Instructions For Form 8918 - 2011 printable pdf download

Instructions for Form 8918

Department of the Treasury

Internal Revenue Service

(Rev. December 2011)

Material Advisor Disclosure Statement

Section references are to the Internal

of the threshold amount (defined below)

partnerships, S corporations, or trusts)

for the material aid, assistance, or advice.

then substantially all of the tax benefits

Revenue Code unless otherwise noted.

will be considered to be provided to

What’s New

You provide material aid, assistance,

individuals.

or advice with respect to the organizing,

The IRS has created a page on irs.gov for

managing, promoting, selling,

For all other transactions, the

information about Form 8918 and its

implementing, insuring, or carrying out

threshold amount is $250,000. For listed

instructions, at

any transaction if you make or provide a

transactions, the threshold amounts are

Information about any future

tax statement to or for the benefit of:

reduced from $50,000 to $10,000 and

developments affecting Form 8918 (such

•

A taxpayer who either is required to

from $250,000 to $25,000. For

as legislation enacted after we release it)

disclose the transaction under section

transactions of interest, the threshold

will be posted on that page.

6011 because the transaction is a listed

amounts may be reduced as identified in

transaction or a transaction of interest, or

the published guidance describing the

General Instructions

would have been required to disclose the

transaction. Determine the threshold

transaction under section 6011 if the

amount separately for each reportable

Purpose of Form

transaction had become a listed

transaction. The threshold amount must

Material advisors to any reportable

transaction or a transaction of interest

be met independently for each transaction

transaction must disclose certain

within the period of limitations;

that is a reportable transaction and

•

information about the reportable

A taxpayer who you know is or

aggregation of fees among reportable

transaction by filing a Form 8918 with the

reasonably expect to be required to

transactions is not required.

IRS. Form 8918 replaces Form 8264,

disclose the transaction under

In figuring the amount of gross income

which was previously used by material

Regulations section 1.6011-4 because

you receive directly, or indirectly, for

advisors for disclosure.

the transaction is or is reasonably

material aid, assistance, or advice,

expected to become a reportable

Material advisors who file a Form 8918

include all the following.

transaction other than a listed transaction

will receive a reportable transaction

•

Fees for a tax strategy.

or transaction of interest;

number from the IRS. Material advisors

•

Fees for advice (whether or not tax

•

A material advisor who is required to

must provide the reportable transaction

advice).

disclose the transaction under section

number to all taxpayers and material

•

Fees for implementing the reportable

6111 because the transaction is a listed

advisors for whom the material advisor

transaction.

transaction or a transaction of interest; or

acts as a material advisor. See Who is a

•

A material advisor who you know is or

Fees. Fees include consideration in

Material Advisor below. Every taxpayer

reasonably expect to be required to

who has participated in a reportable

whatever form paid, whether in cash or in

disclose the transaction under section

transaction (see What is a Reportable

kind, for:

6111 because the transaction is or is

•

Transaction, later) must also disclose the

Services to analyze the transaction

reasonably expected to become a

transaction on Form 8886, Reportable

(whether or not related to the tax

reportable transaction other than a listed

Transaction Disclosure Statement. For

consequences of the transaction),

transaction or transaction of interest.

•

more information, see Form 8886 and the

Services to implement the transaction,

•

Instructions for Form 8886.

Services to document the transaction,

Tax statement. Generally, a tax

and

statement is any statement (including

Who Must File?

•

Services to prepare tax returns to the

another person’s statement), oral or

Generally, every material advisor to a

extent return preparation fees are

written, that relates to a tax aspect of a

reportable transaction is required to file

unreasonable.

transaction that causes the transaction to

Form 8918. A material advisor can be an

be a reportable transaction. A tax

A fee does not include amounts paid to

individual, trust, estate, partnership, or

statement includes tax result protection

a person, including an advisor, in that

corporation. You are not required to file

that insures some or all of the tax benefits

person’s capacity as a party to the

Form 8918 unless a taxpayer to whom or

of a reportable transaction. Tax result

transaction. For example, a fee does not

for whose benefit you provided the tax

protection includes insurance company

include reasonable charges for the use of

statement (defined below) entered into

and other third party products commonly

capital or the sale or use of property.

the reportable transaction. If you provide

described as tax result insurance. For

a tax statement to another material

The IRS will scrutinize carefully all of

more information, see Regulations

advisor, you are not required to file Form

the facts and circumstances to determine

section 301.6111-3(b)(2)(ii).

8918 unless the reportable transaction is

if consideration received or expected to

Threshold amount. The threshold

entered into by a taxpayer to whom or for

be received in connection with a

amount of gross income is $50,000 for a

whose benefit that material advisor

reportable transaction is gross income

reportable transaction that provides

provided the tax statement.

received directly, or indirectly, for aid,

substantially all of the tax benefits to

assistance, or advice.

Who is a Material Advisor?

individuals (looking through any

Employee exception. Generally, you

You are a material advisor to a

partnerships, S corporations, or trusts).

transaction if you:

The determination of whether

are not considered to be a material

•

Provide any material aid, assistance, or

substantially all of the tax benefits from a

advisor if you make a tax statement solely

advice with respect to the organizing,

reportable transaction are provided to

in your capacity as an employee,

managing, promoting, selling,

individuals is based on all the facts and

shareholder, partner, or agent of another

implementing, insuring, or carrying out

circumstances. Generally, if 70% or more

person. In this case, any tax statement

any reportable transaction, and

of the tax benefits (defined later) from a

you make will be considered to be made

•

You directly or indirectly receive or

reportable transaction are provided to

by your employer, corporation,

expect to receive gross income in excess

individuals (looking through any

partnership, or principal.

Dec 30, 2011

Cat. No. 50150N

Instructions For Form 8918 - 2011

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