CCA 201138039: One section 6707A penalty applies to an after-listed transaction

Number

201138039

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Penalty for Failure to Include Reportable Transaction Information with Return

Topics

Procedure, penalties, and administration

Code sections

§ 6707A, § 6110

Ruling dated

July 25, 2011

Publicly released

September 23, 2011

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 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

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 Advice addressed the penalty under IRC § 6707A for an after-listed transaction. The advice stated that there is one reporting obligation and therefore one penalty for the transaction. The penalty amount is computed by adding the decrease in tax from all participation years that should have been reported when the transaction became listed. The advice concluded that only one minimum and one maximum apply on the facts presented, although the maximum did not affect the result because the combined decrease was below the statutory maximum for an individual with a listed transaction.

Ruling snapshot

Question: How many section 6707A penalties apply to an after-listed transaction, and how is the amount calculated?
Outcome: advice given
Key authorities: IRC § 6707A

Full text (IRS public release)

ID: CCA_2011072513000659 Number: 201138039
Release Date: 9/23/2011
Office: --------------
UILC: 6707A.00-00

From: ---------------------------
Sent: Monday, July 25, 2011 1:00:08 PM
To: ---------------------
Cc: ------------------------------------------------------------------------------- Subject: RE: ------- 6707A 30 day letter for approval

------

The exam team correctly computed the 6707A penalty. For after-listed transactions, like the one here, there's only one reporting obligation and, therefore, only one penalty. To compute the amount of that penalty, add up the decrease in tax from all of the years of participation that should have been reported at the time that the transaction became a listed transaction. Here, that would be the sum of the decrease in tax from ------- and -------. Note that after-listed transactions are a special case and that, in other situations, you would not sum the decrease in tax from multiple years.

It's our position that there would only be one min and one max applied in your case, but it doesn't matter, since the sum of the decrease in tax from both years is less than the $100,000 maximum for an individual with a listed transaction.

Hope this helps. Please let me know if you have any questions.

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