IRS Plows Ahead on Abusive Deal Rules as Litigation Odds Grow

The IRS is chipping away at formalizing rules that take aim at transactions it considers abusive during a vulnerable time for the agency’s regulatory authority.

The agency recently proposed regulations to require additional reporting for basket contract transactions, complex financial transactions in which a taxpayer defers income and converts capital gains to lower taxes. The IRS has also proposed several other regulations on reporting requirements for various tax avoidance transactions in the past two years, on topics such as syndicated conservation easements, micro-captive transactions, and charitable remainder annuity trusts.

The proposed rules would name certain transactions as “listed transactions,” which ...