Instructions For Form 8918 - Material Advisor Disclosure Statement - 2017 Page 4


Material advisors must provide the
d. The amount invested in the
The penalty imposed for listed
reportable transaction number to all
reportable transaction by each individual
transactions is the greater of:
taxpayers and material advisors for whom
or entity, if known;
$200,000, or
the material advisor acts as a material
50 percent of the gross income from
e. A summary or schedule of the tax
advisor. The reportable transaction
providing aid, assistance, or advice about
treatment that each individual or entity is
number must be provided when the
the listed transaction before the date the
intended or expected to derive from
transaction is entered into, or, if the
return is filed. If the failure is intentional,
participation in the reportable transaction;
transaction is entered into before the
the percentage is 75%.
material advisor received the reportable
The name of each other material
transaction number, within 60 calendar
For more information, see section
advisor to the transaction, if known.
days from the date the reportable
6707. Form 8918 must be completed in its
2. A detailed description of the
transaction number is mailed to the
entirety with all required attachments to be
reportable transaction that describes both
material advisor.
considered complete. Stating that
the tax structure and the purported tax
“Information will be provided upon
Requirement to Keep Lists
request” or that “Details are available upon
Generally, a material advisor must
request,” or any similar statement in the
3. A copy of any designation
maintain a list identifying each entity or
space provided, is not considered a
agreement to which the material advisor is
individual to whom the advisor was a
description and may cause your
a party. See
Line 5
for more information.
material advisor to a reportable
disclosure statement to be treated as
4. Copies of any additional written
transaction. A material advisor is not
materials, including tax analyses or
required to identify an entity or individual
opinions, relating to each reportable
on the list if the entity or individual entered
Note. See Rev. Proc. 2007-21,
transaction that are material to an
into a listed transaction or a transaction of
superseded by T.D. 9686 and updated by
understanding of the intended tax
interest more than 6 years before the
Announcement 2016-01. See Regulations
treatment or tax structure of that
transaction was identified in published
section 301.6707-1 for more information.
transaction that the material advisor or any
guidance as a listed transaction or a
related party or agent of the material
transaction of interest. A separate list must
Penalty for Failure To Maintain
advisor has shown or provided to any
be prepared and maintained for each
Required Lists
individual or entity (or to their
transaction or group of substantially
representatives, tax advisors, or agents)
similar transactions.
Any person who is required to maintain a
who acquired or may acquire an interest in
list and fails to make the list available
the transaction. However, you are not
The list must be maintained for 7 years
within 20 business days of an IRS written
following the earlier of the date on which
required to retain earlier drafts of a
request must pay a penalty of $10,000 for
the material advisor last made a tax
document if you retain a copy of the final
each day of the failure after the 20th
statement relating to the transaction, or
document (or, if there is no final
business day. The penalty may be
document, the most recent draft of the
the date the transaction was last entered
assessed for failure to maintain the list in a
document) and the final document (or
into, if known. Upon IRS's written request,
form that enables the IRS to determine
each material advisor who is responsible
most recent draft) contains all the
without undue delay or difficulty the
for maintaining a list must furnish the list to
information in the earlier drafts of such
information required.
document that is material to an
the IRS. The list must be maintained in a
understanding of the purported tax
form that enables the IRS to determine
Other Penalties
treatment or the tax structure of the
without undue delay or difficulty the
information required to be maintained for
Section 6700 imposes penalties for
each list. See Regulations section
promoting abusive tax shelters and related
Dissolution or liquidation of material
301.6112-1 for more information.
advisor. Generally, if a material advisor
dissolves or liquidates before completion
Note. Go to
Section 6701 imposes penalties for
of the 7-year list maintenance period, the
aiding and abetting an understatement of
for the latest information and
person responsible under state law for
tax liability.
winding up the entity's affairs must
prepare, maintain, and furnish each
Section 7203 imposes penalties for the
Contents of the list. Each list must
component of the list on behalf of the
willful failure to file a return, supply
contain the following.
entity, unless the entity submits the list to
information, or pay tax.
1. An itemized statement containing:
OTSA within 60 days after the dissolution
or liquidation. See Regulations section
a. The name of each reportable
Section 7206 imposes penalties for
301.6112-1(d) for more information.
transaction, the citation to the notice
tax-related fraud and false statements.
number or published guidance number
identifying the transaction if the
Section 7207 imposes penalties for
Penalty for Failure To Furnish
transaction is a listed transaction or
submitting fraudulent returns, statements,
transaction of interest, and the reportable
Information Regarding Reportable
or other documents.
transaction number obtained under
section 6111;
Specific Instructions
A penalty may be imposed if you are
b. The name, address, and identifying
required to file Form 8918 and you fail to
How To Complete Form 8918
number of each individual or entity
file the return on or before the due date, or
required to be included on the list;
In order to be considered complete, Form
file false or incomplete information about a
c. The date on which each individual
8918 must be completed in its entirety with
reportable transaction.
or entity entered into the reportable
all required attachments. To be
transaction, if known;
considered complete, the information
The penalty is $50,000 for reportable
provided on the form must describe the
transactions other than listed transactions.
expected tax treatment and all potential
Instructions for Form 8918 Rev. 06-2017


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