Section 6. Paperwork Reduction Act

The collection of information contained in this announcement has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545–1885. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB number. The collection of information in this announcement is in section 4 entitled REQUIRED PROCEDURES FOR ELECTING PARTICIPANTS. This information is required to apply the terms of the settlement set forth in this announcement. The information will be used to determine whether the taxpayer has reported the disclosed item properly for income tax purposes. The collection of information is required to obtain the benefit described in this announcement. The likely respondents are businesses or other for-profit institutions, small businesses or organizations, and individuals.

The estimated total annual reporting burden is 5000 hours.

The estimated annual burden per respondent varies from 3 hours to 7 hours, depending on individual circumstances,

If the taxpayer, or a TEFRA partnership in which the taxpayer was a partner, is under examination, the taxpayer also must provide a copy of the Notice of Election to the examining agent.

The Notice of Election must be prepared under penalties of perjury and:

(1) State that the taxpayer elects to participate in the settlement initiative in Announcement 2004–46;

(2) Include the taxpayer’s name, taxpayer identification number (TIN), current address, and daytime telephone number, and, if under examination, the name, address, and daytime telephone number of the examining agent. If a tax practitioner will represent the taxpayer, the practitioner must provide a completed Form 2848 or other valid power of attorney;

(3) Include the name and TIN of all other entities known to the taxpayer that directly or indirectly were parties in the Son of Boss transaction, and for each TEFRA entity, the name, address, and daytime telephone number of the tax matters partner;

(4) State whether the taxpayer claims qualification for a penalty of 0 percent, 10 percent or 20 percent; and

(5) Either (i) identify all listed transactions in which the taxpayer directly or indirectly claimed tax benefits (for example, a spouse filing jointly with a participant in a listed transaction, or as a trust beneficiary that entered into a listed transaction), or (ii) state that the taxpayer did not directly or indirectly claim tax benefits in any other listed transaction.

(b) Additional Information and Documentation — 60 days

Upon receipt and review of an election to participate, the Service will notify the taxpayer by mail whether the taxpayer is eligible to participate in this initiative. The notification will include a request for additional information and documentation. The taxpayer must submit all requested information under penalties of perjury to the Service within 60 days of the date of mailing by the Service. The Service may grant an extension for good cause to taxpayers who request additional time within the 60-day period.

(c) Closing Agreement and Payment — 30 days

After receiving the requested information, the Service will prepare a closing agreement under section 7121 reflecting the terms of the settlement. The closing agreement will provide that (1) without limitation as to the otherwise applicable effect of section 7121(b), providing inaccurate information about tax benefits claimed from other listed transactions, including other Son of Boss transactions, as required in the Notice of Election, is a misrepresentation of a material fact within the meaning of section 7121(b), and (2) the taxpayer waives all defenses to the assessment and collection of the tax liabilities determined under this initiative, including the applicable penalty and interest.

The Service will mail the closing agreement to the taxpayer who must sign and return it to the Service within 30 days of the date of mailing by the Service. The Service may grant an extension for good cause to taxpayers who request additional time within the 30-day period. Full payment of the liabilities under this initiative must be made by the date the closing agreement is executed. Any taxpayer not making full payment must submit complete financial statements and agree to other financial arrangements acceptable to the Service before the Service will execute the closing agreement. A taxpayer will be ineligible to participate in this initiative if an agreement regarding an acceptable financial arrangement cannot be reached.

(d) Other Matters

(1) Denial of a taxpayer’s request to participate in this initiative is not subject to judicial review.

(2) Execution of a closing agreement under this initiative does not preclude the Service from investigating any associated criminal conduct or recommending prosecution for violation of any criminal statute.