Tax Shelter Transparency Act

Tax Shelter Transparency Act - Amends the Internal Revenue Code to prescribe a civil penalty for failure to include on any return or statement certain information required about "reportable transactions" having a potential for tax avoidance or evasion. Increases civil penalty for making reportable transaction income tax understatements, and limits reasonable cause exceptions to such penalty.Extends provision nullifying right of an individual to confidentiality privileges pertaining to written communication with a federally authorized tax practitioner for promoting a tax shelter to include additional persons.Modifies the monetary penalty and revises provisions for failing to register a tax shelter with the Secretary of the Treasury. Increases the civil penalty for understatement of a taxpayer's liability by an income tax preparer.Establishes a monetary penalty for filing a frivolous tax return, which shall be in addition to any other penalty provided by law, to be rescinded if the taxpayer withdraws the return promptly after being made aware of the violation.Amends the provisions of law regulating the practice of representatives of persons before the Department of the Treasury to permit the Secretary to impose a monetary penalty on taxpayer representatives who are disreputable or incompetent, who violate certain regulations or who mislead with intent to defraud. Permits the Secretary to impose a civil penalty on firms of such representatives that knew or reasonably should have known of such conduct.Modifies monetary penalty for making fraudulent statements on certain topics involving promotion of abusive tax shelters.