LOOK FOR THE IRS TO PROVIDE A DEFINITION OF “TAX SHELTER” before the end of the year. This will trigger reporting of all corporate tax shelters and also fill in gaps on when tax planning memos from accounting firms are privileged from discovery by the IRS during audits. A 1997 law requires that corporate tax shelters be registered with the IRS, but the registration requirement does not take effect until the IRS provides a definition. The promoter of the idea must usually register it. However, in certain cases, companies to whom ideas are pitched must also register them. “Tax shelter” is defined broadly by statute to cover any plan or arrangement that has as “a significant purpose” avoiding or evading US taxes. Communications with accountants have historically been subject to discovery by the IRS on audit. However, last summer, Congress extended a limited privilege for tax advice to accountants similar to the attorney-client privilege, but the new privilege does not cover advice concerning corporate tax shelters.