IRS Proposes Disclosure of Maltese Retirement-Plan Transactions

The IRS proposed regulations Tuesday that would require taxpayers to disclose transactions in Maltese retirement plans, which the agency says are being used to avoid US taxes.

The proposed rules (RIN 1545-BQ61) would classify such Maltese arrangements and similar transactions as listed transactions, which material advisers and participants must report to the IRS. Failure to disclose can result in financial penalties.

• The IRS says some taxpayers have misconstrued the terms of the tax treaty between the US and Malta to claim an exemption from US income tax on earnings in and distributions from Maltese retirement plans. The IRS ...