SECTION 1. PURPOSE

.01 This revenue procedure updates Rev. Proc. 96-58, 1996–2 C.B. 390 and identifies circumstances under which the disclosure on a taxpayer’s return of a position with respect to an item is adequate for the purpose of reducing the understatement of income tax under § 6662(d)

December 29, 1997 18 1997–52 I.R.B.

understatement attributable to any item with respect to which the relevant facts affecting the item’s tax treatment are adequately disclosed on the return or on a statement attached to the return, and there is a reasonable basis for the tax treatment of such item by the taxpayer.

.04 In general, this revenue procedure provides guidance in determining when disclosure is adequate for purposes of § 6662(d). For purposes of this revenue procedure, the taxpayer must furnish all required information in accordance with the applicable forms and instructions, and the money amounts entered on these forms must be verifiable. Guidance under § 6662(d) for returns filed in 1995, 1996, and 1997 is provided in Rev. Proc. 94–74, 1994–2 C.B. 823; Rev. Proc. 95–55, 1995–2 C.B. 457; and Rev. Proc.96–58, 1996–2 C.B. 390, respectively.