The Internal Revenue Service is asking members of the public for ideas about how it should run a new system for punishing tax-exempt entities that get involved with potentially abusive tax shelters.
The IRS has put out the request for comments in Notice 2006-65, which discusses IRS plans for implementing the Tax Increase Prevention and Reconciliation Act of 2005, which applies to plan years ending after May 17.
TIPRA applies to 2 types of tax-exempt entities: “plan entities” and “non-plan entities.”
The list of plan entities includes Section 403(a) and Section 403(b) annuity plans, Section 529 tuition savings programs, Section 457(b) retirement plans, medical savings accounts, individual retirement accounts, Coverdell education savings accounts and health savings accounts.
The list of non-plan entities includes charities, voluntary employees’ beneficiary associations, insurance companies and many other organizations.