Instructions For Form 8275-Department Of The Treasury-Internal Revenue Service (Page 3 of 4) in pdf

Part II

(or to be derived) by the tax return

Use Part IV on page 2 if you need

preparer, with respect to the return or

more space for Part I or II. Indicate the

Your disclosure statement must

claim, for taking a position which the

corresponding part and line number

include a description of the relevant

preparer knew or reasonably should

from page 1. You can use a

facts affecting the tax treatment of the

have known would understate any

continuation sheet(s) if you need

item. To satisfy this requirement, you

part of the liability if:

additional space. Be sure to put your

must include information that

name and identifying number on each

There is or was no substantial

reasonably can be expected to

sheet.

authority for the position.

apprise the IRS of the identity of the

The position is a tax shelter (as

item, its amount, and the nature of the

Reference ID number. If you are

defined in section 6662(d)(2)(C)(ii)) or

controversy or potential controversy.

filing Form 8275 to disclose a position

a reportable transaction to which

Information concerning the nature of

related to a foreign entity for which an

section 6662A applies and it was not

the controversy can include a

information return (such as Form

reasonable to believe that the position

description of the legal issues

5471) is filed, enter on Form 8275 the

would more likely than not be

presented by the facts.

same reference ID number for the

sustained on its merits.

foreign entity that is entered on the

Unless provided otherwise in

The position disclosed as provided

information return.

the General Instructions

in section 6662(d)(2)(B)(ii), is not a tax

If you are filing Form 8275 to report

above, your disclosure will

shelter or a reportable transaction to

CAUTION

a position or positions related to

not be considered accurate unless the

which section 6662A applies, and

multiple foreign entities, file a

information described above is

there was no reasonable basis for the

separate Form 8275 for each foreign

provided using Form 8275. For

position.

entity.

example, your disclosure will not be

The penalty will not apply if it can

considered adequate if you attach a

Part I

be shown that there was reasonable

copy of an acquisition agreement to

cause for the understatement and that

your tax return to disclose the issues

Column (a). If you are disclosing a

the preparer acted in good faith.

involved in determining the basis of

position contrary to a rule (such as a

In cases where any part of the

certain acquired assets. If Form 8275

statutory provision or IRS revenue

understatement of the liability is due

is not completed and attached to the

ruling), you must identify the rule in

to a willful attempt by the return

return, the disclosure will not be

column (a).

preparer to understate the liability, or

considered valid even if the

Column (b). Identify the item by

if the understatement is due to

information described above is

name.

reckless or intentional disregard of

provided using another method, such

rules or regulations by the preparer,

as a different form or an attached

If any item you disclose is from a

the preparer is subject to a penalty

letter.

pass-through entity, you must identify

equal to the greater of $5,000 or 50

the item as such. If you disclose items

percent of the income derived (or to

from more than one pass-through

Part III

be derived) by the tax return preparer

entity, you must complete a separate

Line 4. Contact your pass-through

with respect to the return or claim.

Form 8275 for each entity. Also, see

entity if you do not know where its

This penalty shall be reduced by the

How To File on page 1.

return was filed. However, for partners

amount of the penalty paid by such

Column (c). Enter a complete

and S corporation shareholders,

person for taking an unreasonable

description of the item(s) you are

information for line 4 can be found on

position, or a position with no

disclosing.

the Schedule K-1 that you received

reasonable basis, as described

Example. If entertainment

from the partnership or S corporation.

immediately above.

expenses were reported in column

If the pass-through entity filed its

A preparer is not considered to

(b), then list in column (c) “theater

return electronically using e-file, enter

have recklessly or intentionally

tickets, catering expenses, and

“e-file” on line 4.

disregarded a rule if a position is

banquet hall rentals.”

adequately disclosed and has a

Paperwork Reduction Act Notice.

If you claim the same tax treatment

reasonable basis.

We ask for the information on this

for a group of similar items in the

form to carry out the Internal Revenue

Note. For more information about the

same tax year, enter a description

laws of the United States. You are

accuracy-related penalty and preparer

identifying the group of items you are

required to give us the information if

penalties, and the means of avoiding

disclosing rather than a separate

you wish to use this form to make

these penalties, see the regulations

description of each item within the

adequate disclosure to avoid the

under sections 6662, 6664, and 6694.

group.

portion of the accuracy-related

Columns (d) through (f). Enter the

penalty due to a substantial

Specific Instructions

location of the item(s) by identifying

understatement of income tax or

the form number or schedule and the

Be sure to supply all the information

disregard of rules, or to avoid certain

line number in columns (d) and (e)

for Parts I, II, and, if applicable, Part

preparer penalties. We need it to

and the amount of the item(s) in

III. Your disclosure will be considered

ensure that you are complying with

column (f).

adequate if you file Form 8275 and

these laws and to allow us to figure

supply the information requested in

and collect the right amount of tax.

detail.

Instructions For Form 8275-Department Of The Treasury-Internal Revenue Service Page 3

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