SECTION 5. PAPERWORK

REDUCTION ACT

The collection of information contained in this revenue procedure 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 1545–2047. 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 control number.

whether to grant rescission in any particular case. Rather, the Commissioner (or the Commissioner’s delegate) will consider and weigh all relevant factors, regardless of whether the factor is included in this list.

(A) The person, upon becoming aware of its failure to disclose or report a reportable transaction properly, filed a complete and proper, albeit untimely, Form 8886 or 8264 (or any successor forms), as applicable. For a penalty assessed under section 6707A, this factor will weigh strongly in favor of rescission provided that (i) the taxpayer files the Form 8886 prior to the date the Service first contacts the taxpayer (including contacts by the Service with any partnership in which the taxpayer is a partner, any S corporation in which the taxpayer is a shareholder, or any trust in which the taxpayer is a beneficiary) concerning a tax examination for the tax period in which the taxpayer participated in the reportable transaction and (ii) other circumstances suggest that the taxpayer did not delay filing an untimely but properly completed Form 8886 until after the Service had taken steps to identify the taxpayer’s participation in the reportable transaction in question. For a penalty assessed under section 6707, this factor will weigh strongly in favor of rescission provided that the material advisor files the form required under section 6111 prior to the earlier of the date that any taxpayer files a Form 8886 identifying the material advisor with respect to the reportable transaction in question or the date the Service contacts the material advisor concerning the reportable transaction.

(B) The failure to properly disclose was due to an unintentional mistake of fact that existed despite the person’s reasonable attempts to ascertain the correct facts with respect to the transaction.

(C) The person has an established history of properly disclosing other reportable transactions and complying with other tax laws, including compliance with any requests made under section 6112, if applicable.

(D) The person demonstrates that the failure to include on any return or statement any information required to be disclosed under section 6011 or section 6111 arose from events beyond the person’s control.

(E) The person cooperates with the Service by providing timely information with respect to the transaction at issue that the Commissioner (or the Commissioner’s delegate) may request in consideration of the rescission request. In considering whether a person cooperates with the Service, the Commissioner (or the Commissioner’s delegate) may take into account whether the person complies with requests for additional information described in section 4.09 of this revenue procedure.

(F) Assessment of the penalty would weigh against equity and good conscience, including whether the person demonstrates that there was reasonable cause for, and the person acted in good faith with respect to, the failure to timely file or to include on any return any information required to be disclosed under section 6011 or section 6111. For a penalty assessed under section 6707A, an important factor in determining reasonable cause and good faith is the extent of the taxpayer’s efforts to ensure that persons who prepared the taxpayer’s return were informed of the taxpayer’s participation in the reportable transactions. For a penalty assessed under section 6707, an important factor in determining reasonable cause and good faith is the extent of the material advisor’s efforts to determine whether there was a requirement to file the return required under section 6111. The presence of reasonable cause, however, will not necessarily be determinative of whether to grant rescission.

.05 Absence of factors described in sec- tion 4.04 weigh against rescission . The absence of facts establishing the factors described in section 4.04 of this revenue procedure weigh against granting rescission. The absence of any one of these factors, however, will not necessarily be determinative of whether to grant rescission.

.06 Factors not considered . In determining whether to grant rescission, the Commissioner (or the Commissioner’s delegate) will not consider doubt as to liability for, or collectibility of, the penalties. For example, the Commissioner (or the Commissioner’s delegate) will not consider whether the taxpayer will suffer “economic hardship,” as defined in Treas. Reg. § 301.6343–1(b)(4), if rescission is not granted.

.07 Effect of rescission request on col- lection . A person need not pay the section 6707 or 6707A penalty assessed prior to

February 26, 2007 616 2007–9 I.R.B.