Material Advisor Disclosure Statement

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Instructions for Form 8918

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Instructions for Form 8918

Department of the Treasury
Internal Revenue Service

(Rev. October 2007)
Material Advisor Disclosure Statement
Section references are to the Internal
Revenue Code unless otherwise noted.

What’s New

• Form 8918, Material Advisor Disclosure

Statement, replaces Form 8264,
Application for Registration of a Tax
Shelter.
• Submitting a request for a ruling on
whether you are required to disclose a
particular transaction does not suspend
the due date for filing Form 8918. See
Request for Ruling on page 3.
• A new category of reportable
transaction has been added for
“transaction of interest” effective for
transactions of interest entered into after
November 1, 2006. See page 3 for
details.
• The “brief asset holding period” and
“significant book-tax difference”
categories of reportable transactions have
been eliminated. If the date you became a
material advisor for a transaction that
qualifies under either of these categories
was before the effective date of its
elimination as a reportable transaction,
the material advisor must disclose the
transaction. See Eliminated Categories
on page 3 for details, including effective
dates for the elimination of these
categories.

General Instructions
Purpose of Form
Material advisors to any reportable
transaction must disclose certain
information about the reportable
transaction by filing a Form 8918 with the
IRS. Form 8918 replaces Form 8264,
which was previously used by material
advisors for disclosure.
Material advisors who file a Form 8918
will receive a reportable transaction
number from the IRS. Material advisors
must provide the reportable transaction
number to all taxpayers and material
advisors for whom the material advisor
acts as a material advisor. See Who is a
Material Advisor below. Every taxpayer
who has participated in a reportable
transaction (see What is a Reportable
Transaction? on page 2) must also
disclose the transaction on Form 8886,
Reportable Transaction Disclosure
Statement. For more information, see
Form 8886 and the Instructions for Form
8886.

Who Must File?
Generally, every material advisor to a
reportable transaction is required to file
Form 8918. A material advisor can be an
individual, trust, estate, partnership, or

corporation. You are not required to file
Form 8918 unless a taxpayer to whom or
for whose benefit you provided the tax
statement (defined below) entered into
the reportable transaction. If you provide
a tax statement to another material
advisor, you are not required to file Form
8918 unless the reportable transaction is
entered into by a taxpayer to whom or for
whose benefit that material advisor
provided the tax statement.

Who is a Material Advisor?
You are a material advisor to a
transaction if you:
• Provide any material aid, assistance, or
advice with respect to the organizing,
managing, promoting, selling,
implementing, insuring, or carrying out
any reportable transaction, and
• You directly or indirectly receive or
expect to receive gross income in excess
of the threshold amount (defined below)
for the material aid, assistance, or advice.
You provide material aid, assistance,
or advice with respect to the organizing,
managing, promoting, selling,
implementing, insuring, or carrying out
any transaction if you make or provide a
tax statement to, or for the benefit of, a
taxpayer when any of the following
applies.
• The taxpayer is required to disclose the
transaction under Regulations section
1.6011-4 because the transaction is a
listed transaction or a transaction of
interest,
• The taxpayer would be required to
disclose a transaction under Regulations
section 1.6011-4 if the transaction had
become a listed transaction or transaction
of interest within the statute of limitations
period, or
• You knew, or reasonably expected
(when the transaction was entered into),
that the taxpayer would be required to
disclose the transaction under
Regulations section 1.6011-4 because
the transaction is, or is reasonably
expected to become, a reportable
transaction other than a listed transaction
or a transaction of interest.
Tax statement. Generally, a tax
statement is any statement (including
another person’s statement), oral or
written, that relates to a tax aspect of a
transaction that causes the transaction to
be a reportable transaction. A tax
statement includes tax result protection
that insures some or all of the tax benefits
of a reportable transaction. Tax result
protection includes insurance company
and other third party products commonly
described as tax result insurance. For
Cat. No. 50150N

