Welcome to the bimonthly publication, IRS Insights, produced by Deloitte's Tax Controversy Services Group to keep our clients abreast of current issues related to the Internal Revenue Service.

In this month's issue:

• IRS Memoranda Protected by Work Product Privilege – In a recent Tax Court decision, the court held that memoranda prepared by the IRS for trial continue to be protected by the work product privilege in connection with motions filed after the case-in-chief was decided. Further, the court held that the work product privilege was not waived when a redacted version of a memorandum was provided to the tax-payer.
• Statute of Limitations on Assessments Suspended by Final Partnership Administrative Adjustment and Issuance of Summons – The Court of Federal Claims recently held that the statute of limitations for the issuance of a Final Partnership Adminis-trative Adjustment to a TEFRA (the Tax Equity and Fiscal Responsibility Act of 1982) partnership was suspended by the issuance of a summons to unrelated firms seeking the identities of partners and a partnership that may have engaged in an abusive tax shelter transaction.
• Tax Controversy Updates: IRS Proposes New Reportable Transactions Category for Patented Transactions – The IRS recently issued proposed regulations to add patented transactions as a new category of reportable transaction under §1.6011-4. These regulations also describe when a person is a material advisor with respect to a patented transaction under section 6111. In addition, a material advisor with respect to a patented transaction will have a list maintenance obligation under section 6112.
• Tax Controversy Updates: ABA Tax Section Releases Report on Independence of IRS Appeals – The American Bar Association Section of Taxation issued a report on Independence of IRS Appeals. The report was issued to give the IRS constructive feedback on the changes affecting tax practitioners.
• Recent Guidance: IRS Proposes Increased Standards for Advising Clients and Preparing Returns – The Treasury Department recently proposed regulations strengthening the standards that tax practitioners must use to advise clients and to prepare and sign tax returns under Circular 230. The proposed regulations modify §10.34 of Circular 230.
• Recent Guidance: IRS Issues Guidance on How to File Material Adviser Disclosure Statements – The IRS issued Notice 2007-85 that provided guidance to material advisors required to file a disclosure statement by October 31, 2007, under §301.6111-3.

See attached file for details.

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