26 U.S.C. § 6111

Disclosure of reportable transactions

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(a) In generalEach material advisor with respect to any reportable transaction shall make a return (in such form as the Secretary may prescribe) setting forth—(1) information identifying and describing the transaction,(2) information describing any potential tax benefits expected to result from the transaction, and(3) such other information as the Secretary may prescribe.Such return shall be filed not later than the date specified by the Secretary.(b) DefinitionsFor purposes of this section:(1) Material advisor(A) In generalThe term “material advisor” means any person—(i) who provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction, and(ii) who directly or indirectly derives gross income in excess of the threshold amount (or such other amount as may be prescribed by the Secretary) for such aid, assistance, or advice.(B) Threshold amountFor purposes of subparagraph (A), the threshold amount is—(i) $50,000 in the case of a reportable transaction substantially all of the tax benefits from which are provided to natural persons, and(ii) $250,000 in any other case.(2) Reportable transaction

The term “reportable transaction” has the meaning given to such term by section 6707A(c).

(c) RegulationsThe Secretary may prescribe regulations which provide—(1) that only 1 person shall be required to meet the requirements of subsection (a) in cases in which 2 or more persons would otherwise be required to meet such requirements,(2) exemptions from the requirements of this section, and(3) such rules as may be necessary or appropriate to carry out the purposes of this section.(Added Pub. L. 98–369, div. A, title I, § 141(a), July 18, 1984, 98 Stat. 677; amended Pub. L. 99–514, title II, § 201(d)(13), title XV, § 1531(a), title XVIII, § 1899A(54), Oct. 22, 1986, 100 Stat. 2142, 2749, 2961; Pub. L. 105–34, title X, § 1028(a), Aug. 5, 1997, 111 Stat. 926; Pub. L. 108–357, title VIII, § 815(a), Oct. 22, 2004, 118 Stat. 1581; Pub. L. 109–135, title IV, § 412(zz), Dec. 21, 2005, 119 Stat. 2641.)Editorial NotesPrior Provisions

A prior section 6111 was renumbered 6116 of this title.

Amendments

2005—Subsec. (b)(1)(A)(ii). Pub. L. 109–135 substituted “aid, assistance, or advice” for “advice or assistance”.

2004—Pub. L. 108–357 amended section catchline and text generally, substituting provisions relating to disclosure of reportable transactions for provisions relating to registration of tax shelters and inclusion of identification numbers on returns.

1997—Subsecs. (d) to (f). Pub. L. 105–34 added subsec. (d) and redesignated former subsecs. (d) and (e) as (e) and (f), respectively.

1986—Subsec. (c)(2)(A). Pub. L. 99–514, § 1531(a), substituted “350 percent” for “200 percent”.

Subsec. (c)(3)(B)(ii). Pub. L. 99–514, § 201(d)(13), substituted “section 465(b)(3)(C)” for “section 168(e)(4)”.

Subsec. (d)(1)(B). Pub. L. 99–514, § 1899A(54), substituted “subparagraph” for “subpargraph”.

Statutory Notes and Related SubsidiariesEffective Date of 2004 Amendment

Pub. L. 108–357, title VIII, § 815(c), Oct. 22, 2004, 118 Stat. 1583, provided that: “The amendments made by this section [amending this section and sections 6112 and 6708 of this title] shall apply to transactions with respect to which material aid, assistance, or advice referred to in section 6111(b)(1)(A)(i) of the Internal Revenue Code of 1986 (as added by this section) is provided after the date of the enactment of this Act [Oct. 22, 2004].”

Effective Date of 1997 Amendment

Pub. L. 105–34, title X, § 1028(e), Aug. 5, 1997, 111 Stat. 928, provided that:“(1)In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 6662 and 6707 of this title] shall apply to any tax shelter (as defined in section 6111(d) of the Internal Revenue Code of 1986, as amended by this section) interests in which are offered to potential participants after the Secretary of the Treasury prescribes guidance with respect to meeting requirements added by such amendments.“(2)Modifications to substantial understatement penalty.—The amendments made by subsection (c) [amending section 6662 of this title] shall apply to items with respect to transactions entered into after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1986 Amendment

Amendment by section 201(d)(13) of Pub. L. 99–514 applicable to property placed in service after Dec. 31, 1986, in taxable years ending after such date, with exceptions, see sections 203 and 204 of Pub. L. 99–514, set out as a note under section 168 of this title.

Amendment by section 201(d)(13) of Pub. L. 99–514 not applicable to any property placed in service before Jan. 1, 1994, if such property placed in service as part of specified rehabilitations, and not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of Pub. L. 99–514, set out as a note under section 46 of this title.

Pub. L. 99–514, title XV, § 1531(b), Oct. 22, 1986, 100 Stat. 2749, provided that: “The amendment made by this section [amending this section] shall apply to any tax shelter (within the meaning of section 6111 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as amended by this section) interests in which are first offered for sale after December 31, 1986.”

