Instructions For Form 8918 - Material Advisor Disclosure Statement - 2017


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
What's New
if you:
Provide any material aid, assistance, or
Threshold amount. The threshold
The IRS has created a page on
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
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
You provide material aid, assistance, or
Generally, if 70% or more of the
General Instructions
advice with respect to the organizing,
(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
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
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
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
disclose the transaction under section
Who Must File?
Fees for implementing the reportable
6111 because the transaction is or is
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
consequences of the transaction),
written, that relates to a tax aspect of a
(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
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
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


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