Modification of Actions to Enjoin Certain Conduct Related to Tax Shelters and Reportable Transactions

Before the AJCA, Sec. 7408 authorized civil actions to enjoin any person from promoting abusive tax shelters or aiding or abetting the understatement of tax liability.

New Law

AJCA Section 820, modifying Sec. 7408, expands the current rules to allow an injunction to be sought against a material advisor for failing to (1) fulfill the reporting requirements for reportable and listed transactions and (2) keep investor lists. It also permits injunctions to be sought for violations of any of the rules under Circular 230.

Effective Date

The provision is effective on Oct. 23, 2004.

From Paul Manning, Washington, DC