Effective Date

Pub. L. 98–369, div. A, title I, § 141(d), July 18, 1984, 98 Stat. 680, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:“(1)In general.—The amendments made by this section [enacting this section and section 6707 of this title and renumbering former section 6111 as section 6112 of this title] shall apply to any tax shelter (within the meaning of section 6111 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this section) any interest in which is first sold to any investor after August 31, 1984.“(2)Substantial investment test.—For purposes of determining whether any investment is a tax shelter by reason of section 6111(c)(1)(B)(iii) of such Code (as added by this section), only offers for sale after August 31, 1984, shall be taken into account.“(3)Furnishing of shelter identification number for interests sold before september 1, 1984.—With respect to interests sold before September 1, 1984, any liability to act under paragraph (1) of section 6111(b) of such Code (as added by this section) which would (but for this sentence) arise before such date shall be deemed to arise on December 31, 1984.”

Notes of Decisions

Cited in 23 cases (4 in the last 5 years), 1994–2026 · leading case: United States v. BDO Seidman, LLP, 492 F.3d 806 (7th Cir. 2007).

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United States v. BDO Seidman, LLP, 492 F.3d 806 (7th Cir. 2007). · cites it 5× “See 26 U.S.C. §§ 6111 (a), 6112(a) (2000); BDO II, 337 F.”

William Canada, Jr. v. USA (IRS), 950 F.3d 299 (5th Cir. 2020). · cites it 5× “§§ 6707 and 6108 for failing to report tax shelter transactions as required by 26 U.S.C. § 6111 . 3 In April 2015, the IRS notified Canada of its intention to impose penalties as high as $49,108,452 against him under 26 U.”

Diversified Grp. Inc. v. United States, 841 F.3d 975 (Fed. Cir. 2016). · cites it 4× “§ 6707 for failure to comply with tax shelter registration requirements under 26 U.S.C. § 6111 . The United States Court of Federal Claims (“Claims Court”) held that it lacked jurisdiction over the case because Appellants did not comply with the full payment rule.”

United States v. Canada (In re Canada), 574 B.R. 620 (N.D. Tex. 2017). · cites it 18× “ANALYSIS This bankruptcy appeal essentially turns on two questions which the IRS avers the bankruptcy court answered incorrectly: (1) whether the Heritage Transactions were “investments” constituting “tax shelters” within the meaning of 26 U.S.C. § 6111 , for which registration…”

Haber v. United States, 823 F.3d 746 (2d Cir. 2016). · cites it 3× “§ 6707 , 1 in connection with their alleged failure to register tax shelters in violation of 26 U.S.C. § 6111 . 2 Haber and DGI paid $18,370 and $15,500, respectively, toward that assessment, and concurrently filed refund claims with the IRS.”

Diversified Grp. Inc. v. United States, 123 Fed. Cl. 442 (Fed. Cl. 2015). · cites it 8× “RCFC 12(b)(1); Subject Matter Jurisdiction; Tax Shelter; Full Payment Rule; Penalty; 26 U.S.C. § 6111 ; 26 U.S.C. § 6707 ; Aggregate; Divisibility; Abatement; Son-of-BOSS; Option Partnership Strategy; Financial Derivatives Investment Strategy OPINION AND ORDER SWEENEY, Judge…”

Larson v. United States, 888 F.3d 578 (2d Cir. 2018). · cites it 2× “" 26 U.S.C. § 6111 (a) (1997) (current version at 26 U.”

United States v. BDO Seidman, 337 F.3d 802 (7th Cir. 2003). · cites it 5× “See 26 U.S.C. §§ 6111 , 6112. The clients sought to intervene to assert a confidentiality privilege regarding certain documents that BDO intended to produce in response to those summonses.”

Nevada Partners Fund, LLC Ex Rel. Sapphire II, Inc. v. United States, 714 F. Supp. 2d 598 (S.D. Miss. 2010). · cites it 3× “On October 12, 2001, John Beard, apparently concerned that FOCus might be called into question by the IRS, sent an email to Donna Bruce of KPMG asking why the FOCus strategy through Bricolage was not subject to IRS Notice 2000-44 and why FOCus was not subject to being reported…”

Nevada Partners Fund, L.L.C. v. United States, 720 F.3d 594 (5th Cir. 2013). · cites it 2× “See 26 U.S.C. § 6111 (a), (c) (2000). 16 . This step was a deviation from the prearranged FOCus scheme.”

Noffke v. United States, 129 Fed. Cl. 341 (Fed. Cl. 2016). “§ 6707 , for the failure to register a tax shelter under 26 U.S.C. § 6111 , and did not address 26 U.”

In Re Grassgreen, 172 B.R. 383 (Bankr. M.D. Fla. 1994). “*388 § 6653(b) and substantial understatement pursuant to 26 U.S.C. § 6111 . The interest included in claim 28 for 1985 was manually assessed on December 23, 1991, and was manually assessed on January 27, 1992, for 1986 and 1987.”

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