Reportable Transactions

Reportable Transactions
Reportable Transactions Are Causing Business Owners Big Trouble With the IRS Because They Are Being Handled Improperly

Did you know that you must report certain transactions, or face fines up to $50K per year? Do you even know if any of your transactions fit the definition of “reportable?”

Let us guide you through this maze and keep you out of trouble with the IRS


IRS has made many deductions reportable, but require specific forms to properly disclose the transaction.

In an attempt to curb the use of abusive tax shelters, new, stiff penalties are in effect for failure to adequately disclose a reportable transaction to the IRS. But unlike most other penalties, the law significantly limits the IRS’s ability to rescind or abate these penalties for reasonable cause or other reasons.

This means that taxpayers must be much more vigilant in identifying and disclosing these transactions. Even your CPA may not recognize a particular transaction as reportable.

Don’t fall into the trap of thinking that reportable transactions are solely limited to what the IRS calls “abusive tax shelters.” The definition of a reportable transaction includes many
transactions that are routine and perfectly legitimate. It can include any transaction with the potential for tax evasion or avoidance. If you entered into any arrangement with the primary purpose of avoiding or reducing taxes, that is probably a reportable transaction that need to be disclosed.


Some common examples are:

  • Retirement plans
  • Family limited partnerships
  • Charitable Remainder Trust
  • Foreign accounts
  • Welfare benefit plans
  • Captive Insurance
  • Section 79 plans
  • Life Insurance plans taken as a tax deduction
  • Various types of trusts including Guam and offshore trusts
  • Confidential transactions
  • Loss transactions
  • Back-dated retirement plan contributions
  • Abusive straddles
  • ESOP
  • Offshore employee leasing arrangements
  • 412i plans
  • S-Corporation income shifting
  • FBAR,OVDI International Taxes

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