Instructions For Form 8918 - Material Advisor Disclosure Statement

Instructions for Form 8918

Department of the Treasury

Internal Revenue Service

(Rev. June 2017)

Material Advisor Disclosure Statement

(For use with Form 8918 (Rev. December 2011) or later revision)

Who Is a Material Advisor?

more information, see Regulations

Section references are to the Internal Revenue

Code unless otherwise noted.

sections 301.6111-3(b)(2)(ii)(A) and

You are a material advisor to a transaction

301.6111–3(c)(12).

What's New

if you:

Provide any material aid, assistance, or

Threshold amount. The threshold

The IRS has created a page on IRS.gov

advice with respect to the organizing,

amount of gross income is $50,000 for a

for information about Form 8918 and its

managing, promoting, selling,

reportable transaction that provides

instructions, at IRS.gov/Form8918.

implementing, insuring, or carrying out any

substantially all of the tax benefits to

Information about any future

reportable transaction, and

individuals (looking through any

developments affecting Form 8918 (such

You directly or indirectly receive or

partnerships, S corporations, or trusts).

as legislation enacted after we release it)

expect to receive gross income in excess

The determination of whether substantially

will be posted on that page.

of the

threshold amount

(defined below)

all of the tax benefits from a reportable

for the material aid, assistance, or advice.

Form 8918. Use the latest revision of

transaction are provided to individuals is

based on all the facts and circumstances.

Form 8918 available on IRS.gov.

You provide material aid, assistance, or

Generally, if 70% or more of the

tax

General Instructions

advice with respect to the organizing,

benefits

(defined later) from a reportable

managing, promoting, selling,

transaction are provided to individuals

Purpose of Form

implementing, insuring, or carrying out any

(looking through any partnerships, S

transaction if you make or provide a tax

corporations, or trusts) then substantially

Material advisors to any reportable

statement to or for the benefit of:

all of the tax benefits will be considered to

transaction must disclose certain

A taxpayer who either is required to

be provided to individuals.

information about the reportable

disclose the transaction under section

transaction by filing a Form 8918 with the

For all other transactions, the threshold

6011 because the transaction is a listed

IRS.

amount is $250,000. For listed

transaction or a transaction of interest, or

transactions, the threshold amounts are

would have been required to disclose the

Note. Form 8918 replaces Form 8264,

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

transaction under section 6011 if the

Application for Registration of a Tax

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

transaction had become a listed

Shelter.

transactions of interest, the threshold

transaction or a transaction of interest

amounts may be reduced as identified in

Material advisors who file a Form 8918

within the period of limitations;

the published guidance describing the

will receive a reportable transaction

A taxpayer who you know is or

transaction. Determine the threshold

number from the IRS. Material advisors

reasonably expect to be required to

amount separately for each reportable

must provide the reportable transaction

disclose the transaction under

transaction. The threshold amount must

number to all taxpayers and material

Regulations section 1.6011-4 because the

be met independently for each transaction

advisors for whom the material advisor

transaction is or is reasonably expected to

that is a reportable transaction and

acts as a material advisor. See

Who Is a

become a reportable transaction other

aggregation of fees among reportable

Material Advisor

below. Every taxpayer

than a listed transaction or transaction of

transactions is not required.

who has participated in a reportable

interest;

In figuring the amount of gross income

transaction (see

What Is a Reportable

A material advisor who is required to

you receive directly, or indirectly, for

Transaction, later) must also disclose the

disclose the transaction under section

material aid, assistance, or advice, include

transaction on Form 8886, Reportable

6111 because the transaction is a listed

all the following.

Transaction Disclosure Statement. For

transaction or a transaction of interest; or

Fees for a tax strategy.

more information, see Form 8886 and the

A material advisor who you know is or

Fees for advice (whether or not tax

Instructions for Form 8886.

reasonably expect to be required to

advice).

disclose the transaction under section

Who Must File?

Fees for implementing the reportable

6111 because the transaction is or is

transaction.

Generally, every material advisor to a

reasonably expected to become a

reportable transaction is required to file

reportable transaction other than a listed

Fees. Fees include consideration in

Form 8918. A material advisor can be an

transaction or transaction of interest.

whatever form paid, whether in cash or in

individual, trust, estate, partnership, or

kind, for:

Tax statement. Generally, a tax

corporation. You are not required to file

Services to analyze the transaction

statement is any statement (including

Form 8918 unless a taxpayer to whom or

(whether or not related to the tax

another person's statement), oral or

for whose benefit you provided the

tax

consequences of the transaction),

written, that relates to a tax aspect of a

statement

(defined below) entered into the

Services to implement the transaction,

transaction that causes the transaction to

reportable transaction. If you provide a tax

Services to document the transaction,

be a reportable transaction. A tax

statement to another material advisor, you

and

statement includes tax result protection

are not required to file Form 8918 unless

Services to prepare tax returns to the

that insures some or all of the tax benefits

the reportable transaction is entered into

extent return preparation fees are

of a reportable transaction.

by a taxpayer to whom or for whose

unreasonable.

benefit that material advisor provided the

Tax result protection Tax result

A fee does not include amounts paid to

tax statement.

protection includes insurance company

a person, including an advisor, in that

and other third party products commonly

person's capacity as a party to the

described as tax result insurance. For

Jun 09, 2017

Cat. No. 50150N

Instructions For Form 8918 - Material Advisor Disclosure Statement - 2017

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