Instructions For Form 8886-T - Disclosure By Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction
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4Department of the Treasury
Instructions for Form 8886-T
Internal Revenue Service
(September 2007)
Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction
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Section references are to the Internal
must be filed by the entity. If the
An Archer medical savings
Revenue Code unless otherwise noted.
tax-exempt entity is a plan entity
account.
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(defined below), Form 8886-T must
A custodial account treated as an
General Instructions
be filed by the entity manager
annuity contract under section
(defined on page 2).
403(b)(7)(A).
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Purpose of Form
A Coverdell education savings
Note. If the entity is a fully
account.
Certain tax-exempt entities (defined
self-directed qualified plan, IRA, or
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A health savings account.
below) are required to file Form
other savings arrangement, the entity
See Temporary Regulations section
8886-T to disclose information with
manager is the plan participant,
1.6033-5T for more information.
respect to each prohibited tax shelter
beneficiary, or owner who approved
transaction to which the entity is a
Party to a prohibited tax shelter
or caused the entity to be a party to
party. See Prohibited tax shelter
transaction. A tax-exempt entity is
the prohibited tax shelter transaction.
transaction below. See Party to a
a party to a prohibited tax shelter
prohibited tax shelter transaction
transaction if it:
Definitions
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below to determine if the tax-exempt
Facilitates the transaction by
entity is a party to a prohibited tax
Tax-exempt entity. A tax-exempt
reason of its tax-exempt, tax
shelter transaction. See Temporary
entity is an entity which is either a
indifferent or tax-favored status;
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plan entity (defined below) or a
Regulations section 1.6033-5T for
Enters into a listed transaction and
non-plan entity (defined below).
more information. Form 8886-T is
the tax-exempt entity’s return (original
available for public inspection.
or amended) reflects a reduction or
Non-plan entity. Non-plan
elimination of liability for applicable
A separate Form 8886-T must be
entities are tax-exempt entities
federal employment, excise, or
filed for each prohibited tax shelter
described in section 4965(c)(1),
unrelated business income taxes that
transaction.
(c)(2), or (c)(3). The following
is derived directly or indirectly from
tax-exempt entities are non-plan
In addition to filing Form 8886-T, a
tax consequences or tax strategy
entities:
tax-exempt entity and/or entity
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described in the published guidance
An organization described in
manager(s) may be liable for excise
that lists the transaction; or
section 501(c) or 501(d).
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taxes in connection with the
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Is identified in published guidance,
Entities described in section 170(c)
prohibited tax shelter transaction. For
by type, class or role, as a party to a
including a state, a possession of the
more information, see the instructions
prohibited tax shelter transaction.
United States, the District of
for Form 4720, Return of Certain
Prohibited tax shelter transaction.
Columbia, or a political subdivision of
Excise Taxes Under Chapters 41 and
Generally, a prohibited tax shelter
a state or possession of the United
42 of the Internal Revenue Code, and
transaction is a transaction that is a
States (but not including the United
the Instructions for Form 5330,
listed transaction (including
States).
Return of Excise Taxes Related to
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subsequently listed transaction), a
An Indian tribal government.
Employee Benefit Plans.
confidential transaction, or a
See Temporary Regulations
A taxable party to a prohibited tax
transaction with contractual
section 1.6033-5T for more
shelter transaction must provide a
protection. See definitions of these
information.
statement to any tax-exempt entity
terms on pages 1 and 2.
Plan entity. Plan entities are
that is party to the transaction that the
Note. In general, if the IRS
tax-exempt entities described in
transaction is a prohibited tax shelter
determines by published guidance
section 4965(c)(4), (c)(5), (c)(6), or
transaction. See Tax-exempt entity
that a transaction will be excluded
(c)(7). The following tax-exempt
below.
from the definition of listed
entities are plan entities:
If a tax-exempt entity participates
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transaction, confidential transaction,
A plan described in section 401(a)
in any reportable transaction (defined
or transaction with contractual
which includes a trust exempt from
in Regulations section 1.6011-4), the
protection, the transaction will not be
tax under section 501(a).
tax-exempt entity also may be
considered a prohibited tax shelter
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An annuity plan described in
required to file Form 8886,
transaction.
section 403(a) or annuity contract
Reportable Transaction Disclosure
described in section 403(b).
Listed transaction. A listed
Statement. For more information, see
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A qualified tuition program
transaction is a transaction that is the
the Instructions for Form 8886.
described in section 529.
same as or substantially similar to
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Frequency of disclosure. A single
An eligible deferred compensation
any of the types of transactions that
disclosure is required for each
plan described in section 457(b) that
the IRS has determined to be a tax
prohibited tax shelter transaction.
is maintained by a governmental
avoidance transaction and are
employer described in section
identified by notice, regulation, or
Who Must File
457(e)(1)(A).
other form of published guidance as a
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If the tax-exempt entity is a non-plan
An individual retirement account.
listed transaction. For existing
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entity (defined below), Form 8886-T
An individual retirement annuity.
guidance see:
Cat. No. 49104P
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