Notice 2006-16 Modifies Notice 2002-35 On February 13, 2006, the Internal Revenue Service released Notice 2006-16. This notice is intended to narrow the scope of reportable transactions substantially similar to the transaction described in Notice 2002-35PDF and is intended to reduce the number of Form 8886 filings. The Service has continued to receive unnecessary disclosures from taxpayers meeting the exceptions listed below: Section 3.01 clarifies Notice 2002-35, reducing the number of disclosures that will qualify as the listed transaction. This section also lists permissible accounting methods which properly account for the contingent and non-contingent future income, over the life of the contract. Where these methods are used, the transaction will fall outside of Notice 2002-35 and is not a listed transaction. Section 3.02 states that where the taxpayer's involvement in a Notice 2002-35 listed transaction is solely through the taxpayers direct or indirect interest in a pass-through entity that engaged in this reportable transaction, this taxpayer will have no form 8886 filing requirement. Where the transaction may also meet the description of another reportable transaction in § 1.6011-4(b)(3)-(5) or (7), the taxpayer will be required to disclose per § 1.6011-4(a).