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

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 

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.

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