively. Additionally, Section 6501(c)(10) suspends the statute of limitations when a listed transaction is not reported.

Not too long ago, practitioners scrambled to complete Forms 8886, Reportable Transaction Disclosure Statement, many for the first time, for these transactions to meet the extended deadline and avoid penalties.

On Sept. 10, 2018, the IRS added five Large Business and International Division compliance campaigns to its list, including syndicated conservation easements. This announcement came about eight months after the IRS Audit Techniques Guide for Conservation Easements was updated and 18 months after syndicated conservation easements were identified as listed transactions. Audits of conservation easements had already begun before these dates.

Listen as our panel of experts assists you in recognizing, disclosing and reporting these thorny transactions.

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Outline

  1. Categories and definitions of reportable transactions
  2. Common reportable transactions
    1. Conservation easements
    2. Micro-Captive transactions
  3. Penalties related to reportable transactions
  4. Status of IRS audit initiative

Benefits

The panel will review these and other key issues:

  • Recognizing common reportable transactions
  • Properly disclosing and reporting reportable transactions
  • Preparation of Form 8886, Reportable Transaction Disclosure Statement
  • Avoiding penalties for nondisclosure
  • The status of the IRS compliance campaigns

Faculty

Bunting, Kimberly
Kimberly S. Bunting

Founder
Bunting Legal Group

Ms. Bunting focuses her practice on corporate and complex real estate transactions, including acquisitions,...  |  Read More

Hoard, Vivian
Vivian D. Hoard

Partner
Taylor English Duma

Ms. Hoard helps solve complex tax controversy issues for both individual and business clients. By focusing her practice...  |  Read More

Kuhn, Nancy
Nancy Ortmeyer Kuhn

Director
Jackson & Campbell

Ms. Kuhn specializes in Federal and state tax matters and is the Chair of  the firm's Tax Group. She has...  |  Read More

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