In the May 11 comment letter, the AICPA requested that the IRS provide additional guidance on “reasonable efforts” that must be taken to satisfy the Schedule L requirements that are related to identifying and obtaining information on reportable transactions from “interested persons.” The AICPA also asked that the IRS revise the definition of “interested persons” for purposes of Schedule L.
Troy K. Lewis, CPA, CGMA, chair of the AICPA Tax Executive Committee, wrote, “The AICPA strongly urges you to remove substantial contributors from the list of interested persons in the Schedule L instructions. This change will eliminate the disclosure of substantial contributors, who are considered interested persons, in the current Schedule L instructions and in the questionnaire to meet the reasonable effort requirements.”
Lewis added, “If you decide not to change the list of interested persons as recommended, we respectfully request a revision to the Schedule L instructions to include alternative methods to achieve reasonable efforts in relation to interested persons who are substantial contributors. For example, redact the substantial contributor names if a disclosure is needed, and narrow the types of transactions from a substantial contributor that would require disclosure.”