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and regulations of a country whose food
safety system FDA has officially
recognized as comparable or determined
to be equivalent to that of the United
States).
(iv) If your foreign supplier is a shell
egg producer that is not subject to the
requirements of part 118 of this chapter
because it has fewer than 3,000 laying
hens and you choose to comply with the
requirements in this section, you must
obtain written assurance, before
importing the shell eggs and at least
every 2 years thereafter, that the shell
egg producer acknowledges that its food
is subject to section 402 of the Federal
Food, Drug, and Cosmetic Act (or, when
applicable, that its food is subject to
relevant laws and regulations of a
country whose food safety system FDA
has officially recognized as comparable
or determined to be equivalent to that of
the United States).
*
*
*
*
*
(c) * * *
(1) * * *
(i) Except as specified in paragraph
(c)(1)(iii) of this section, in approving
your foreign suppliers, you must
evaluate the applicable FDA food safety
regulations and information relevant to
the foreign supplier’s compliance with
those regulations, including whether the
foreign supplier is the subject of an FDA
warning letter, import alert, or other
FDA compliance action related to food
safety, and document the evaluation.
* * *
*
*
*
*
*

application-related actions for new
animal drug applications (NADAs) and
abbreviated new animal drug
applications (ANADAs) during January
and February 2016. That rule included
two amendatory instructions that cited
incorrect sections of 21 CFR part 524.
DATES: Effective: April 28, 2016.
FOR FURTHER INFORMATION CONTACT:
George K. Haibel, Center for Veterinary
Medicine (HFV–6), Food and Drug
Administration, 7519 Standish Pl.,
Rockville, MD 20855, 240–402–5689,
[email protected].
SUPPLEMENTARY INFORMATION: In FR Doc.
2016–08827, appearing on page 22520
in the Federal Register of Monday,
April 18, 2016, the following corrections
are made:
On page 22524, in the third column,
remove amendatory instructions 35 and
36.
List of Subjects in 21 CFR Part 524
Animal drugs.
Accordingly, 21 CFR part 524 is
corrected by making the following
correcting amendments:
PART 524—OPHTHALMIC AND
TOPICAL DOSAGE FORM NEW
ANIMAL DRUGS
1. The authority citation for part 524
continues to read as follows:

■

Authority: 21 U.S.C. 360b.
§ 524.1193

[Amended]

2. In paragraph (b)(2) of § 524.1193,
remove ‘‘000859’’ and in its place add
‘‘016592’’.

■

Dated: April 21, 2016.
Leslie Kux,
Associate Commissioner for Policy.

§ 524.1484k

[FR Doc. 2016–09784 Filed 4–27–16; 8:45 am]

■

[Amended]

3. In § 524.1484k, revise the section
heading to read: Neomycin and
prednisolone suspension.

BILLING CODE 4164–01–P

Dated: April 22, 2016.
Tracey Forfa,
Acting Director, Center for Veterinary
Medicine.

DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration

[FR Doc. 2016–09865 Filed 4–27–16; 8:45 am]
BILLING CODE 4164–01–P

21 CFR Part 524
[Docket No. FDA–2016–N–0002]

New Animal Drugs; Approval of New
Animal Drug Applications; Changes of
Sponsorship; Correction
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AGENCY:

Food and Drug Administration,

DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 301

HHS.

[TD 9764]

Final rule; technical
amendment; correcting amendments.

RIN 1545–BF39

ACTION:

The Food and Drug
Administration (FDA) published a
document in the Federal Register of
April 18, 2016 (81 FR 22520), amending
the animal drug regulations to reflect

SUMMARY:

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Section 6708 Failure To Maintain List
of Advisees With Respect to
Reportable Transactions
Internal Revenue Service (IRS),
Treasury.

AGENCY:

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ACTION:

Final regulations.

This document contains final
regulations relating to the penalty under
section 6708 of the Internal Revenue
Code for failing to make available lists
of advisees with respect to reportable
transactions. Section 6708 imposes a
penalty upon material advisors for
failing to make available to the
Secretary, upon written request, the list
required to be maintained by section
6112 of the Internal Revenue Code
within 20 business days after the date of
such request. The final regulations
primarily affect individuals and entities
who are material advisors, as defined in
section 6111 of the Internal Revenue
Code.

SUMMARY:

Effective Date: These regulations
are effective on April 28, 2016.
Applicability Date: For date of
applicability see § 301.6708–1(i).
FOR FURTHER INFORMATION CONTACT:
Hilary March, (202) 317–5406 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
DATES:

Paperwork Reduction Act
The collection of information
contained in these final regulations has
been reviewed and approved by the
Office of Management and Budget in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545–
2245.
The collection of information in the
final regulations is in § 301.6708–
1(c)(3)(ii). This information is required
for the IRS to determine whether good
cause exists to allow a person affected
by these regulations an extension of the
legislatively established 20-business-day
period to furnish a lawfully requested
list to the IRS. The collection of
information is voluntary to obtain a
benefit. The likely respondents are
persons (individuals and entities) who
qualify as material advisors, as defined
in section 6111, who are unable to
respond to a valid and statutorily
authorized section 6112 list request
within the statutory period of time
provided by section 6708.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a valid control
number.
Books and records relating to a
collection of information must be
retained as long as their contents might
become material in the administration
of any internal revenue law. Generally,
tax returns and tax return information
are confidential, as required by section
6103 of the Internal Revenue Code.

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Background
This document contains amendments
to the Procedure and Administration
Regulations (26 CFR part 301) under
section 6708 relating to the penalty for
failure by a material advisor to maintain
and make available a list of advisees
with respect to reportable transactions.
On March 8, 2013, a notice of proposed
rulemaking (REG–160873–04) relating to
the penalty under section 6708 was
published in the Federal Register (78
FR 14939). A public hearing was
scheduled for July 2, 2013. The IRS did
not receive any requests to testify at the
public hearing, and the hearing was
cancelled. Two comments were received
in response to the notice of proposed
rulemaking. After considering the
comments, the Treasury Department
and the IRS are adopting the proposed
regulations as amended by this Treasury
decision. The revisions are discussed
elsewhere in this document.
Additionally, minor, non-substantive
edits were made to the proposed
regulations to improve clarity.

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Summary of Comments and
Explanation of Revisions
In response to the notice of proposed
rulemaking, the IRS received and
considered two comments. Those
comments are available for public
inspection at www.regulations.gov or
upon request.
The comments covered ten areas: (1)
Delivery of the list request by leaving it
at the material advisor’s last and usual
place of abode or usual place of
business; (2) the date the 20-businessday period begins in cases where the list
request is mailed to the material
advisor; (3) the imposition of the
penalty on the day of compliance when
the response is untimely; (4) extensions
of time for complying with list requests;
(5) reasonable cause for failure to
furnish lists within the 20-business-day
time period in cases where a material
advisor’s employee violates the material
advisor’s section 6112 list maintenance
procedures; (6) the ordinary business
care standard; (7) reliance on an
independent tax professional’s advice;
(8) the accumulation of penalties during
the IRS agent’s review of an incomplete
list where the material advisor fails to
establish that it acted in good faith; (9)
the examples provided in proposed
§ 301.6708–1(g) and (h); and (10)
administrative review of the imposition
of the penalty.
1. Comments Relating to § 301.6708–
1(b)
As proposed, § 301.6708–1(b) of the
regulations provided that the 20-

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business-day period within which the
material advisor must make the list
available shall begin on the first
business day after the earliest of the date
that the IRS (1) mails a list request by
certified or registered mail, (2) hand
delivers the written list request, or (3)
leaves the written list request at the
material advisor’s last and usual place
of abode or usual place of business.
A. Delivery of the List Request by
Leaving It at the Material Advisor’s Last
and Usual Place of Abode or Usual
Place of Business
One commenter recommended
deleting proposed § 301.6708–1(b)(3),
which allows the IRS to leave the
written list request at the material
advisor’s last and usual place of abode
or usual place of business, noting that
this method of delivery did not appear
in the interim guidance issued by the
IRS in Notice 2004–80, 2004–2 C.B. 963.
The commenter expressed a concern
that the list request may be left with a
child or another person who fails to
deliver it to the material advisor or that
it may be left on a door step and lost or
destroyed before being discovered by
the material advisor. If such an incident
were to occur, the material advisor who
did not receive a list request would be
in the difficult position of proving that
they never received the list request to
qualify for reasonable cause. The
commenter also compared the list
request to a notice of deficiency, which
is delivered by certified or registered
mail, and to collection due process
notices, which may be given in person,
left at the dwelling or usual business
place of the person to whom the notice
is addressed, or sent by registered or
certified mail. The commenter stated
that a list request is more similar to a
notice of deficiency than a collection
due process notice because it requires
affirmative action.
There is an important way in which
a list request under section 6112 is
dissimilar to a notice of deficiency. A
taxpayer who wishes to challenge the
determination in a notice of deficiency
must file a petition with the United
States Tax Court within 90 days of the
notice date (150 days if the taxpayer is
located outside of the United States).
This time period cannot be altered. By
contrast, if the IRS leaves the written list
request at the material advisor’s usual
place of business, but the material
advisor does not receive the list request
despite the exercise of ordinary business
care, the material advisor may,
depending on all facts and
circumstances, qualify for an extension
of the 20-business-day period to furnish
the list and may have reasonable cause

