(a) In general. The taxes under section 4965(a) and Sec. 53.4965-7 are effective for taxable years ending after May 17, 2006, with respect to transactions entered into before, on or after that date, except that no tax under section 4965(a) applies with respect to income or proceeds that are properly allocable to any period ending on or before August 15, 2006.
(b) Applicability of the regulations. As of July 6, 2010, except as provided in paragraph (c) of this section, Sec. Sec. 53.4965-1 through 53.4965-8 of this chapter will apply to taxable years ending after July 6, 2007. A tax-exempt entity may rely on the provisions of Sec. Sec. 53.4965-1 through 53.4965-8 for taxable years ending on or before July 6, 2007.
(c) Effective/applicability date with respect to certain knowing transactions--(1) Entity-level tax. The 100 percent tax under section 4965(b)(1)(B) and Sec. 53.4965-7(a)(1)(i)(B) does not apply to prohibited tax shelter transactions entered into by a tax-exempt entity on or before May 17, 2006.
(1) Entity-level tax. The 100 percent tax under section 4965(b)(1)(B) and Sec. 53.4965-7(a)(1)(i)(B) does not apply to prohibited tax shelter transactions entered into by a tax-exempt entity on or before May 17, 2006.
(2) Manager-level tax. The IRS will not assert that an entity manager who approved or caused a tax-exempt entity to become a party to a prohibited tax shelter transaction is liable for the entity manager tax under section 4965(b)(2) and Sec. 53.4965-7(b)(1) with respect to the transaction if the tax-exempt entity entered into such transaction prior to May 17, 2006. [T.D. 9492, 75 FR 38702, July 6, 2010]