IRS Official Explains New Role in Dealing With Tax Shelter Issues

The IRS has elaborated on how the new Senior Executive position in the Office of Chief Counsel, which was created to focus on potentially abusive tax-avoidance transactions, will operate in coordination with other IRS personnel already devoted to that mission.

The original announcement reported that Nicholas J. DeNovio, a Washington D.C. attorney, had been selected to fill the new post and that he would supervise a staff of attorneys and lead task force initiatives to expedite the published guidance process to address questionable transactions. His group will work closely with the IRS's operating divisions and the Treasury Department to craft timely administrative responses to abusive transactions.

Responding to CCH Incorporated, an IRS spokesperson elaborated on the process as explained in IR-2003-16. Information about questionable transactions, gleaned from taxpayer disclosures or promoter registrations, is and will continue to be sent to the Office of Tax Shelter Analysis (OTSA) in the Large and Mid Size Business Division (LMSB) for initial review. The OTSA collects and analyzes information about abusive transactions, and coordinates the LMSB's tax shelter planning and operations. It serves as a clearinghouse for information that comes to the attention of the IRS relating to potentially improper tax shelter activity.

"OTSA will determine whether further analysis is warranted for any given transaction based on available information. If so, OTSA will send the information to this office to evaluate," DeNovio explained to CCH. "We then will analyze and coordinate, if necessary, with other appropriate technical experts within the Office of Chief Counsel to decide whether to issue published guidance regarding the transaction or take other action."

provided by CCH

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