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25329

for failing to timely furnish the list for
the days the material advisor was
unaware a list request had been made.
The provision allowing for delivery of
the list request to the material advisor’s
usual place of business is necessary to
facilitate the delivery of a list request.
For example, this provision enables the
Service to leave a list request with the
administrative assistant of the person
required to maintain the list. Further,
this provision assists in the delivery of
a list request to a material advisor who
is attempting to evade delivery of the
request.
Nonetheless, in light of the
commenter’s concerns, the final
regulations narrow the scope of
§ 301.6708–1(b). The final regulations
provide that a list request may be left at
the material advisor’s usual place of
business and remove the language
regarding leaving the list request at the
material advisor’s place of abode. The
final regulations also provide that a list
request can only be left with an
individual 18 years of age or older.
B. The Date the 20-Business-Day Period
Begins in Cases Where the List Request
Is Mailed to the Material Advisor
The commenter also objected that,
when the IRS mails the list request, the
time to comply is shorter than in cases
where the request is hand delivered
because under § 301.6708–1(b)(1), the
20-business-day period is calculated
from the date of mailing. The
commenter also expressed a concern
that the material advisor may have no
way of determining when the IRS
mailed the list request. The commenter
suggested that the regulation require the
list request to state the date of mailing
and suggested that the 20-business-day
period for making the list available
begin the later of three days after the
stated date of mailing or, if the material
advisor can establish the date of
delivery, the date of actual delivery.
With respect to the commenter’s
concern that the material advisor may
not know the date the IRS mailed the
list request, IRS employees requesting
lists are expected to date the list request
with the date it is mailed. Additionally,
the list requests are sent by certified
mail and the recipient can use the
certified mail number to look up the
date of mailing if the envelope
containing the list request is not itself
postmarked with the date of mailing.
Regarding the rule proposed by the
commenter, the statutory text of section
6708 itself provides for imposition of
the penalty if the material advisor fails
to make the list available upon written
request ‘‘within 20 business days after
the date of such request.’’ (Emphasis

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added.) Were the regulations to provide
for the 20-business-day period to begin
three days after the date the letter was
mailed, in some circumstances, the
material advisor would receive more
than 20 business days in which to
respond to the list request.
Where the list request is mailed to the
material advisor, the IRS has historically
interpreted ‘‘the date of such request’’ to
refer to the date of mailing. See Notice
2004–80, 2004–2 CB 963. This
interpretation is reasonable, particularly
given the requirement that material
advisors maintain the list in a readily
accessible form. The 20-business-day
period is sufficient to accommodate
normal mailing time and to leave
sufficient time after receipt, in ordinary
circumstances, for a material advisor to
produce a list that has been maintained
in a readily accessible form. Adopting
the rule suggested by the commenter
would complicate the rule to
accommodate the unusual circumstance
in which the amount of time it took for
the material advisor to receive the list
request made it impossible for the list to
be timely furnished. In such a
circumstance, however, the material
advisor may, considering all facts and
circumstances, be eligible for an
extension of the 20-business-day period
and may, considering all facts and
circumstances, have reasonable cause
for not providing the list within the 20business-day period. Accordingly, this
comment was not adopted.
2. Comment Relating to § 301.6708–
1(e)(1) and (2): The Imposition of the
Penalty on the Day of Compliance When
the Response Is Untimely
As proposed, the penalty was
computed under § 301.6708–1(e)(1) and
(2) from the first calendar day after the
period for furnishing a list in the form
required by section 6112 (either the 20business-day period following a written
list request or the extension period, if
extended) until, and including, the day
the person’s failure ends. One
commenter stated that, if the list is
furnished after the 20-business-day
period, the day that the list is furnished
should not be included in the penalty
computation. The commenter further
explained its interpretation that the
language of section 6708(a)(1) providing
that the penalty is imposed for ‘‘each
day of such failure after the 20th day’’
means that the penalty may not be
imposed on the day that the list is
furnished to the IRS because on that day
there was no failure to respond to the
list request.
Section 6708(a)(1) provides:
If any person who is required to maintain
a list under section 6112(a) fails to make such

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list available upon written request to the
Secretary in accordance with section 6112(b)
within 20 business days after the date of such
request, such person shall pay a penalty of
$10,000 for each day of such failure after
such 20th day.

The purpose of the section 6708
penalty is to encourage voluntary
compliance with the requirement to
maintain section 6112 lists and timely
provide those lists to the IRS. Penalizing
the material advisor on the day of
compliance does not significantly
promote that purpose. Balancing the
purpose of the penalty with the size of
this particular penalty warrants
adopting the comment in this case.
Accordingly, § 301.6708–1(e)(1) of the
regulations provides that the day the list
was furnished to the IRS will not be
included in the calculation of the
penalty amount.
3. Comment Relating to § 301.6708–1(c):
Manner of and Extensions of Time for
Making a List Available
Section 301.6708–1(c)(3) of the
regulations permits the IRS, in its
discretion, to grant an extension of the
20-business-day period upon a showing
of good cause. Under the regulations as
proposed, any request for an extension
had to, among other requirements, state
that to the best of the person’s
knowledge, all information and records
relating to the list under that person’s
possession, custody, or control have
been maintained according to
procedures and policies consistent with
sections 6001 and 6112.
The proposed regulations contained
one example illustrating the application
of the § 301.6708–1(c)(3) extension
provisions. See § 301.6708–1(c)(4). The
example concerns a large law firm that
is a material advisor and has educated
its attorneys about the firm’s obligations
related to reportable transactions. To
ensure compliance, the firm has policies
in place, under which one professional
will notify the firm’s compliance officer
about any tax engagement involving a
reportable transaction and then direct a
subordinate to send the documents
required to be maintained under section
6112 to the compliance officer. In
compiling its section 6112 list after
receiving a request from the IRS, the
firm discovers that one of its attorneys,
who is no longer with the firm, did not
provide the documentation required by
the firm’s policies with respect to one
reportable transaction. Because the firm
will have to search for responsive
documents in its storage facility and
contact clients for information, it will
not be able to respond to the list request
within 20 business days and requests a
10-day extension. In this example, the

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IRS grants the 10-day extension with
respect to the one transaction at issue.
One commenter suggested that the
IRS should also grant an extension
where one of the firm’s professionals
failed to disclose one or more reportable
transactions in contravention of
established firm policy, and as a result,
the firm did not know that it was a
material advisor with respect to those
transactions. In such a situation, the
commenter suggested that the firm
would need additional time to locate
information. The commenter noted that
the example in the proposed regulations
does not cover such a situation and
suggested that an additional example
covering this situation be added to the
regulation. To eliminate any confusion
regarding the scenario posed by the
commenter, an additional example
addressing the commenter’s concern has
been added to § 301.6708–1(c)(4).
The commenter also objected to the
requirement that a person requesting an
extension of the 20-business-day period
must state that, to the best of the
person’s knowledge, all information and
records relating to the list under the
person’s possession, custody, or control
have been maintained in accordance
with procedures and policies that are
consistent with sections 6001 and 6112.
To account for the scenario in which
one of a firm’s professionals has failed
to disclose a reportable transaction in
contravention of its policy, the
commenter suggested that a person
should be able to request an extension
under § 301.6708–1(c)(3)(ii) either by
making the above statement or by
providing ‘‘a detailed explanation of the
procedures such person has in place to
comply with the requirements of section
6112, its efforts to adhere to such
procedures, and the reasons why the
specific information and records sought
in the request were not so maintained.’’
In some situations warranting an
extension, including the scenario
described by the commenter and the
examples set forth in § 301.6708–1(c)(4),
the person requesting the extension will
not be able to make the statement
required by the proposed regulation. For
instance, in example one of § 301.6708–
1(c)(4), the firm discovers after receiving
the list request that a subordinate did
not provide the documentation relating
to a reportable transaction to the
compliance officer, in contravention of
the firm’s policy. Accordingly, at the
time of the extension request, the firm
is aware that the records relating to at
least one transaction have not been
maintained in accordance with its
procedures and policies. The firm,
therefore, cannot state that all records
relating to the list have been maintained

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Federal Register / Vol. 81, No. 82 / Thursday, April 28, 2016 / Rules and Regulations
in accordance with its list maintenance
procedures and policies, as the
proposed regulation required. The final
regulation is changed so that material
advisors can make the statements
required by § 301.6708–1(c)(3)(ii) in
order to request an extension even if,
after receiving a list request, they
discover a failure to comply with their
list maintenance procedures, as long as,
to the best of their knowledge as of the
date of the list request, all information
and records relating to the list had been
maintained in accordance with
procedures and policies consistent with
sections 6001 and 6112.
The specific language suggested by
the commenter, however, is very broad.
Persons who are required to maintain a
list under section 6112 are required and
expected to maintain the list in a readily
accessible form. See § 301.6112–1(d). To
comply with section 6112, ordinary
business care requires a person, upon
discovering any failure relating to the
list, to take immediate steps to correct
the failure. The commenter’s suggested
language could allow an extension to be
obtained by a person who became aware
of a failure relating to the list prior to
a request for the list, but who has not
corrected it or has otherwise not
exercised ordinary business care or
made a good-faith effort to comply with
section 6112 by maintaining the list in
a readily accessible form.
Therefore, although the specific
language suggested by the commenter
was not adopted, § 301.6708–1(c)(3)(ii)
has been amended as set forth in the
regulatory text of this rule to account for
the circumstance identified by the
commenter.
In addition, language is added to
section 301.6708–1(c)(2) to clarify that
making the list available through
inspection includes allowing the IRS to
copy the list. This is consistent with the
underlying requirement to furnish the
list under section 6112. See section
301.6112–1(e)(1) (providing that each
component of the list must be furnished
to the IRS in a format that enables the
IRS to determine without undue delay
or difficulty the information required to
be included in the list). This
clarification is also consistent with case
law concluding that inspecting or
examining includes copying documents.
See, e.g., Westside Ford, Inc. v. United
States, 206 F.2d 627, 634 (9th Cir. 1953)
(holding that the right to inspect
documents under 50 U.S.C. 2155(a)
includes the right to make copies);
Boren v. Tucker, 239 F.2d 767, 771–72
(9th Cir. 1956) (holding that the right to
examine documents under section 7602
includes the right to make copies);
McGarry v. Riley, 363 F.2d 421, 424 (1st

