Instructions For Form 8886 - Reportable Transaction Disclosure Statement (Page 4 of 7) in pdf

date (including extensions) and, based

with these instructions. If the transaction

Subsequent Loss Transactions

on receipt of the timely Schedule K-1,

is not disclosed and a reportable

If a transaction becomes a loss

you determine that you participated in a

transaction understatement exists, you

transaction because the losses equal or

reportable transaction, Form 8886 will

may not have a reasonable cause and

exceed the threshold amounts

not be considered late if you file Form

good faith defense under section

described earlier in

Loss

Transactions,

8886 with OTSA within 60 days after the

6664(d) with respect to the

Form 8886 must be filed as an

due date of your return including

accuracy-related penalty under section

attachment to your income tax return or

extensions.

6662A. For more information, see

information return for the first tax year in

section 6662A and Notice 2005-12,

which the threshold amount is reached

2005-7 I.R.B. 494, available at

IRS.gov/

Designation as a Listed

and to any subsequent income tax

pub/irs-irbs/irb05-07.pdf.

Transaction and/or Transaction of

return or information return that reflects

any amount of section 165 loss from the

Interest After Filing Tax Return

A penalty under section 6707A is

transaction.

assessed for each failure by any

If a transaction becomes a listed

individual or entity required to file a

transaction or a transaction of interest

Multiple Disclosures

Form 8886 if the individual or entity (a)

after you file a tax return (including an

fails to attach Form 8886 to the

amended return) reflecting your

If you are required to file Form 8886,

appropriate original, amended return, or

participation in the listed transaction or

you must do so regardless of whether

application for tentative refund;(b) fails

transaction of interest and before the

you also plan to disclose the transaction

to file the form with OTSA, if required; or

running of the period of limitations for

under other published guidance, for

assessment of tax for any tax year in

example, Regulations section

information required (or includes

which you participated in the listed

1.6662-3(c)(2).

incorrect information). The Form 8886

transaction or transaction of interest,

Penalties

must be completed in its entirety with all

then you must file Form 8886 according

required attachments to be considered

to the following rules.

There is a monetary penalty under

complete. Do not enter “Information

Listed Transaction entered into

section 6707A for the failure to include

provided upon request” or “Details

before August 3, 2007. If you entered

on any return or statement any

available upon request,” or any similar

into a transaction before August 3,

information required to be disclosed

statement in the space provided.

2007, that later becomes a listed

under section 6011 with respect to a

Inclusion of any such statements

transaction, then you must attach Form

reportable transaction. Generally, the

subjects you to penalty under sections

8886 to the first tax return you file after

penalty for failure to include information

6707A and 6662A.

the date the transaction became a listed

with respect to a reportable transaction

transaction. Also file Form 8886 with

If you are required to pay a

is 75% of the reduction in the tax

OTSA as provided in Also file

penalty under section 6707A or

reported on the income tax return as a

separately, earlier.

section 6662A, you may be

result of participation in the transaction

CAUTION

Listed Transaction entered into

required to disclose them on reports

or that would result if the transaction

after August 2, 2007. If you entered

filed with the Securities and Exchange

were respected for federal tax

into a transaction after August 2, 2007,

Commission. If you do not disclose

purposes, but not less than $5,000 in

that later becomes a listed transaction,

these penalties, you may incur

the case of an individual and $10,000 in

then you must file Form 8886 with

additional penalties under section

any other case. The annual maximum

OTSA within 90 days after the date on

6707A(e). For more information, see

penalty for failure to disclose a

which the transaction became a listed

section 6707A(e) and Rev. Proc.

reportable transaction, other than a

transaction.

2005-51, 2005-33 I.R.B. 296, available

listed transaction, cannot exceed

Transaction of Interest entered

at IRS.gov/pub/irs-irbs/irb05-33.pdf,

$10,000 in the case of an individual, and

into after November 1, 2006. If you

amplified by Rev. Proc. 2007-25,

$50,000 in any other case. The

entered into a transaction after

maximum annual penalty for failure to

2007-12 I.R.B. 761, available at

November 1, 2006, that later becomes a

include information with respect to a

IRS.gov/pub/irs-irbs/irb07-12.pdf.

transaction of interest, then you must file

listed transaction is $100,000 in the

Form 8886 with OTSA within 90 days

Previously Undisclosed Listed

case of an individual and $200,000 in

after the date on which the transaction

any other case. This penalty is in

Transactions

became a transaction of interest.

addition to any other penalty that may

If you are required to disclose a listed

However, the published guidance

be imposed. For information, see

transaction and fail to do so within the

under which the transaction becomes a

section 6707A and Rev. Proc. 2007-21,

time and manner prescribed under

listed transaction or transaction of

2007-9 I.R.B. 613, available at

IRS.gov/

section 6011 and the related

interest may also provide the time for

pub/irs-irbs/irb07-09.pdf.

regulations, then under section 6501(c)

filing Form 8886. You must file Form

If you have a reportable transaction

(10) the period to assess any tax with

8886 in the time and in the manner

understatement, an accuracy-related

respect to the listed transaction will be

stated above regardless of whether you

penalty may be imposed under section

extended beyond the normal

participated in the transaction in the

assessment period until 1 year after the

6662A. This penalty applies to the

year in which the transaction became a

earlier of either:

amount of the understatement that is

listed transaction or transaction of

The date you disclose the transaction

attributable to any listed transaction and

interest.

any reportable transaction (other than a

by filing Form 8886 in the manner

listed transaction) with a significant tax

prescribed in Rev. Proc. 2005-26,

avoidance purpose. The penalty

2005-17 I.R.B. 965, available at

increases for transactions that are not

IRS.gov/pub/irs-irbs/irb05-17.pdf

(or

disclosed on Form 8886 in accordance

subsequently published guidance); or

-4-

Instructions for Form 8886 (Rev. 8-2017)

Instructions For Form 8886 - Reportable Transaction Disclosure Statement Page 4

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