¹TD 9046 (2/28/03).

²TD 9017, 9018 (10/22/02).

³See Mendelson, Bhikha and Emilian, Tax Shelter Temp. Regs. (Parts I and II), 34 The Tax Adviser 86 (February 2003) and 34 The Tax Adviser 142 (March 2003). 

⁴Although virtually unaffected by the prior tax shelter rules, exempt organizations fall under the disclosure and list-maintenance rules in the final regulations. As a result, exempt organizations should take immediate steps to understand the final regulations implications and devise a compliance plan. 

⁵As to listed transactions, the IRS has reserved the right to identify other persons that will be treated as participants.

⁶Ann. 2002-63, IRB 2002-27, 72; see also CC-2003-012. For returns filed after July 1, 2002, the IRS will routinely request all tax-accrual workpapers if the taxpayer (1) failed to disclose a listed transaction; (2) entered into more than one listed transaction, regardless of whether such transactions were disclosed; or (3) reported financial accounting irregularities (e.g., those resulting in earnings restatement) when the return under examination includes tax benefits from a listed transaction. For original returns filed prior to July 1, 2002 and containing tax benefits from an undisclosed listed transaction, the IRS may request tax-accrual workpapers strictly related to such transaction.

⁷The IRSs Large and Mid-Size Business Division recently announced the limited issue focused examination (LIFE) program, containing certain benefits for qualifying taxpayers, including limited scope (i.e., possible waiver of certain administrative requirements, fewer examined issues), shorter time frame (i.e., limited IRS ability to expand the audit) and increased involvement in planning and focus of the examination. 

⁸See the CARE Act of 2003, S. 476, 108th Cong., 1st Sess. (2003).

⁹Report of Investigation of Enron Corporation and Related Entities
 Regarding Federal Tax and Compensation Issues, and Policy
 Recommendations (JCS-3-03, February 2003).

¹⁰An exclusivity agreement is a legally binding contract under which a taxpayer agrees to compensate an advisor for a transaction presented to the taxpayer by such advisor if the taxpayer uses a different advisor to implement the transaction. 

¹¹TD 9011 (7/25/02).

¹²Treasury Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents and Appraisers Before the IRS.

¹³The IRS recently issued an advance notice of proposed rulemaking, REG-125638 (12/19/02), to seek comments on the propriety of contingent fees in other matters before the IRS, such as ruling requests.

¹⁴Rev. Proc. 2003-24, IRB 2003-11, 599.

¹⁵Rev. Proc. 2003-25, IRB 2003-11, 601.