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Cir. 1966) (holding that a court order
enforcing a summons under section
7602 necessarily allowed the Service to
make copies, regardless of whether the
order specifically allowed copying).
4. Comments Relating to § 301.6708–
1(g): Reasonable Cause for Failure To
Furnish Lists Within the 20-BusinessDay Time Period
Section 6708(a)(2) provides an
exception to the penalty for any day in
which the failure to furnish the list is
due to reasonable cause. Section
301.6708–1(g) describes reasonable
cause for purposes of the section 6708
penalty. Reasonable cause is determined
on a case-by-case and day-by-day basis,
taking into account all the relevant facts
and circumstances. Factors considered
in determining the existence of
reasonable cause include, but are not
limited to, good-faith efforts to comply
with section 6112, exercise of ordinary
business care, supervening events
beyond the person’s control, and
reliance on an independent tax
professional’s advice. Section 301.6708–
1(g) also provides examples illustrating
the application of the reasonable cause
provisions.
A. Reasonable Cause Where an
Employee of the Material Advisor
Violates the Material Advisor’s Section
6112 List Maintenance Procedures
One commenter stated that the IRS
should find reasonable cause where an
employee of the material advisor failed
to disclose one or more reportable
transactions in contravention of the
firm’s established list maintenance
procedures, and as a result, the firm did
not know that it was a material advisor
with respect to those transactions. The
commenter suggested expanding the
illustrations of reasonable cause to
include this situation.
Similarly, the other commenter was
concerned by a lack of clarity as to how
the actions of a material advisor’s
employees, shareholders, partners, or
agents would affect the material
advisor’s reasonable cause claim when
the material advisor is a law firm,
accounting firm, or similar entity. The
commenter noted that, under
§ 301.6111–3(b)(2)(iii)(A), these
individuals are generally not treated as
material advisors, and their tax
statements are generally attributed to
their employers, corporations,
partnerships, or principals. The
commenter suggested that proposed
§ 301.6708–1(g)(3) be revised to clarify
that a material advisor may still show
reasonable cause even if one or more
employees of the material advisor did
not exercise ordinary business care and

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would not have reasonable cause, as
long as the material advisor had
appropriate procedures in place, the
failure represents an isolated incident,
and the material advisor acted promptly
to correct the error upon learning of the
employee’s non-compliance. The
commenter also suggested adding an
example to proposed § 301.6708–1(g)
similar to that in proposed § 301.6708–
1(c)(4), which states that under the
given circumstances, a material advisor
should be granted an extension despite
a former subordinate’s failure to comply
with its list maintenance policy.
Proposed § 301.6708–1(g)(3) stated
that ordinary business care may be
established by showing that the material
advisor established and adhered to list
maintenance procedures reasonably
designed and implemented to ensure
compliance with section 6112. Proposed
section 301.6708–1(g)(3) also stated that,
considering all the relevant facts and
circumstances, a material advisor may
still be able to demonstrate ordinary
business care despite an isolated and
inadvertent failure related to the list if
the material advisor shows that steps
were taken to correct any such failure
upon discovery. Section 301.6708–
1(g)(3) is intended to capture failures
that may be caused by the actions of an
individual employee, shareholder,
partner, or agent of the material advisor
when the material advisor is a law firm
or other entity. Depending on the facts
and circumstances of the particular
case, a material advisor in the situations
described by the commenters may be
able to establish that it exercised
ordinary business care and made goodfaith efforts to comply with section
6112, and therefore had reasonable
cause under the regulations as already
proposed. Accordingly, the comment
was not adopted to the extent that it
recommended modifying proposed
§ 301.6708–1(g)(3). To respond to the
commenter’s concerns, however, a new
example 5 has been added to
§ 301.6708–1(h)(3), in which a material
advisor is determined to have
reasonable cause despite a former
employee’s failure to comply with its
list maintenance procedures.
B. The Ordinary Business Care Standard
As proposed, § 301.6708–1(g)(3)
provides, in relevant part: ‘‘The exercise
of ordinary business care may constitute
reasonable cause. To show ordinary
business care, the person may, for
example, show that it established, and
adhered to, procedures reasonably
designed and implemented to ensure
compliance with the requirements of
section 6112.’’ One commenter stated
that, absent extraordinary

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circumstances, establishing and
adhering to reasonable compliance
procedures should always result in a
finding of reasonable cause. The
commenter suggested revising the
wording of proposed § 301.6708–1(g)(3)
to provide that ‘‘[t]he exercise of
ordinary business care shall constitute
reasonable cause.’’
Reasonable cause is determined on a
case-by-case and day-by-day basis,
taking into account all the relevant facts
and circumstances. A material advisor
will not be able to establish reasonable
cause if the material advisor did not
exercise ordinary business care.
However, ordinary business care is not
the only factor that must be taken into
account to determine whether the
failure was due to reasonable cause. The
wording suggested by the commenter
does not acknowledge that the
determination of whether a material
advisor establishes reasonable cause is
based on all relevant facts and
circumstances, including not only
whether the material advisor exercised
ordinary business care in maintaining a
readily producible list but also whether
the material advisor, upon receiving the
list request, tried in good faith to make
the list available within the 20-businessday period (or extended period). In fact,
the suggested wording would elevate
the exercise of ordinary business care
above all other facts and circumstances
that should be taken into account in
determining reasonable cause. Although
exercising ordinary business care is
important, standing alone, it is not
sufficient to demonstrate reasonable
cause. Accordingly, this comment was
not adopted.
C. Reliance on the Advice of an
Independent Tax Professional
Proposed, § 301.6708–1(g)(5) provided
in relevant part that a person may rely
on the advice of an independent tax
professional to establish reasonable
cause. One commenter expressed
concern that the IRS and courts would
interpret this provision in such a way as
to presume that a material advisor could
not establish reasonable cause if it did
not consult with an independent tax
professional. The commenter objected to
any such presumption on the basis that
most material advisors have the
necessary background and experience to
evaluate their list maintenance
obligations without seeking outside
advice. The commenter suggested that
the proposed regulations be amended to
explicitly reject any such presumption.
Under proposed § 301.6708–1(g)(1),
the determination of whether a material
advisor had reasonable cause is made on
a case-by-case and day-by-day basis,

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taking into account all the relevant facts
and circumstances, the most important
of which are those that reflect the extent
of the person’s good-faith efforts to
comply with section 6112. Reasonable
cause under proposed § 301.6708–
1(g)(5) is not conditioned on seeking the
advice of an independent tax
professional. Rather, that section
describes how reliance on an
independent tax professional will be
taken into account for purposes of
determining whether a failure was due
to reasonable cause. However, to
alleviate the concern and clarify that a
material advisor is not required to
obtain advice from an independent tax
professional to establish reasonable
cause, the following sentence has been
added to the final regulations under
§ 301.6708–(g)(5)(i): ‘‘Independent tax
professional advice is not required to
establish reasonable cause, and the
failure to obtain advice from an
independent tax professional does not
preclude a finding of reasonable cause
if, based on the totality of all of the
relevant facts and circumstances,
reasonable cause has been established.’’
The commenter also suggested
supplementing § 301.6708–1(g)(5)(i)
with language indicating that reasonable
reliance on the advice of an
independent tax professional is to be
evaluated based on the knowledge and
good faith of the individual employee or
employees primarily responsible for
compliance procedures for the
particular transaction at issue, rather
than other employees at the firm.
Proposed, § 301.6708–1(g)(5)(i)
provided that, to establish reasonable
cause, a material advisor’s reliance on
the advice of an independent tax
professional must be reasonable and in
good faith, in light of all the other facts
and circumstances. While the
knowledge and good faith of the
individual employees primarily
responsible for compliance procedures
for the particular transaction is certainly
relevant to the determination of whether
the material advisor reasonably relied
on the advice of an independent tax
professional, the knowledge and good
faith of those employees’ supervisors or
other individuals also may be relevant,
depending on the specific facts and
circumstances. Accordingly, this
comment was not adopted.
D. Examples
Proposed section 301.6708–1(g)(6)
contains examples illustrating the
application of the reasonable cause
provisions. Example 3, Example 5, and
Example 6 of proposed § 301.6708–
1(g)(6) reference a particular technology
for saving the data to a CD–ROM, and

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reference sending the paper documents
to an off-site storage facility. The
examples have been updated to remove
any implication that any particular
technology is specifically approved or
required under the regulations, or that
the regulations require storage of
original records in both electronic and
paper format. These changes are not
intended to change the principles
illustrated in by these examples.
5. Comments Relating to § 301.6708–
1(h)(2) and (h)(3)
Section 301.6708–1(h)(2) contains
special considerations for determining
reasonable cause for the period after the
material advisor has furnished a list and
before the IRS has informed the material
advisor of any identified failures in the
list. Section 301.6708–1(h)(3) provides
examples illustrating the application of
this provision. Some of these examples
involve situations where the material
advisor has omitted information from
the list.
A. Period of IRS Review
Proposed section 301.6708–1(h)(2)
provided that if the material advisor
establishes that it acted in good faith in
its efforts to fully comply with the
requirements of section 6112, the
material advisor will be deemed to have
reasonable cause for the days between
when the material advisor furnished the
list to the IRS and when the IRS informs
the material advisor of any identified
failures in the list. If the material
advisor does not establish that it acted
in good faith, the IRS will not consider
the time it takes to review a list as a
factor in determining whether the
material advisor has reasonable cause
for that period. One commenter
suggested that the penalty should stop
accruing once the list has been
furnished to the IRS and a specified
reasonable review period has passed.
The commenter also stated that the
penalty should not start accruing again
until the IRS has notified the material
advisor that the list appears deficient.
Section 301.6708–1(h)(2) was
included in the proposed regulations
because a material advisor who has
acted in good faith and has produced
what it believes to be a complete and
timely list has no reason to believe that
the list is incomplete until the IRS
informs that material advisor of any
identified failure. Therefore, for a
material advisor who acted in good
faith, the proposed regulations provide
that no penalty is imposed for the time
it takes for the IRS to review the list and
inform the material advisor of any
identified failure, regardless of the

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length of time it takes the IRS to
complete this process.
The rule in proposed § 301.6708–
1(h)(2) is more favorable to material
advisors who have acted in good faith
than the rule suggested by the
commenter. Under the commenter’s
suggestion, a material advisor who
furnished the list in good faith does not
get the benefit of being deemed to have
reasonable cause for the period of IRS
review. However, if the commenter’s
suggestion is adopted, a material advisor
who did not furnish a list in good faith
would have reasonable cause for at least
some of the time that the IRS is
reviewing the list regardless of whether
the facts and circumstances support
reasonable cause. Consequently, the
comment was not adopted.
Nevertheless, the Treasury
Department and the IRS are sensitive to
the commenter’s concerns. In addition,
it is in the IRS’s interest to review lists
furnished by material advisors in a
timely manner so that information
contained on the lists can be used as
intended to assist the IRS in identifying
taxpayers who participated in abusive
and potentially abusive tax shelters.
Therefore, the IRS will take reasonable
steps to timely review lists and notify
material advisors of identified failures
in a timely manner.
B. Omissions From the List
In Example 1 of proposed § 301.6708–
1(h)(3), a supervisor within the material
advisor organization carefully reviewed
the list before furnishing it to the IRS,
and in Example 3 of proposed
§ 301.6708–1(h)(3), a supervisor within
the material advisor organization did
not review the list. One commenter
suggested that these examples be
modified or supplemented to eliminate
what the commenter perceived to be an
implication that review of a list by a
supervisor within the material advisor
organization would reasonably be
expected to detect omissions from the
list and to specify that a material
advisor can demonstrate reasonable
cause for omitting a transaction or
advisee even if a supervisor’s review did
not identify the omissions. While
agreeing that review of the list before
submission to the IRS is appropriate, the
commenter stated that this review
should not be a factor in determining
whether a material advisor had
reasonable cause.
The commenter also suggested that in
many cases in which a material advisor
omits a transaction or advisee from a
list, the omission may be due to a
mistaken application of the reportable
transaction rules or an inadvertent
failure. The commenter observed that

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while three of the examples in proposed
§ 301.6708–1(g) and (h) involve the
omission of specific advisees from a list,
none of these examples involves a
finding that the material advisor had
reasonable cause. The commenter
suggested adding an example to either
proposed subsection (g) or (h) in which
the material advisor had reasonable
cause for omitting the transaction or
advisee from the list.
In looking at all of the facts and
circumstances surrounding a material
advisor’s efforts to comply with section
6112, review of the list by a supervisor
or some other person of authority or
experience within the material advisor
organization before submission of the
list to the IRS is merely one factor to be
taken into account to determine whether
the material advisor has demonstrated
reasonable cause. A failure to detect
omissions or other failings in the list
does not preclude a finding of
reasonable cause. That point is already
set forth in Example 1 of proposed
§ 301.6708–1(h)(3), in which the
supervisor’s review of the list did not
detect that the material advisor had
furnished a draft copy of a tax opinion
rather than the final document, but
under the facts stated in the example,
the material advisor was found to have
reasonable cause.
However, to eliminate any confusion
and to respond to the concerns
expressed by the commenter, a new
Example 5 has been added to
§ 301.6708–1(h)(3), in which the
supervisor’s review of the list did not
detect that the material advisor had
omitted a transaction from the list, and
under the facts stated in the example,
the material advisor was found to have
reasonable cause.
6. Comment Relating to Administrative
Review
One commenter recommended that
the regulations provide for
administrative review in IRS Appeals of
all issues pertaining to the applicability
and amount of the penalty, including
whether an extension should have been
granted and whether reasonable cause
exists, before paying the penalty. There
are currently administrative procedures
providing material advisors with an
opportunity for prepayment review of
the penalty by Appeals. See IRM
4.32.2.11.7.2. Under those procedures,
the material advisor has 30 days from
the date of receipt of the notice and
demand for payment of the section 6708
penalty to request administrative review
by IRS Appeals. A material advisor does
not have to pay any portion of the
section 6708 penalty as a condition of
requesting administrative review.

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Therefore, because the IRM already
provides the material advisor with an
opportunity for administrative review of
the assessment of the penalty prior to
payment, this comment was not
adopted.
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a
regulatory assessment is not required. It
also has been determined that section
553(b) of the Administrative Procedure
Act (5 U.S.C. chapter 5) does not apply
to these regulations.
It is hereby certified that the
collection of information in these
regulations will not have a significant
economic impact on a substantial
number of small entities. This
certification is based on the fact that the
collection of information described
under the heading ‘‘Paperwork
Reduction Act’’ only affects persons
who qualify as material advisors as
defined in section 6111, who are
statutorily required by section 6112 to
maintain and furnish the underlying
documents and information upon which
the collection of information is based,
and who are unable to meet the section
6708 statutorily provided period of time
for furnishing these documents and
information. Moreover, the collection of
information is voluntary to receive a
benefit and requiring those persons to
report the information described above
imposes only a minimal burden in time
or expense. Therefore, a Regulatory
Flexibility Analysis under the
Regulatory Flexibility Act (5 U.S.C.
Chapter 6) is not required.
Pursuant to section 7805(f) of the
Internal Revenue Code, the notice of
proposed rulemaking preceding the
final regulations was submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business, and no
comments were received.
Drafting Information
The principal author of these
regulations is Hilary March of the Office
of the Associate Chief Counsel
(Procedure and Administration).
List of Subjects in 26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 301 is
amended as follows:

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PART 301—PROCEDURE AND
ADMINISTRATION
Paragraph 1. The authority citation
for part 301 is amended by adding an
entry in numerical order to read in part
as follows:

■

Authority: 26 U.S.C. 7805 * * *
Section 301.6708–1 also issued under 26
U.S.C. 6708 * * *

Par. 2. Section 301.6708–1 is added to
read as follows:

■

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§ 301.6708–1 Failure to maintain lists of
advisees with respect to reportable
transactions.

(a) In general. Any person who is
required to maintain a list under section
6112 who, upon written request for the
list, fails to make the list available to the
Secretary within 20 business days after
the date of the request shall be subject
to a penalty in the amount of $10,000
for each subsequent calendar day on
which the person fails to furnish a list
containing the information and in the
form required by section 6112 and its
corresponding regulations. The penalty
will not be imposed on any particular
day or days for which the person
establishes that the failure to comply on
that day is due to reasonable cause.
(b) Calculation of the 20-business-day
period. The 20-business-day period
shall begin on the first business day
after the earliest of the date that the
IRS—
(1) Mails a request for the list required
to be maintained under section 6112(a)
by certified or registered mail to the
person required to maintain the list;
(2) Hand delivers the written request
to the person required to maintain the
list; or
(3) Leaves the written request with an
individual 18 years old or older at the
usual place of business of the person
required to maintain the list.
(c) Making a list available. (1) A
person who is required to maintain a list
required by section 6112 may make the
list available by mailing or delivering it
to the IRS within 20 business days after
the date of the list request. Section 7502
and the regulations thereunder shall
apply to this section.
(2) A person who is required to
maintain a list required by section 6112
may also make the list available to the
IRS by making it available for inspection
and copying during normal business
hours, as provided by section 6112, or
by another agreed-upon method, on an
agreed-upon date that falls within the
20-business-day period following the
list request.
(3) Extension—(i) In general. Upon a
showing of good cause by the person
prior to the expiration of the 20-

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business-day period following a list
request, the IRS may, in its discretion,
agree to extend the period within which
to make all or part of the list available.
For purposes of this paragraph, ‘‘good
cause’’ is shown if the person
establishes that the 20-business-day
deadline cannot reasonably be met
despite diligent efforts by the person to
maintain the materials constituting a list
and to make that list available to the IRS
in the time and manner required by the
Secretary under section 6112.
(ii) Requesting an extension. Any
request for an extension of the 20business-day period must be made in
writing to the person at the IRS who
requested the list. The person requesting
an extension must briefly describe the
information and documents that
comprise the list as required by section
6112; explain the circumstances that
would warrant additional time; propose
a schedule to complete the production
of the list; state that to the best of the
person’s knowledge, as of the date of the
list request, all information and records
relating to the list under the person’s
possession, custody, or control had been
maintained in accordance with
procedures and policies that are
consistent with sections 6001 and 6112
of the Internal Revenue Code; and state
that the extension request is not being
made to avoid the person’s list
maintenance obligations imposed by
section 6112 and its corresponding
regulations. The IRS may, in its
discretion, grant the person’s extension
request in full or in part. The IRS will
consider whether granting an extension
may impair its ability to make a timely
assessment against any of the
participants in the transaction
associated with the requested list. The
IRS will not grant an extension if it
determines that a significant reason for
the extension request is to delay
producing the list. A pending extension
request by itself does not constitute
reasonable cause for purposes of section
6708.
(4) Examples. The following examples
illustrate paragraph (c)(3)(i) and (ii) of
this section. These examples are
intended to illustrate how the facts and
circumstances in paragraph (c)(3)(i) and
(ii) of this section may apply; in any
given case, however, all of the facts and
circumstances must be analyzed.
Example 1. (i) Firm A is a large law firm
that is a material advisor. Firm A conducts
annual sessions to educate its professionals
about reportable transactions and the firm’s
obligations related to those reportable
transactions. Firm A instructs its
professionals to provide information on tax
engagements that involve reportable
transactions and to provide the documents

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required to be maintained under sections
6001 and 6112 to Firm A’s compliance officer
for list maintenance purposes. Firm A’s
policy provides that, for each engagement
involving a reportable transaction, one firm
professional will send an email to the firm’s
compliance officer about the engagement and
then direct a subordinate to send the
documents required to be maintained to the
firm’s compliance officer. Firm A has
policies and procedures in place to monitor
compliance with these rules and to address
non-compliance.
(ii) Firm A receives a request from the IRS
for a section 6112 list. In compiling its list
to turn over to the IRS during the 20business-day period following the list
request, Firm A discovers that, with respect
to one reportable transaction, a subordinate
did not provide the documentation required
by Firm A’s policy. In addition, Firm A
experiences difficulty locating the required
documents as both the professional and the
subordinate who worked on the matter are no
longer employed by Firm A, requiring the
firm to undertake an extensive search for the
information responsive to the list request.
Firm A also seeks the information from the
firm’s clients. Despite these efforts, Firm A
reasonably determined that it will not be able
to respond timely to the request. Within the
20-business-day period, Firm A notifies the
IRS, in writing, of the difficulties it is
experiencing and requests an additional 10
business days to locate and produce the
information for this one transaction. Within
the 20-business-day period, Firm A makes all
other required list information available to
the IRS, together with a description of the
information that is being searched for, all
statements required by these regulations, and
a proposed schedule to produce the missing
information.
(iii) Under these circumstances, Firm A
demonstrated that it could not reasonably
make the portion of the list relating to the
one transaction available within the 20business-day period and thus qualified for an
extension. Firm A had established policies
and procedures reasonably designed and
implemented to ensure and monitor
compliance with the requirements of section
6112 and address non-compliance. Because
the facts and circumstances indicate that
Firm A made diligent efforts to maintain the
materials constituting the list in a readily
accessible form and as otherwise required
under section 6112, the requested 10business-day extension with respect to the
portion of the list relating to the one
transaction where records were not
maintained in accordance with the firm’s
policies and procedures should be granted.
Example 2. (i) Assume the same facts set
forth in example one, except that, in the
process of compiling the list to comply with
the list maintenance request, Firm A first
becomes aware that a firm professional did
not send an email to the firm’s compliance
officer about a transaction subject to the list
maintenance request and did not direct a
subordinate to send to the firm’s compliance
officer the information required to be
maintained with respect to the transaction.
Assume further that Firm A had a robust
section 6112 compliance monitoring program

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in place and despite this, the firm did not
know that the professional did not follow
firm policies and procedures with respect to
this transaction. The professional who
worked on the matter is no longer employed
by Firm A, causing Firm A difficulty in
locating the required information and in
ascertaining whether the professional in
question failed to comply with Firm A’s list
maintenance policies with respect to any
other reportable transactions. Firm A is
searching its records to locate information
responsive to the list request and to ensure
that no other reportable transactions were
omitted from the list. Firm A estimates that
it will take an additional 20 business days
after the 20th business day to retrieve the
missing information and provide IRS with
the additional information responsive to the
list request. Within the 20-business-day
period, Firm A notifies the IRS, in writing,
of the difficulties it is experiencing and
requests an additional 20 business days to
locate and produce the information for this
one transaction and for any other reportable
transactions omitted from the list as a result
of the inaction by the professional in
question. Within the 20-business-day period,
Firm A makes all other required list
information available to the IRS, together
with a description of the information that is
being searched for, all statements required by
these regulations, and a proposed schedule to
produce the missing documents.
(ii) Under these facts and circumstances,
Firm A demonstrated that it could not
reasonably, within the 20-business-day
period, make available the portion of the list
relating to one or possibly more transactions
omitted from the list because of the inaction
of the professional in question. Firm A
therefore qualifies for an extension. Firm A
had established policies and procedures
reasonably designed and implemented to
ensure and monitor compliance with the
requirements of section 6112 and address
non-compliance. Because the facts and
circumstances indicate that Firm A made
diligent efforts to maintain the materials
constituting the list in a readily accessible
form and as otherwise required under section
6112, the requested 20-business-day
extension with respect to the portion of the
list relating to the one known omitted
transaction and to any other omitted
reportable transactions resulting from the
inaction of the professional in question
should be granted.

(d) Failure to make list available. A
failure to make the list available
includes any failure to furnish the
requested list to the IRS in a timely
manner and in the form required under
section 6112 and its corresponding
regulations. Examples of failures to
make a list available include instances
in which a person fails to furnish any
list; furnishes an incomplete list; or
furnishes a list, whether or not
complete, after the time required by this
section.
(e) Computation of penalty—(1) In
general. The penalty imposed by section
6708 accrues daily, beginning on the

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first calendar day after the expiration of
the 20-business-day period following a
written list request, and continues for
each calendar day thereafter until the
person’s failure to furnish a list in the
form required by section 6112 and its
corresponding regulations ends. If the
list is delivered or mailed to the IRS
outside of the 20-business-day period,
the penalty shall not apply on the day
the list is delivered to the IRS or, if the
list is mailed, the day the list is received
by the IRS.
(2) Computation of penalty after grant
of extension. If the IRS grants an
extension of the 20-business-day period
pursuant to paragraph (c)(3) of this
section, the penalty imposed by section
6708 accrues daily, beginning on the
first calendar day after the extension
period expires, and continues for each
calendar day thereafter until the
person’s failure to furnish a list in the
form required by section 6112 and its
corresponding regulations ends. If the
list is delivered or mailed to the IRS
outside of the period of extension, the
penalty shall not apply on the day the
list is delivered to the IRS or, if the list
is mailed, the day the list is received by
the IRS.
(3) Designation agreements and
concurrent application of penalty. If
material advisors with respect to the
same reportable transaction enter into a
designation agreement pursuant to
section 6112(b)(2) and § 301.6112–1(f),
separate penalties will be imposed on
designated material advisors and
nondesignated material advisors who
are parties to the designation agreement
for their respective periods of failure or
noncompliance with a list request. A
penalty will continue to accrue against
a material advisor who is a party to a
designation agreement until such time
when a list complying with the
requirements of section 6112 and its
corresponding regulations is furnished
by that material advisor or any other
material advisor who is a party to the
designation agreement.
(4) Example. The following example
illustrates paragraph (e) of this section.
Example. The IRS hand delivers a written
request for the list required to be maintained
under section 6112 to Firm B, a material
advisor, on Friday, March 10, 2017. Firm B
must make the list available to the IRS on or
before Friday, April 7, 2017, the 20th
business day after the request was hand
delivered. If Firm B fails to make the list
available to the IRS by that day, absent
reasonable cause or the IRS’s grant of an
extension of the response time, the $10,000per-day penalty begins on Saturday, April 8,
2017. The $10,000 per day penalty will
continue for each subsequent calendar day
until Firm B makes the complete list
available, except for those days for which

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Firm B demonstrates reasonable cause. If
Firm B hand delivers a complete copy of the
requested list to the IRS on the morning of
Tuesday, April 11, 2017, absent reasonable
cause or the IRS’s prior grant of an extension
for the response time, a penalty of $30,000
will be imposed upon Firm B (for April 8, 9,
and 10). See paragraphs (g) and (h) of this
section for an explanation of reasonable
cause.

(f) Definitions. For purposes of this
section, the following definitions apply:
(1) Material advisor means a person
described in section 6111 and
§ 301.6111–3(b).
(2) Business day means every
calendar day other than a Saturday,
Sunday, or legal holiday within the
meaning of section 7503.
(3) Reportable transaction means a
transaction described in section
6707A(c)(1) and section 1.6011–4(b)(1).
(4) Listed transaction means a
transaction described in section
6707A(c)(2) and § 1.6011–4(b)(2) of this
chapter.
(g) Reasonable cause—general
applicability—(1) Overview. The section
6708 penalty will not be imposed for
any day or days for which the person
shows that the failure to make a
complete list available to the IRS was
due to reasonable cause. The
determination of whether a person had
reasonable cause is made on a case-bycase and day-by-day basis, taking into
account all the relevant facts and
circumstances. Facts and circumstances
relevant to a material advisor’s
reasonable cause for failing to make
available the list on a specific day
include facts and circumstances arising
after the request for the list. The
person’s showing of reasonable cause
should relate to each specific day or
days for which the person failed to
make available the requested list.
Factors establishing reasonable cause
include, but are not limited to, factors
identified in paragraphs (g) and (h) of
this section.
(2) Good-faith factors. The most
important factors to establish reasonable
cause are those that reflect the extent of
the person’s good-faith efforts to comply
with section 6112. The following
factors, which are not exclusive, will be
considered in determining whether a
person has made a good-faith effort to
comply with the section 6112
requirements:
(i) The person’s efforts to determine or
assess its status as a material advisor as
defined by section 6111;
(ii) The person’s efforts to determine
the information and documentation
required to be maintained under section
6112;
(iii) The person’s efforts to meet its
obligations to maintain a readily

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producible list as required by section
6112;
(iv) The person’s efforts, upon
receiving the list request, to make the
list available to the IRS within the 20business-day period (or extended
period) under paragraphs (a), (b), and
(c)(3) of this section; and
(v) The person’s efforts to ensure that
the list furnished to the IRS is accurate
and complete.
(3) Ordinary business care. The
exercise of ordinary business care may
constitute reasonable cause. To show
ordinary business care, the person may,
for example, show that the person
established, and adhered to, procedures
reasonably designed and implemented
to ensure compliance with the section
6112 requirements. In all instances
when ordinary business care is claimed
as constituting reasonable cause, a
person must show that the person took
immediate steps, upon discovering any
failure relating to the list, to correct the
failure. A person’s failure to take
immediate steps to correct a failure
related to the list upon discovering the
failure is a factor weighing against a
conclusion that the person exercised
ordinary business care. Notwithstanding
the occurrence of an isolated and
inadvertent failure, a person still may be
able to demonstrate that the person
exercised ordinary business care,
considering all the relevant facts and
circumstances, but only if the person
had established and adhered to
procedures reasonably designed and
implemented to ensure compliance with
the section 6112 requirements.
(4) Supervening events. A person may
establish reasonable cause for one or
more days for which, considering all the
relevant facts and circumstances, the
failure to timely furnish the list required
by section 6112 was due solely to a
supervening event beyond the person’s
control. Events beyond a person’s
control may include fire, flood, storm,
or other casualty; illness; theft; or other
similarly unexpected event that
damages or impairs the person’s
relevant business records or system for
processing and providing these records,
or that affects the person’s ability to
maintain the section 6112 list or make
it available to the IRS. Reasonable cause
may be established only for the period
that a person who exercised ordinary
business care would need to provide the
list from alternative records in
existence, or make the list available,
under the specific facts and
circumstances.
(5) Reliance on opinion or advice—(i)
In general. A person may rely on an
independent tax professional’s advice to
establish reasonable cause. The reliance,

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however, must be reasonable and in
good faith, in light of all the other facts
and circumstances. For a person to be
considered to have relied on the advice,
the advice must have been received by
the person before the date the list is
required to be made available to the IRS.
If the person received advice from an
independent tax professional, the
person’s reliance on that advice will be
considered reasonable only if the
independent tax professional reasonably
believed that it is more likely than not
that the person does not have an
obligation imposed by section 6112. For
example, this advice may conclude that
the person is not a material advisor; that
the transaction upon which the person
provided material aid, assistance, or
advice is not a reportable transaction for
which a list was required to be
maintained as of the date of the advice;
that the information and documents to
be produced constitute the required list;
or that the information or documents
withheld by the person are not required
to be produced. The advice must also
take into account and consider all
relevant facts and circumstances, not
rely on unreasonable legal or factual
assumptions, not rely on or take into
account the possibility that a list request
may not be made, and not rely on
unreasonable representations or
statements of the person seeking the
advice. Advice from a tax professional
who is not independent may be
considered in determining reasonable
cause if, in light of and in relation to all
the other facts and circumstances,
taking into account such advice is
reasonable. However, by itself, advice
from a tax professional who is not
independent is not sufficient to
establish reasonable cause. Independent
tax professional advice is not required
to establish reasonable cause and the
failure to obtain advice from an
independent tax professional does not
preclude a finding of reasonable cause
if, based on the totality of all of the
relevant facts and circumstances,
reasonable cause has been established.
(ii) Independent tax professional. For
purposes of this section, an independent
tax professional is a person who is
knowledgeable in the relevant aspects of
Federal tax law and who is not a
material advisor with respect to the
specific transaction that is the subject of
the list request. For advice related to a
listed transaction, a person who is a
material advisor with respect to any
transaction that is the same as or
substantially similar to the type of
transaction that is the subject of the list
request will not be considered an
independent tax professional.

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(6) Examples. The following examples
illustrate this paragraph (g). These
examples are intended to illustrate how
the facts and circumstances in
paragraphs (g)(2) through (g)(5) of this
section may apply; in any given case,
however, all of the facts and
circumstances must be analyzed.
Example 1. On August 11, 2017, the IRS
sends a list request via certified mail to Firm
C, a material advisor. Firm C consists of a
sole practitioner, X, who is away from the
office on vacation on this date. X has
arranged for a colleague, Y, to review Firm
C’s mail, email, and telephone messages
daily during his absence. X returns to the
office the day after his vacation ends, on
September 5, 2017, and immediately contacts
the IRS to notify it of his absence. Firm C
makes a complete list available to the IRS on
September 19, 2017, 10 business days after
he has returned from vacation. Firm C
establishes that X was on vacation at the time
the list request was sent to Firm C, and Firm
C promptly furnished the requested list in a
manner and time period reflecting ordinary
business care and prudence upon X’s return
to the office. Under these circumstances,
Firm C is considered to have made a goodfaith effort to comply with the section 6112
requirements. Firm C has established
reasonable cause for the entire period
between the expiration of the 20-businessday period following the list request and the
date the list was made available to the IRS.
See paragraphs (g)(2) and (3) of this section.
Example 2. On March 3, 2017, the IRS
hand delivers to Firm D, a material advisor,
a list request related to a transaction believed
by the IRS to have been implemented in
November 2008 by a group of Firm D’s
clients (the advisees). Firm D’s involvement
in the transaction included implementing the
transaction on behalf of some but not all of
the advisees. Firm D timely makes the
requested list available to the IRS. Upon
review, the IRS determines that the
information furnished by Firm D appears to
be accurate, but the IRS believes that some
of the information is incomplete because it
does not contain information about certain
individuals who were identified through
other investigative means as Firm D’s clients
who may have engaged in the transaction. In
response to a follow-up inquiry by the IRS,
Firm D establishes, however, that it is not a
material advisor with respect to these
taxpayers. Under these circumstances, Firm
D has furnished the list as required by
section 6112. Because the list was complete
when furnished, Firm D need not make a
showing of reasonable cause. See paragraph
(g)(1) of this section.
Example 3. The IRS sends a list request
by certified mail to Firm E, a material
advisor. Firm E maintains the materials
responsive to the list request on a portable
data storage device. Under Firm E’s
established procedures for maintaining
section 6112 lists, once the transaction is
completed, paper documents are scanned
and saved electronically according to Firm
E’s records management procedures. Under
Firm E’s records management procedures,
after the scanning process is completed, Firm

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E sends the paper documents to an off-site
storage facility. Three days before the 20th
business day following the date of the written
request, the electronic data is permanently
destroyed. Firm E contacts the IRS
representative listed as a contact person on
the section 6112 list request to advise him
that the relevant data was permanently
destroyed. Firm E establishes that it
exercised ordinary business care but that the
data was nevertheless destroyed due to
circumstances outside of its control. Under
these circumstances, Firm E has reasonable
cause for the period of time that Firm E
cannot respond to the list request due to
circumstances out of Firm E’s control. The
reasonable cause exception, however, will
only be available to Firm E for the period of
time that a person who exercises ordinary
business care would need to obtain the
materials that are part of the list, including
in this case paper documents from the off-site
storage facility, and furnish the list to the
IRS. See paragraphs (g)(3) and (4) of section.
Example 4. On February 2, 2017, the IRS
hand delivers a list request to Firm F, a
material advisor. Firm F filed with the IRS
the disclosure statement required by section
6111 for the reportable transaction that is the
subject of the list request but did not
maintain the section 6112 list documentation
in a readily accessible format after filing the
section 6111 statement. On March 3, 2017,
the 20th business day (due to the Presidents’
Day holiday) after the list request is delivered
to Firm F, Firm F contacts the IRS to ask for
additional time to comply with the list
request, stating that it could not gather the
list information together in 20 business days.
Because Firm F is not able to show that it
made diligent efforts to maintain the
materials constituting the list in a readily
accessible form, the IRS should not grant
Firm F an extension of time. See paragraph
(c)(3) of this section. Further, Firm F does not
have reasonable cause because it has failed
to demonstrate a good-faith effort to comply
with the section 6112 requirements and
ordinary business care. See paragraphs (g)(2)
and (3) of this section.
Example 5. On August 11, 2017, the IRS
sends a list request, via certified mail, to
Firm G, a material advisor. Firm G consists
of a sole practitioner, P. Firm G maintains the
materials responsive to the list request
electronically. Generally, under Firm G’s
records management procedures, once a
transaction is completed, the documents
related to that transaction are scanned and
then saved electronically consistent with IRS
guidance on maintaining books and records
in electronic form. P is aware of the list
request but ignores it. On September 24,
2017, the 13th calendar day after the 20business-day period following the list request
(due to the Labor Day holiday), P suffers a
temporary but debilitating illness that lasts
22 days. Following the illness, P immediately
returns to work. After returning to work, P
continues to ignore the list request. In this
situation, the facts and circumstances
indicate that Firm G does not have
reasonable cause for any day in which there
was a failure to make the list available to the
IRS, including the 22 days due to the
intervening event, because the failure was

