³²TD 9017 and 9018 (both dated 10/22/02).

³³TD 8875 and REG-103736-00 (both dated 2/28/00).

³⁴TD 8876 and REG-110311-98 (both dated 2/28/00).

³⁵See the preamble to TD 9017, note 32 supra.

³⁶Notice 2003-11, IRB 2003-6.

³⁷See the preamble to TD 9018, note 32 supra.

³⁸During December 2002, the IRS released on its website (www.irs.gov) an advance proof copy of Form 8886, Reportable Transaction Disclosure Statement. Taxpayer information required on the form includes the name, address and taxpayer identification number (TIN). Required information as to the reportable transaction includes: transaction name and registration number (if any); transaction type; identification of a substantially similar listed transaction (if any); number of transactions; name and TIN of any investment conduits; affirmation of certain increases in asset basis (if any); name, contact information and fees paid to promoters and tax advisers as to the transaction; principal facts surrounding the transaction; expected tax results; and estimated tax benefits.

³⁹Post-transaction advice may trigger the listing requirement, because the temporary regulations require a material advisor to list a person if he or she knows (or has reason to know) that the person or any related party participated in or will participate in a reportable transaction. If material advisor includes persons making a statement about the transaction after it has been consummated, who will be able to render an opinion (for penalty relief purposes) to the taxpayer, as contemplated in the proposed tax shelter legislation?

⁴⁰In contrast to the controversial document retention requirements for material advisors, Temp. Regs. Sec. 1.6011-4T(g) requires taxpayers to retain a copy of all material documents and records for a reportable transaction until the expiration of the statute of limitations for the final tax year in which disclosure of the transaction was required. Such documents include those material to understanding the facts of the transaction, the expected tax treatment of the transaction or the taxpayers decision to participate in the transaction. This document retention rule is also difficult to comply with and perhaps impossible for newly designated listed transactions that can retroactively relate to transactions entered into after Feb. 27, 2000.

⁴¹See Lipton, New Tax Shelter Disclosure And Listing Regulations Promise Headaches For Everyone, 98 J. of Taxn 5 (January 2003).

⁴²See Comments submitted May 22, 2002, by the NYSBA to Pamela F. Olson and Charles O. Rossotti (hereinafter, NYSBA Comments) on the March 2002 Treasury Proposals, note 51 infra (available at www.nysba.org).

⁴³Id.

⁴⁴See AICPA Comments on Temporary and Proposed Regulations, Sections 1.6011-4T, 301.6111-2T, 301.6112-1T (12/26/02).

⁴⁵The temporary rules can be read to mean that only tax preparation fees related to the transaction need be taken into account for purposes of determining the minimum fee, unless the IRS discovers a misallocation of fees for transaction advice to tax preparation. It is even less clear whether accounting services, fees from subcontractors and expenses are taken into account.

⁴⁶See NYSBA Comments, note 42 supra.

⁴⁷See the preamble to TD 9018, note 32 supra.

⁴⁸See IRS Battles Promoter Privilege Claims, Tax Notes Today (6/07/02).

⁴⁹See KPMG LLP, DC DC, 12/20/02.

⁵⁰See Smith, After The Alamo: Taxpayer Claims Of Privilege And The IRS War On Tax Shelters, 98 Tax Notes 233 (01/13/03).

⁵¹See the The Treasury Departments Enforcement Proposals for Abusive Tax Avoidance Transactions (3/20/02) (available at www.ustreas.gov/press/releases/po2018.htm)(herein, March 2002 Treasury Proposals).

⁵²See HR 5095, American Competitiveness and Corporate Accountability Act of 2002; Staff of the Joint Committee on Taxations Description of the Small Business and Farm Economic Recovery Act (JCX-88-02, 9/17/02); see also S. 9, Pension Protection and Expansion Act of 2003 (1/7/03).

⁵³See March 2002 Treasury Proposals, note 51 supra.

⁵⁴Treasury Circular 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents and Appraisers Before the Internal Revenue Service.

⁵⁵AICPA comments on proposed regulations to amend Circular 230 (REG-111835-99, 6/17/02), stated it has significant concerns that dissimilar standards would add unnecessary complexities into this area and undercut practitioners efforts to comply with the new rules.

⁵⁶REG-111835-99 (1/12/01). Treasury plans to repropose tax shelter opinion standards per its business plan in late 2003.

⁵⁷See Schler, Ten More Truths About Tax Shelters: The Problem, Possible Solutions and a Reply to Professor Weisbach, 55 Tax L. Rev. 325 (Spring 2002), which states, In general, an opinion would be required to be based on the real rather than hypothetical facts, to discuss all material issues including judicial doctrines, and to unambiguously state its conclusions. This approach to the tax shelter problem is useful. If nothing else, it provides a certain amount of consumer protection to users of tax shelter opinions. It does this by requiring that such opinions on their face be complete and comprehensive. This often has not been the case.

⁵⁸See note 51, supra.

⁵⁹See Pearlman, Demystifying Disclosure: First Steps, 55 Tax L. Rev. 289 (Spring 2002).

⁶⁰See the preamble to TD 9018, note 32 supra.

⁶¹Proposed Sec. 6662 regulations (REG-126016-01, 12/30/02) may even subject taxpayers to accuracy-related penalties for failure to disclose reportable transactions without regard to the merits and without statutory revisions to Sec. 6662.