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Notice 2004-67, 2004-41 I.R.B.

even if the conditions of

its tax-exempt, tax indifferent, or

600;

confidentiality are not legally binding.

tax-favored status.

•

Notice 2005-13, 2005-9 I.R.B. 630;

See Regulations section

In the case of a tax-exempt entity

and

1.6011-4(b)(3) for more information.

that is a party to a prohibited tax

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Notice 2007-57, 2007-29 I.R.B. 87.

shelter transaction because it

Minimum fee. For a corporation,

facilitates the transaction by reason of

or a partnership or trust in which all of

For updates to this list go to the IRS

its tax-exempt, tax indifferent, or

the owners or beneficiaries are

web page at

tax-favored status, Form 8886-T must

corporations (looking through any

corporations and click on Abusive

be filed on or before May 15 of the

partners or beneficiaries that are

Tax Shelters and Transactions. The

year following the close of the

themselves partners or trusts), the

IRS may issue new or update the

calendar year during which the

minimum fee is $250,000. For all

existing notice, regulation,

tax-exempt entity entered into the

others, the minimum fee is $50,000.

announcement, or other forms of

prohibited tax shelter transaction. See

The minimum fee includes all fees

published guidance that identify

Temporary Regulations section

paid directly or indirectly for the tax

transactions as listed transactions.

1.6033-5T(e) for more details.

strategy, advice or analysis of the

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You can find a notice or ruling in the

In the case of a tax-exempt entity

transaction (whether or not related to

Internal Revenue Bulletin at

that became a party to a prohibited

the tax consequences of the

tax shelter transaction that is a listed

transaction), implementation and

irbXX-YY.pdf, where XX is the

transaction to reduce or eliminate its

documentation of the transaction, and

two-digit year and YY is the two-digit

own tax liability, Form 8886-T must

tax preparation fees to the extent they

bulletin number. For example, you

be filed on or before the date the first

exceed customary return preparation

can find Notice 2004-67, 2004-41

tax return (whether an original or an

fees. Fees do not include amounts

I.R.B. 600, at

amended return) is filed on which the

paid to a person, including an

irs-irbs/irb04-41.pdf.

tax-exempt entity reflects a reduction

advisor, in that person’s capacity as a

or elimination of its liability for

Subsequently listed transaction.

party to the transaction.

applicable federal employment,

A subsequently listed transaction is a

Transaction with contractual

excise, or unrelated business income

transaction that is identified in

protection. A transaction with

taxes that is derived directly or

published guidance as a listed

contractual protection is a transaction

indirectly from tax consequences or

transaction after the tax-exempt entity

for which a participant (or related

tax strategy described in published

has entered into the transaction and

party as defined under section 267(b)

guidance that lists the transaction.

that was not a confidential transaction

or 707(b)) has the right to a full

See Temporary Regulations section

or transaction with contractual

refund or partial refund of fees if all or

1.6033-5T(e) for more details.

protection at the time the entity

part of the intended tax

Entities identified as a party to a

entered into the transaction. See

consequences from the transaction

prohibited tax shelter transaction

section 4965(e)(2) for more

are not sustained. It also includes a

by published guidance. In the case

information.

transaction for which fees are

of a tax-exempt entity that becomes a

Substantially similar. A

contingent on the realization of tax

party to a prohibited tax shelter

transaction is substantially similar to

benefits from the transaction. For

transaction because it is identified in

another transaction if it is expected to

exceptions and other details, see

published guidance by type, class, or

obtain the same or similar types of

Regulations section 1.6011-4(b)(4)

roles as a party to a prohibited tax

tax consequences and is either

and Rev. Proc. 2007-20, 2007-7

shelter transaction, the published

factually similar or based on the same

I.R.B. 517.

guidance will specify the due date of

or similar tax strategy. Receipt of an

Entity manager. In the case of a

Form 8886-T.

opinion regarding the tax

plan entity, entity manager means the

Subsequently listed transaction.

consequences of the transaction is

person who approves or otherwise

In the case of a tax-exempt entity that

not relevant to the determination of

causes the tax-exempt entity to be a

is a party to a prohibited tax shelter

whether the transaction is the same

party to the prohibited tax shelter

transaction because the transaction

as or substantially similar to another

transaction. See section 4965(d)(2).

was subsequently listed, Form

transaction. Further, the term

8886-T must be filed by May 15 of

substantially similar must be broadly

Recordkeeping

the year following the close of the

construed in favor of disclosure. See

The entity or entity manager must

calendar year during which the

Regulations section 1.6011-4(c)(4) for

keep a copy of all documents and

transaction was identified as a listed

examples.

other records related to a prohibited

transaction. See Temporary

Confidential transaction. A

tax shelter transaction. See

Regulations section 1.6033-5T(e) for

confidential transaction is a

Regulations section 1.6001-1(c) and

more details.

transaction this is offered under

53.6001-1 for more details.

Special transition rules. In the

conditions of confidentiality and for

case of a tax-exempt entity that

which a minimum fee (defined below)

When To File

entered into a prohibited tax shelter

was paid. A transaction is considered

transaction after May 17, 2006, but

to be offered under conditions of

General rules. Generally, the due

before January 1, 2007, and that is a

confidentiality if the advisor places a

date for filing Form 8886-T depends

party to the transaction by reason of

limitation on disclosure of the tax

on whether the tax-exempt entity is a

its tax-exempt, tax indifferent, or

treatment or tax structure of the

party to a prohibited tax shelter

tax-favored status, Form 8886-T is

transaction and the limitation on

transaction to reduce its own federal

due on or before November 5, 2007.

disclosure protects the confidentiality

tax liability or, alternatively, whether it

of the advisor’s tax strategies. The

is a party to such a transaction to

In the case of a tax-exempt entity

transaction is treated as confidential

facilitate the transaction by reason of

that entered into a listed transaction

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Instructions For Form 8886-T - Disclosure By Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction Page 2

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