Ezel / IRS Rulings / 200924045

CCA 200924045: Section 6662A penalty did not require participation in a listed transaction

Number
200924045
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Reasonable Cause Exception
Topics
Procedure, penalties, and administration
Code sections
§ 6662
Ruling dated
April 13, 2009
Publicly released
June 12, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel addressed language for asserting the section 6662A penalty in a statutory notice of deficiency involving a DATS transaction. It advised that participation in a listed transaction was not an element of the section 6662A penalty and was not always required for the penalty. The notice could instead identify the DATS transaction as the transaction to which the reportable transaction understatement was attributable and cite the relevant IRS notice. Chief Counsel also said it was appropriate to determine whether the transaction had been disclosed.

Ruling snapshot

  • Question: Did the section 6662A penalty require the taxpayer to have participated in a listed transaction?
  • Outcome: Advice given, participation was not a required element
  • Key authorities: IRC § 6662A

Full text (IRS public release)

ID: CCA-413949-09 Number: 200924045
Release Date: 6/12/2009
Office: --------------
UILC: 6664.03-00

From: -------------------
Sent: April 13, 2009
To: ----------------
Cc: ---------------------
Subject: DATS Shelter Project

1) The taxpayer's particpation in a listed transaction is not an absolute necessity for the 6662A penalty in general and "participation" in a listed transaction is not language found as an element of the section 6662A penalty. An identification of the transaction to which the reportable transaction understatement is attributable (i.e. the DATS transaction) seems appropriate, however. For example the SNOD might say, "It is determined that you are liable for a penalty under IRC § 6662A for a reportable transaction understatement attributable to a DATS transaction as identified in Notice
[insert the number of the appropriate notice]."

It is fine to determine whether there was disclosure. ----------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
------------------------
--
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace