Abusive tax shelters

Investments that yield tax benefits are sometimes called "tax shelters." Generally, abusive tax shelters are schemes involving transactions with little or no substance.

Participants in certain shelters and transactions are required to disclose their participation, and may be subject to penalties for failing to do so.

Reportable transaction

A reportable transaction is any transaction that the IRS or FTB determines has a potential for tax:

  • Evasion
  • Avoidance

This includes listed transactions and transactions with certain specified characteristics.

Listed transaction

A reportable transaction that is the same as or similar to a transaction identified by the IRS or FTB as a tax avoidance transaction.

There are California-only listed transactions as well as Federal listed transactions.

California-only listed transactions

Federal listed transactions

The IRS has determined transactions as tax avoidance transactions and identified by notice, regulation, or other form of published guidance as a listed transaction.

To view the federal listed transactions, visit IRS’s Recognized Abusive and Listed Transactions page.