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not due solely to the supervening event
occurring on September 24, 2017. Firm G did
not make a good-faith effort to make the list
available to the IRS before or after the
supervening event occurred. Firm G is liable
for the $10,000 per day penalty from the first
day following the expiration of the 20business-day period until but not including
the day that Firm G furnishes the list to the
IRS. See paragraphs (g)(2) and (4) of this
section.
Example 6. On August 11, 2017, the IRS
sends a list request, via certified mail, to
Firm H, a material advisor. Firm H, consists
of a sole practitioner, P. Firm H maintains the
materials responsive to the list request
electronically. Generally, under Firm H’s
records management procedures, once the
transaction is completed, the documents are
scanned and then saved electronically
consistent with IRS guidance on maintaining
books and records in electronic form. P is
aware of the list request and begins
compiling the documents to respond to the
IRS within the 20-business-day period
ending on September 11, 2017 (due to the
Labor Day holiday). Before responding to the
list request, P suffers a temporary but
debilitating illness on September 3, 2017,
that lasts through September 19, 2017. Upon
returning to work on September 20, 2017, P
contacts the IRS to explain that P
experienced a temporary but debilitating
illness from September 3, 2017, through
September 19, 2017, and that P has returned
to the office and intends to furnish the list
to the IRS within a short period of time. Firm
H furnishes the list to the IRS on September
22, 2017. In this situation, the facts and
circumstances indicate that Firm H has
reasonable cause for the period from
September 12, 2017 until September 21,
2017, attributable to P’s illness. The failure
to furnish the list in a timely fashion was
solely attributable to the supervening event
occurring on September 3, 2017, and Firm H
promptly furnished the requested list in a
manner and time period reflecting ordinary
business care upon P’s return to the office.
Firm H is considered to have made a goodfaith effort to comply with the section 6112
requirements. Firm H has established
reasonable cause for the entire period
between the expiration of the 20-businessday period following the list request and the
date Firm H furnished the list to the IRS. See
paragraphs (g)(2) and (4) of this section.
Example 7. Firm I receives a list request
for transactions that are the same or
substantially similar to the listed transaction
described in Notice 2002–21, 2002–1 CB 730.
Firm I will be considered a material advisor
with respect to a particular transaction for
which it provided advice if the transaction is
the same as or substantially similar to the
transaction described in Notice 2002–21.
Firm I, however, is unsure whether the
transaction is the same as or substantially
similar to the transaction described in this
Notice. Firm I obtains an opinion from Firm
L, a law firm, on this issue. P, a partner in
Firm L, provided tax advice to clients who
invested in other Notice 2002–21
transactions, including how to report the
purported tax benefits from the transaction
on their income tax returns, and Firm L is a

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25337

material advisor with respect to those
transactions. Because Firm L is a material
advisor with respect to the type of
transaction that is the same as or
substantially similar to the transaction
described in Notice 2002–21, Firm L is not
considered an independent tax professional
under paragraph (g)(5)(ii) of this section.
Therefore, Firm I cannot rely on advice
provided by Firm L to establish reasonable
cause under this paragraph (g). The IRS may
consider Firm L’s advice in determining
reasonable cause in light of other facts and
circumstances, but Firm L’s advice, without
more, is not sufficient to establish reasonable
cause because P is not an independent tax
professional under paragraph (g)(5)(ii) of this
section.
Example 8. Firm J, a law firm, provides
advice to various clients of the firm regarding
the potential tax benefits of a reportable
transaction under § 1.6011–4(b)(5) of this
chapter (involving a section 165 loss) and is
a material advisor with respect to that
transaction. Firm J also provides advice to
Firm M, an accounting firm, regarding the
same transaction. Firm M then advises
various Firm M clients regarding this same
transaction, and is a material advisor. The
transaction is not a listed transaction. Firm
N, a law firm that is not associated with Firm
J and has not provided advice with respect
to the same transaction to Firm M, has
provided advice to its own clients regarding
other transactions subject to § 1.6011–4(b)(5)
of this chapter, but not the particular
transaction that was the subject of Firm J’s
advice to Firm M. The IRS hand delivers a
list request to Firm M, the subject of which
is the transaction regarding which Firm J
provided advice to Firm M. Before the
expiration of the 20-business-day period,
Firm M seeks advice from Firm J and Firm
N about the propriety of withholding certain
documents related to the transaction.
Because Firm J provided advice with respect
to the particular transaction that is the
subject of the list request, Firm J is not an
independent tax professional under
paragraph (g)(5)(ii) of this section. Although
Firm N has provided advice on a transaction
that is considered a reportable transaction
under § 1.6011–4(b)(5) of this chapter, Firm
N is considered to be an independent tax
professional under paragraph (g)(5)(ii) of this
section because Firm N did not provide
material assistance with respect to the
particular transaction that is the subject of
the list request.

(h) Reasonable cause—special
considerations—(1) Material advisor no
longer in existence. If a material advisor
has dissolved, been liquidated, or
otherwise is no longer in existence, the
person required by section 6112 to
maintain the list (the ‘‘responsible
person’’) is subject to the penalty for
failing to make the list available. In
considering whether a responsible
person or successor in interest has
reasonable cause for any failure to
timely make the list available to the IRS,
the IRS will consider all of the facts and
circumstances, including those facts and

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circumstances relating to the
dissolution, liquidation, and winding
up of the original material advisor’s
business and any efforts the original
material advisor made to comply with
the section 6112 requirements before the
dissolution or liquidation. When
appropriate or applicable, due diligence,
if any, performed by a responsible
person or successor in interest will be
considered, and due consideration will
be given for acts taken by that person to
minimize the potential for violating the
section 6112 requirements.
(2) Review by IRS. Whether reasonable
cause exists for a period of time will be
determined based on all the relevant
facts and circumstances, including facts
and circumstances arising after the
request for the list. If a material advisor
establishes that, in its efforts to comply
with the provisions of section 6112 and
its corresponding regulations, it acted in
good faith, as defined in paragraph (g)(2)
of this section, the material advisor will
be deemed to have reasonable cause for
the periods of time the IRS takes to
review a furnished list for compliance
with the section 6112 requirements and
to inform the material advisor of any
identified failures in the list. If the
material advisor does not establish that
it acted in good faith the IRS will not
consider the time it takes to review the
list or inform the material advisor of
identified failures as a factor in
determining whether the material
advisor has reasonable cause for that
period.
(3) Examples. The following examples
illustrate paragraph (h)(2) of this
section.
Example 1. On February 2, 2017, the IRS
hand delivers a list request to Firm O, a
material advisor. On March 3, 2017, the 20th
business day (due to the Presidents’ Day
holiday) after the list request is delivered to
Firm O, Firm O sends a list to the IRS that
was contemporaneously prepared after Firm
O issued advice with respect to the
reportable transaction and continuously
maintained in accordance with the
requirements of section 6112 and the related
regulations. Before sending the list, a
supervisor at Firm O carefully reviewed the
list to verify that it was comprehensive and
accurate. The IRS completes its review on
March 23, 2017, and determines that the list
is not complete because Firm O furnished a
draft copy of the tax opinion, rather than the
final document, which Firm O had
mistakenly misfiled. After Firm O is notified
of the missing information, Firm O
immediately furnishes a complete copy of the
final version of the tax opinion. Firm O made
a good-faith effort to comply with the section
6112 requirements, including its efforts to
ensure that the list that was furnished to the
IRS was accurate and complete. Firm O has
reasonable cause for the entire period
between the expiration of the 20-business-

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day period following the list request and the
date it furnished the complete list to the IRS.
Example 2. On February 2, 2017, the IRS
hand delivers a list request to Firm P, a
material advisor. Firm P’s involvement in the
reportable transaction included
implementing the transaction on behalf of
some but not all of Firm P’s clients. On
March 3, 2017, the 20th business day (due to
the Presidents’ Day holiday) after the list
request is delivered to Firm P, Firm P sends
the list to the IRS. The IRS completes its
review on March 23, 2017. The IRS believes
the client list is incomplete because it does
not contain information about certain
individuals who were identified through
other investigative means as clients of Firm
P who may have engaged in the transaction.
On March 27, 2017, in response to a followup inquiry by the IRS, Firm P establishes that
it is not a material advisor with respect to
these taxpayers. Therefore, the March 3, 2017
list was complete and accurate when first
furnished. Under these circumstances, Firm
P has timely furnished the list as required by
section 6112. Because Firm P complied with
the requirements of section 6112 no penalty
applies, and Firm P does not need to
establish reasonable cause for the period
from March 4, 2017, through March 27, 2017,
when the IRS was reviewing the list.
Example 3. On February 2, 2017, the IRS
hand delivers a list request to Firm Q, a
material advisor. On March 3, 2017, the 20th
business day (due to the Presidents’ Day
holiday) after the list request is delivered to
Firm Q, Firm Q sends the list to the IRS. Firm
Q had not maintained a list
contemporaneously after issuing the advice
with respect to the reportable transaction,
and created the list during the 20 business
days before providing the list to the IRS. To
meet the 20-business-day deadline, a
supervisor did not review the final list before
sending it to the IRS. The IRS completes its
review on March 23, 2017, and determines
that the list is not complete because it does
not include 15 persons for whom Firm Q
acted as a material advisor with respect to the
reportable transaction. Firm Q furnishes the
additional information on March 27, 2017.
Because Firm Q is not able to show that it
made diligent efforts to maintain the
materials constituting the list in a readily
accessible form and that it made a reasonable
effort to ensure that the list that was
furnished to the IRS was accurate and
complete, Firm Q cannot establish that it
exhibited a good-faith effort to comply with
the section 6112 requirements. Firm Q does
not have reasonable cause for its failure to
furnish the complete list from March 4, 2017,
through March 26, 2017.
Example 4. Within the 20-business-day
period following a list request, Firm R sends
four boxes of documents comprising the
required list to the IRS using a commercial
delivery service. The IRS receives only three
of the boxes because box 4 was erroneously
self-addressed using Firm R’s office address.
Box 4 arrives at Firm R’s office on January
6, 2017, the 2nd calendar day after the 20th
business day after the list request was made.
Firm R immediately recognizes its clerical
error, promptly contacts the IRS, and resends
the original and unopened box 4, properly

