SECTION 2. BACKGROUND

Section 6112, as amended by the American Jobs Creation Act of 2004, P.L. 108–357, 188 Stat. 1418, requires that each material advisor with respect to any reportable transaction shall maintain (in such manner as the Secretary may by regulations prescribe) a list identifying each person with respect to whom the advisor acted as a material advisor with respect to the transaction and containing other information as the Secretary may by regulations require. Under § 301.6112–1(a), material advisors are required to prepare and maintain a list as described in the regulations and are required to furnish the list to the IRS upon written request by the IRS. For reportable transactions for which a material advisor makes a tax statement on or after August 3, 2007 (and transactions of interest entered into by a taxpayer on or after November 2, 2006, with respect to which a material advisor makes a tax statement on or after November 2, 2006), the list must include three components: an itemized statement, a detailed description of the transaction, and copies of certain documents. Section 301.6112–1(b)(3). If any component of the list is not in a form that enables the IRS to determine without undue delay or difficulty the required information, the material advisor will not be considered to have complied with the list maintenance provisions in § 6112 and § 301.6112–1. Section 301.6112–1(e)(1). Section 6708(a) provides that if any person who is required to maintain a list fails to make the list available to the IRS within 20 business days after the date of the written request, the person shall pay a penalty of

May 19, 2008 980 2008–20 I.R.B.