Form 8886, Reportable Transaction Disclosure Statement

Form 8886, Reportable Transaction Disclosure Statement, is the Internal Revenue Service (IRS) form used to disclose information about each reportable transaction in which a taxpayer participated. It is attached to the taxpayer's federal tax return (OMB No. 1545-1800).

The IRS instructions define a reportable transaction by category. The form's line 2 asks you to check every category that applies:

• Listed: the same as or substantially similar to a transaction the IRS has identified as a tax avoidance transaction.
• Confidential: offered under conditions of confidentiality for a minimum fee paid to an advisor.
• Contractual protection: you have a right to a full or partial refund of fees if the intended tax consequences are not sustained, or fees are contingent on the tax benefits.
• Loss: a section 165 loss that equals or exceeds the applicable threshold amount.
• Transaction of interest: the same as or substantially similar to a transaction the IRS has identified as one of interest.

The form asks for the transaction's name, its reportable transaction registration number, any partnership, S corporation or trust through which you participated, the advisors you paid fees, the tax benefits expected, a narrative of the facts, and any tax-exempt, foreign or related parties. The instructions say that a transaction being reportable does not mean its tax benefits will be disallowed.

Form 8886 is different from Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction, which a tax-exempt entity party to a prohibited tax shelter transaction may have to file in addition to Form 8886.

Any taxpayer that participates in a reportable transaction and must file a federal tax return or information return must file Form 8886. The instructions name individuals, trusts, estates, partnerships, S corporations and other corporations.

• You generally file a separate Form 8886 for each reportable transaction. You may report more than one transaction on one form only if they are the same or substantially similar.
• A regulated investment company (RIC), or an investment vehicle at least 95% owned by one or more RICs at all times, does not have to file for any transaction other than a listed transaction or a transaction of interest.
• If your only link to a transaction described in Notice 2002-35 (tax avoidance using notional principal contracts) is a direct or indirect interest in a pass-through entity, you are not required to disclose it on Form 8886.
• Partners, shareholders and beneficiaries of a pass-through entity can participate in a loss transaction through a loss allocated to them.
• A reporting shareholder of a foreign corporation (a U.S. shareholder in a controlled foreign corporation, or a 10% shareholder of a qualified electing fund) can be a participant under special rules.

A tax-exempt entity party to a prohibited tax shelter transaction may also have to file Form 8886-T.

Attach Form 8886 to your income tax return or information return for each tax year in which you participated in a reportable transaction. This includes amended returns. If a reportable transaction produces a loss or credit carried back to an earlier year, attach the form to the application for tentative refund (Form 1045 or 1139) or to the amended return for the carryback years.

Special timing rules in the instructions:

• Initial year filers also send an exact copy of the form to the Office of Tax Shelter Analysis (OTSA).
• A transaction that becomes a listed transaction or transaction of interest after you file: for a transaction entered into after August 2, 2007 (listed) or after November 1, 2006 (transaction of interest), file with OTSA within 90 days after it became one. Earlier listed transactions are attached to the first return filed after that date.
• A partner, S corporation shareholder or trust beneficiary who gets a timely Schedule K-1 less than 10 calendar days before the return due date (including extensions) is not late if the form reaches OTSA within 60 days after the due date, including extensions.
• A transaction that becomes a loss transaction: file for the first year the threshold is reached and every later return that reflects any section 165 loss from it.

Form 8886 goes in two places: attached to your tax return, and, for initial year filers, as an exact copy to OTSA by mail or fax.

• With your return: attach the original Form 8886 to your income tax or information return (or to Form 1045, Form 1139 or the amended return for a carryback year). You must file the original with the return even when you send the OTSA copy.
• OTSA by mail: Internal Revenue Service, OTSA Mail Stop 4915, 1973 Rulon White Blvd., Ogden, UT 84201. The IRS notes an update to the mailing address in the instructions, so confirm it at IRS.gov/Form8886 before mailing.
• OTSA by fax: 844-253-2553. Use it only for the exact copy of Form 8886 and its materials, send one exact copy per fax, and keep within 100 pages. The fax cover sheet should show the subject "Form 8886", the sender's name, title, phone number and address, the taxpayer's name, the date and the number of pages including the cover sheet. Do not put an EIN or Social Security number on it. The IRS sends no receipt, so keep your fax transmission log.
• Electronic return filers: the copy sent to OTSA must match, word for word, what you filed electronically.

FillingPDF lets you fill out and download the PDF; submission follows the channels above.