IRS issues limited waiver of penalties for 831(b)s

The Internal Revenue Service (IRS) has issued a limited waiver of penalties for certain disclosure statements for micro-captive reportable transactions. 

Notice 2025-24 provides relief from penalties under section 6707A(a) of the Internal Revenue Code (Code)1 to participants in micro-captive reportable transactions that fail to file certain disclosure statements required under section 6011 and § 1.6011-10(h)(2) or § 1.6011-11(h)(2) by April 14, 2025. 

This relief applies only if such participants file the required disclosure statement with the Office of Tax Shelter Analysis (OTSA) by July 31, 2025. In addition, this notice provides relief from penalties under section 6707(a) for material advisors to certain micro-captive reportable transactions that are required under section 6111 and § 1.6011-10(h)(3) or § 1.6011-11(h)(3) to file a disclosure statement with OTSA by April 30, 2025, if such material advisors file the disclosure statement with OTSA by July 31, 2025. 

The relevant penalties will be waived as described in section 3 of this notice.

A wide range of states regulatory departments and other organisations have been calling for an extension on the agency’s January 14 regulatory requirements for Section 831(b) of the Internal Revenue Code. 

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