Financial Accounting Blog

Monday, December 08, 2003

Accounting web Treasury and IRS Shut Down Abusive Tax Avoidance Transaction.
The Treasury Department and the Internal Revenue Service has issued guidance to bar transactions in which taxpayers dispose of a pair of offsetting options, claiming a loss on one of the options but contending that they never have to recognize the corresponding gain on the other. These transactions are now “listed transactions.” Taxpayers who have entered into these transactions must disclose them to the IRS, and advisors promoting their use will be required to maintain lists of participating taxpayers.