United States National Report on Mandatory Disclosure Rules

Abstract

This National Report was prepared for a conference titled Mandatory Disclosure Rules, hosted by the Institute for Austrian and International Tax Law at the Vienna University of Economics and Business in July 2021. This National Report addresses the mandatory disclosure rules that apply to “reportable transactions” under United States tax law. In responding to the conference questionnaire, this National Report describes the tax enforcement strengths and weaknesses of the mandatory disclosure rules that apply to reportable transactions in the US. It provides an overview of the types of transactions that taxpayers and advisors are required to disclose to the IRS, the persons that are required to disclose, and the process for disclosure. In addition, it describes the challenge of overdisclosure that IRS officials have encountered over the past two decades since the reportable transaction rules were first introduced. Finally, it offers predictions of the future challenges the IRS may face in continuing to rely on the reportable transaction disclosure regime as an enforcement tool and outlines potential policy responses that government officials could adopt.

This National Report will be published in Mandatory Disclosure Rules (International Bureau of Fiscal Documentation) in 2022.

Keywords: Tax Shelter, Reportable Transaction, Tax Avoidance, Disclosure, IRS, Audit, CIC Services LLC v. Internal Revenue Service

JEL Classification: H20, H23, H24, H25, H26, H29, K34