In general. A reportable transaction is a transaction described in any of the paragraphs (b)(2) through (7) of this section (§1.6011-4.) The term transaction includes all of the factual elements relevant to the expected tax treatment of any investment, entity, plan, or arrangement, and includes any series of steps carried out as part of a plan.
THe statute then goes on to list the following:
(2) Listed transactions
(3) Confidential transactions
(4) Transactions with contractual protection
(5) Loss transactions
(6) Transactions of interest
(7 is a currently reserved section)
This section can deal wiith MANY possible areas; tax shelters, qualified plans, essentiallly any item that a taxing authority (IRS here) determins as follows:
"Reportable transaction" means any transaction or arrangement with respect to which information is required to be included with a tax return or statement because, as determined under regulations prescribed pursuant to this act, such transaction or arrangement is of a type which 1) the commissionner determines as having a potential for avoidance or evasion of the tax imposed by tax law, whether through deduction or credit, the excludability or omission of any income, the manipulation of any allocation or apportionment rule, or the securing of any other tax benefit.