In final regulations (T.D. 10051), the IRS identifies certain charitable-remainder-annuity-trust (CRAT) transactions and substantially similar transactions as listed transactions, requiring material advisors and certain participants to file disclosures with the IRS. Failure to disclose will result in penalties. The final regulations also clarify that organizations that are only charitable remaindermen in the transactions will not be treated as participants in, or parties to, the CRAT transactions.

T.D. 10051 is effective July 9, 2026.

Implications

It is likely the Internal Revenue Service (IRS) would assert that the transactions identified in the final regulations do not qualify as CRATs under IRC Section 664.

Taxpayers should engage qualified tax advisors on the implications of these regulations for historic and prospective CRAT transactions, and possible reporting obligations as noted below.

Generally, taxpayers that participate in a reportable transaction and are required to file a tax return¹ must file a disclosure statement with the IRS and, in certain instances, the Office of Tax Shelter Analysis (OTSA). If a transaction becomes a listed transaction after the taxpayer files a return (including an amended return) reflecting its participation, but before the assessment period for that tax year expires, the taxpayer must file the disclosure statement with OTSA within 90 calendar days of the transaction's listing. This requirement applies regardless of whether the taxpayer participated in the transaction during the year it became listed.

In short, taxpayers may have a retroactive disclosure obligation when the IRS later identifies a transaction as a listed transaction as well as a current and prospective disclosure obligation.

Taxpayers that fail to disclose participation in a reportable transaction may be subject to penalties under IRC Section 6707A and additional understatement penalties under IRC Section 6662A.

An advisor that made, or makes, a tax statement about a listed transaction and meets the material advisor criteria may also have disclosure and list maintenance obligations under IRC Sections 6111 and 6112 and the related regulations. If a transaction that was not previously reportable is later identified as a listed transaction in published guidance, the advisor is treated as becoming a material advisor on the date the transaction is identified as listed.