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addressed, to the IRS together with
documentation supporting the error. The IRS
receives box 4 on January 9, 2017. Under
these circumstances, Firm R has reasonable
cause for the late delivery of box 4 because
it made a good-faith attempt to timely
comply with the list request and immediately
corrected an inadvertent error upon its
discovery. As a result, no penalty will be
imposed based on the delay in providing box
4. If, after inspection, the IRS determines
that, even with the contents of box 4, the list
is incomplete or defective, Firm R must
establish reasonable cause for the incomplete
nature of the list or the defect to avoid
imposition of a penalty for the period
beginning January 5, 2017, until but not
including the day that Firm R furnishes the
list to the IRS.
Example 5. (i) Firm S is a large law firm
that is a material advisor. Firm S conducts
annual sessions to educate its professionals
about reportable transactions and the firm’s
obligations related to those reportable
transactions. Firm S instructs its
professionals to provide information on tax
engagements that involve reportable
transactions and to provide the documents
required to be maintained under section 6112
to Firm S’s compliance officer for list
maintenance purposes. Firm S’s policy
provides that, for each engagement involving
a reportable transaction, one firm
professional will send an email to the firm’s
compliance officer about the engagement and
then direct a subordinate to send to the firm’s
compliance officer the documents required to
be maintained.
(ii) Firm S receives a request from the IRS
for a section 6112 list. In compiling its list
to turn over to the IRS during the 20business-day period, Firm S asks all
professionals to ensure that they have
reported all engagements involving a
reportable transaction to the firm’s
compliance officer. Before submission to the
IRS, a Firm S supervisor reviews the list to
ensure completeness. Firm S has no reason
to know of any deficiencies, and in
compiling its list, Firm S discovers no
deficiencies.
(iii) Upon review of the list, the IRS
determines that the information furnished by
Firm S appears to be accurate, but the IRS
believes that some of the information is
incomplete because it does not contain
information about an individual who may
have engaged in the transaction and who was
identified through other investigative means
as Firm S’s client. In response to a followup inquiry by the IRS, Firm S immediately
reviews its files and discovers that a former
Firm S professional, who is no longer
employed by Firm S, provided material
advice to the individual with respect to
carrying out a reportable transaction, but did
not send an email to the firm’s compliance
officer about the transaction or direct a
subordinate to send the documents required
to be maintained to the firm’s compliance
officer. Firm S immediately furnishes the
missing information and documents related
to the identified omission to the IRS.
(iv) Firm S establishes that the professional
in question ordinarily complied with Firm
S’s list maintenance procedures and that

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Firm S had no reason to know of this one
omission or to suspect that the professional
had failed to report any reportable
transactions to the firm’s compliance officer
in accordance with the firm’s policies. Firm
S also immediately undertakes a thorough
search of its electronic and paper files to
locate any additional reportable transactions
relating to the professional in question that
may have been omitted from the list. Under
these circumstances, Firm S has
demonstrated that it has acted in good faith
in its efforts to comply with section 6112 and
is deemed to have reasonable cause for the
period of time the IRS took to review the
furnished list and to inform the material
advisor of the identified failure in the list.
See paragraph (h)(2) of this section. The
reasonable cause exception, however, will
only be available to Firm S with respect to
the omission identified by the IRS for the
period of time that a person who exercises
ordinary business care would need to obtain
the information and documents related to the
identified omission. See paragraph (g)(3) of
this section. With respect to any other
omissions related to the same professional
and not identified by the IRS, the reasonable
cause exception will only be available to
Firm S for the period of time that a person
who exercises ordinary business care would
need to ascertain whether any other
reportable transactions were omitted from the
list and to obtain the information and
documents related to any such omissions.
See paragraph (g)(3) of this section.

(i) Effective/applicability date. This
section applies to all requests for lists
required to be maintained under section
6112, including lists that persons were
required to maintain under section
6112(a) as in effect before October 22,
2004, made on or after April 28, 2016.
John Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: March 22, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2016–09765 Filed 4–27–16; 8:45 am]
BILLING CODE 4830–01–P

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Eighth Coast Guard District Annual
Safety Zones; Pittsburgh Pirates
Fireworks; Allegheny River Mile 0.2 to
0.8; Pittsburgh, PA
Coast Guard, DHS.
Notice of enforcement of
regulation.

AGENCY:
ACTION:

VerDate Sep<11>2014

16:16 Apr 27, 2016

Jkt 238001

The Coast Guard will enforce
a safety zone for the Pittsburgh Pirates
Fireworks on the Allegheny River, from
mile 0.2 to 0.8, extending the entire
width of the river to provide for the
safety of life on navigable waters. This
rule is effective following certain home
games throughout the Major League
Baseball season, including post-season
home games if the Pittsburgh Pirates
make the playoffs. During the
enforcement period, entry into,
transiting, or anchoring in the safety
zone is prohibited to all vessels not
registered with the sponsor as
participants or official patrol vessels,
unless specifically authorized by the
Captain of the Port (COTP) Pittsburgh or
a designated representative.
DATES: The regulations in 33 CFR
165.801 Table 1, Sector Ohio Valley,
Line No. 1 will be enforced for the
Pittsburgh Pirates Season Fireworks as
identified in the SUPPLEMENTARY
INFORMATION section below with dates
and times.
FOR FURTHER INFORMATION CONTACT: If
you have questions about this notice of
enforcement, call or email MST1
Jennifer Haggins, Marine Safety Unit
Pittsburgh, U.S. Coast Guard; telephone
412–221–0807, email
[email protected].
SUPPLEMENTARY INFORMATION: The Coast
Guard will enforce the Safety Zone for
the annual Pittsburgh Pirates Fireworks
listed in 33 CFR 165.801 Table 1, Sector
Ohio Valley, Line No. 1 from 8:45 p.m.
to 11:59 p.m. on the following dates:
April 16 and 30, May 19, June 11, July
21, August 20, September 8, and during
the 3 hours following post-season home
games, should the Pittsburgh Pirates
make the playoffs, in October and
November, 2016. Should inclement
weather require rescheduling, the safety
zone will be effective following games
on a rain date to occur within 48 hours
of the scheduled date. This action is
being taken to provide for safety of life
on navigable waters during a fireworks
display taking place on and over the
waterway. These regulations can be
found in the Code of Federal
Regulations, under 33 CFR 165.801. As
specified in § 165.801, entry into the
safety zone is prohibited unless
authorized by the COTP or a designated
representative. Persons or vessels
desiring to enter into or passage through
the safety zone must request permission
from the COTP or a designated
representative. If permission is granted,
all persons and vessels shall comply
with the instructions of the COTP or
designated representative.
This notice of enforcement is issued
under authority of 33 CFR 165.801 and
SUMMARY:

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25339

5 U.S.C. 552 (a). In addition to this
notice in the Federal Register, the Coast
Guard will provide the maritime
community with advance notification of
this enforcement period via Local
Notice to Mariners and updates via
Marine Information Broadcasts.
Dated: March 30, 2016.
L. McClain, Jr.,
Commander, U.S. Coast Guard, Captain of
the Port Pittsburgh.
[FR Doc. 2016–09990 Filed 4–27–16; 8:45 am]
BILLING CODE 9110–04–P

DEPARTMENT OF EDUCATION
34 CFR Chapter IV
[CFDA Number: 84.420A; Docket ID ED–
2015–OCTAE–0095]

Final Priorities, Requirements,
Definitions, and Selection Criteria—
Performance Partnership Pilots for
Disconnected Youth
Office of Career, Technical, and
Adult Education, Department of
Education.
ACTION: Final priorities, requirements,
definitions, and selection criteria.
AGENCY:

The Assistant Secretary for
Career, Technical, and Adult Education
(Assistant Secretary) announces
priorities, requirements, definitions, and
selection criteria under the Performance
Partnership Pilots (P3) for Disconnected
Youth competition. The Assistant
Secretary may use the priorities,
requirements, definitions, and selection
criteria for competitions for fiscal year
(FY) 2015 and later years. We take this
action in order to support the
identification of strong and effective
pilots that are likely to achieve
significant improvements in
educational, employment, and other key
outcomes for disconnected youth.
DATES: Effective Date: These priorities,
requirements, definitions, and selection
criteria are effective May 31, 2016.
FOR FURTHER INFORMATION CONTACT:
Braden Goetz, U.S. Department of
Education, 400 Maryland Avenue SW.,
Room 11141, PCP, Washington, DC
20202. Telephone: (202) 245–7405 or by
email: [email protected].
If you use a telecommunications
device for the deaf (TDD) or a text
telephone (TTY), call the Federal Relay
Service (FRS), toll free, at 1–800–877–
8339.
SUPPLEMENTARY INFORMATION:
SUMMARY:

Executive Summary
Purpose of This Regulatory Action:
The Assistant Secretary announces

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