Looking for a Form 8275 Templates? Download it for free!

Instructions for

Department of the Treasury

Internal Revenue Service

Form 8275-R

(Rev. January 2005)

(Use with the February 2002 revision of Form 8275-R.)

Regulation Disclosure Statement

return of the entity. If the entity does not

5. Any substantial estate or gift tax

General Instructions

make the disclosure, the partner (or

valuation understatement.

Section references are to the Internal

shareholder, etc.) may make adequate

However, the penalty is 40% of any

Revenue Code unless otherwise noted.

disclosure of these items.

portion of a tax underpayment attributable to

Purpose of Form

one or more gross valuation misstatements

How To File

in (3), (4), or (5) above if the applicable

Form 8275-R is used by taxpayers and

When a return position is contrary to

dollar limitation under section 6662(h)(2) is

income tax preparers to disclose positions

regulations, you must file Form 8275-R. File

met.

taken on a tax return that are contrary to

all Forms 8275-R with your original tax

Reasonable basis. Generally, you can

Treasury regulations. The form is filed to

return. Keep a copy for your records. You

avoid the disregard of regulations and

avoid the portions of the accuracy-related

also may be able to file Forms 8275-R with

substantial understatement portions of the

penalty due to disregard of regulations or to

an amended return. See Regulations

accuracy-related penalty if the position is

a substantial understatement of income tax

sections 1.6662-4(f) and 1.6664-2(c)(3) for

adequately disclosed and the position has at

for non-tax shelter items if the return

more information.

least a reasonable basis. To avoid the

position has a reasonable basis. It can also

To make adequate disclosure for items

disregard of regulations portion of the

be used for disclosures relating to the

reported by a pass-through entity, you must

accuracy-related penalty, the position taken

preparer penalties for income tax

complete and file a separate Form 8275-R

must also represent a good-faith challenge

understatements due to positions taken

for items reported by each entity.

to the validity of the regulation. Reasonable

contrary to regulations.

basis is a relatively high standard of tax

Carrybacks, carryovers, and recurring

The portion of the accuracy-related

reporting that is significantly higher than not

items. Carryover items must be disclosed

penalty attributable to the following

frivolous or not patently improper. The

in the tax year in which they originated. You

types of misconduct cannot be

reasonable basis standard is not satisfied by

CAUTION

do not have to file another Form 8275-R for

avoided by disclosure on Form 8275-R:

a return position that is merely arguable.

those items for the tax years in which the

•

carryover is taken into account.

Negligence.

The penalty will not be imposed on any

•

Disregard of rules.

part of an underpayment if there was

Carryback items must be disclosed for

•

Substantial understatement of tax on a

reasonable cause for your position and you

the tax year in which they originated. You do

tax shelter item.

acted in good faith in taking that position.

not have to file another Form 8275-R for

•

Substantial valuation misstatement under

those items for the tax years in which the

If you failed to keep proper books and

chapter 1.

carryback is taken into account.

records or failed to substantiate items

•

Substantial overstatement of pension

properly, you cannot avoid the penalty by

However, if you disclose items that are of

liabilities.

disclosure.

•

a recurring nature (such as depreciation

Substantial estate or gift tax valuation

expense), you must file Form 8275-R for

understatements.

Substantial Understatement

each tax year in which the item occurs.

An understatement is the excess of:

Because of the importance to the

If you are disclosing a position that is

self-assessment system of disclosing

1. The amount of tax required to be

contrary to a regulation, and the position

positions contrary to regulations, the

shown on the return for the tax year, over

relates to a reportable transaction as

requirements for making such disclosures

2. The amount of tax shown on the

defined in Regulations section 1.6011-4(b),

are stringent.

return for the tax year, reduced by any

you must also make the disclosure required

•

The disclosure is adequate only if it is

rebates.

by Regulations section 1.6011-4(b). See

made separately on a Form 8275-R, and

Form 8886, Reportable Transaction

•

The penalty for reckless or intentional

There is a substantial understatement of

Disclosure Statement, its instructions, and

income tax if the amount of the

disregard of a regulation may be avoided by

Rev. Proc. 2004-45, which is on page 140 of

understatement for any year exceeds the

disclosure only if the position represents a

Internal Revenue Bulletin 2004-31 at http://

good faith challenge to the validity of the

greater of:

regulation and has a reasonable basis.

1. 10% of the tax required to be shown

on the return for the tax year, or

Instead of Form 8275-R, use Form 8275,

Accuracy-Related Penalty

2. $5,000 ($10,000 for a corporation

Disclosure Statement, for the disclosure of

Generally, the accuracy-related penalty is

other than an S corporation or a personal

items or positions which are not contrary to

20% of any portion of a tax underpayment

holding company as defined in section 542).

regulations but which are not otherwise

attributable to:

adequately disclosed.

For tax years beginning after October 22,

1. Negligence or disregard of rules or

2004, an understatement of a corporation

regulations.

Who Should File

(other than an S corporation or a personal

2. Substantial understatement of income

Form 8275-R is filed by individuals,

holding company) is substantial if it exceeds

tax.

corporations, pass-through entities, and

the lesser of:

3. Any substantial valuation

income tax return preparers.

misstatement under chapter 1.

1. 10% of the tax required to be shown

For items attributable to a pass-through

4. Any substantial overstatement of

on the return for the tax year (or, if greater,

entity, disclosure should be made on the tax

pension liabilities.

$10,000), or

Cat. No. 14317I

Instructions For Form 8275-R - Regulation Disclosure Statement - Department Of The Treasury - 2005

Related Articles

Related forms

Related Categories