SECTION 3. RULES OF

APPLICATION

.01 Effective Date

Transactions in effect on or after January 1, 2011, that are the same as, or substantially similar to, the transaction described in this notice are identified as “listed transactions” for purposes of § 1.6011–4(b)(2) and §§ 6111 and 6112 as of October 21, 2015. Persons engaged in transactions in effect on or after January 1, 2011, must disclose the transactions as described in § 1.6011–4 for each taxable year in which the taxpayer participated in the transactions, provided that the period of limitations for assessment of tax had not ended on or before October 21, 2015. Material advisors who make a tax statement on or after January 1, 2011, with respect to transactions in effect on or after January 1, 2011, have disclosure and list maintenance obligations under §§ 6111 and 6112. See §§ 301.6111–3, 301.6112–1.

4See section 3.01 for disclosure requirements.

5See section 3.01 for disclosure requirements.

Independent of their classification as listed transactions, transactions that are the same as, or substantially similar to, the transaction described in this notice may already be subject to the requirements of §§ 6011, 6111, or 6112, or the regulations thereunder. If a transaction is identified as a listed transaction under section 2.01 of this notice and as a transaction of interest in Notice 2015–74, the transaction is identified as a listed transaction. Persons satisfying the disclosure requirements for a listed transaction under this notice are deemed to have satisfied the disclosure requirements under Notice 2015–74.

.02 Participation

Under § 1.6011–4(c)(3)(i)(A), for each year in which a transaction described in this notice (basket option contract) is open, only the following parties are treated as participating in the listed transaction identified in this notice: (1) the purchaser of the basket option contract, (2) if the purchaser of the basket option contract is a partnership, any general partner of the purchaser, (3) if the purchaser of the basket option contract is a limited liability company, any managing member of the purchaser, and (4) the counterparty to the basket option contract.

.03 Time for Disclosure

For rules regarding the time for providing disclosure of a transaction described in this notice, see § 1.6011–4(e) and § 301.6111–3(e). However, if, under § 1.6011–4(e), a taxpayer is required to file a disclosure statement with respect to the listed transaction described in this notice after October 21, 2015, and prior to January 19, 2016, that disclosure statement will be considered to be timely filed if the taxpayer alternatively files the disclosure with the Office of Tax Shelter Analysis by January 19, 2016.

.04 Material Advisor Threshold Amount

For the threshold amounts necessary to become a material advisor to a listed transaction, see § 301.6111–3(b)(3)(i)(B).

.05 Penalties and Period of Limitations

Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to the penalty under § 6707A. Persons required to disclose these transactions under § 6111 who fail to do so may be subject to the penalty under § 6707(a). Persons required to maintain lists of advisees under § 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) may be subject to the penalty under § 6708(a). In addition, the IRS may impose other penalties on parties involved in these transactions or substantially similar transactions, including the accuracy-related penalty under §§ 6662 or 6662A. Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to an extended period of limitations on assessment under § 6501(c)(10).

The Treasury Department and the IRS recognize that some taxpayers may have filed tax returns taking the position that they were entitled to the purported tax benefits of the type of transaction described in this notice. These taxpayers should take appropriate corrective action and ensure that their transactions are disclosed properly.

.06 Requests for a Change in Method of Accounting

(1) Background . Section 446(e) and § 1.446–1(e) provide that, except as otherwise provided, a taxpayer must secure the consent of the Commissioner before changing a method of accounting for federal income tax purposes. Section 1.446– 1(e)(3)(i) provides that, to obtain the Commissioner’s consent to an accounting method change, a taxpayer must file a Form 3115, Application for Change in Accounting Method, during the taxable year in which the taxpayer desires to make the proposed change. Section 1.446– 1(e)(3)(ii) authorizes the Commissioner to prescribe administrative procedures setting forth the limitations, terms, and conditions deemed necessary to permit a taxpayer to obtain consent to change a

November 16, 2015 662 Bulletin No. 2015–46

(b) Manner of making change . A taxpayer filing amended returns under this notice must comply with the requirements of § 1.6011–4 including, but not limited to, attaching to the amended return any disclosure statements that may be required in accordance with § 1.6011–4(a) and (e). In addition, a taxpayer filing an amended return under this section 3.06(3)(b) must write “FILED UNDER NOTICE 2015–73” at the top of any amended paper return or, with respect to any amended return submitted electronically, must indicate “FILED UNDER NOTICE 2015–73.”