more information see Regulations section
301.6111-3(b)(2)(ii).
Threshold amount. The threshold
amount of gross income is $50,000 for a
reportable transaction that provides
substantially all of the tax benefits to
individuals (looking through any
partnerships, S corporations, or trusts).
The determination of whether
substantially all of the tax benefits from a
reportable transaction are provided to
individuals is based on all the facts and
circumstances. Generally, if 70% or more
of the tax benefits (defined on page 2)
from a reportable transaction are provided
to individuals (looking through any
partnerships, S corporations, or trusts)
then substantially all of the tax benefits
will be considered to be provided to
individuals.
For all other transactions, the
threshold amount is $250,000. For listed
transactions, the threshold amounts are
reduced from $50,000 to $10,000 and
from $250,000 to $25,000. For
transactions of interest, the threshold
amounts may be reduced as identified in
the published guidance describing the
transaction. Determine the threshold
amount separately for each reportable
transaction. The threshold amount must
be met independently for each transaction
that is a reportable transaction and
aggregation of fees among reportable
transactions is not required.
In figuring the amount of gross income
you receive directly, or indirectly, for
material aid, assistance, or advice,
include all the following.
• Fees for a tax strategy.
• Fees for advice (whether or not tax
advice).
• Fees for implementing the reportable
transaction.
Fees. Fees include consideration in
whatever form paid, whether in cash or in
kind, for:
• Services to analyze the transaction
(whether or not related to the tax
consequences of the transaction),
• Services to implement the transaction,
• Services to document the transaction,
and
• Services to prepare tax returns to the
extent return preparation fees are
unreasonable.
A fee does not include amounts paid to
a person, including an advisor, in that
person’s capacity as a party to the
transaction. For example, a fee does not
include reasonable charges for the use of
capital or the sale or use of property.
The IRS will scrutinize carefully all of
the facts and circumstances to determine

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if consideration received or expected to
be received in connection with a
reportable transaction is gross income
received directly, or indirectly, for aid,
assistance, or advice.
Employee exception. Generally, you
are not considered to be a material
advisor if you make a tax statement solely
in your capacity as an employee,
shareholder, partner, or agent of another
person. In this case, any tax statement
you make will be considered to be made
by your employer, corporation,
partnership, or principal.
However, you will be treated as a
material advisor if you form or use an
entity to avoid the rules of section 6111 or
6112 or the penalties under section 6707
or 6708.
Date you became a material advisor.
You are a material advisor when all of the
following have occurred (in no particular
order):
• You make a tax statement,
• You receive (or expect to receive)
gross income in excess of the threshold
amount, and
• The transaction is entered into by the
taxpayer to whom or for whose benefit
you provided the tax statement, or in the
case of a tax statement provided to
another material advisor, when the
transaction is entered into by a taxpayer
to whom or for whose benefit that material
advisor provided a tax statement.
Note. If a transaction that was not a
reportable transaction is identified as a
listed transaction or a transaction of
interest in published guidance after the
occurrence of the 3 events described
above, you will be treated as becoming a
material advisor on the date the
transaction is identified as a listed
transaction or a transaction of interest.
You must make reasonable and good
faith efforts to determine if the taxpayer
entered into the transaction, even if you
stop providing services before the
taxpayer enters into the transaction
Post-filing advice. You are not
considered to be a material advisor
concerning a transaction if you do not
make or provide a tax statement about
the transaction until after the first tax
return reflecting tax benefit(s) of the
transaction is filed with the IRS. This
exception does not apply to you if it is
expected the taxpayer will file a
supplemental or amended return
reflecting additional tax benefits from the
transaction.

Definitions
Transaction
A transaction includes all of the relevant
elements of the expected tax treatment of
an investment, entity, plan, or
arrangement and it includes any series of
steps carried out as part of a plan.

Substantially Similar
A transaction is substantially similar to
another transaction if it is expected to

obtain the same or similar types of tax
consequences and is either factually
similar or based on the same or similar
tax strategy.
Receipt of an opinion regarding the tax
consequences of the transaction is not
relevant to determine if the transaction is
the same as or substantially similar to
another transaction. The term
substantially similar must be broadly
construed in favor of disclosure. See
Regulations section 1.6011-4(c)(4) for
examples.

Tax Benefit
A tax benefit includes deductions,
exclusions from gross income,
nonrecognition of gain, tax credits,
adjustments (or the absence of
adjustments) to the basis of property,
status as an entity exempt from federal
income taxation, and any other tax
consequences that may reduce a
taxpayer’s federal tax liability by affecting
the amount, timing, character, or source
of any item of income, gain, expense, loss
or credit.

What is a Reportable
Transaction?
A reportable transaction is a transaction
described in one or more of the following
categories. See Regulations section
1.6011-4(b) for more information.

Listed Transactions
A listed transaction is a transaction that is
the same as or substantially similar to one
of the types of transactions that the IRS
has determined to be a tax avoidance
transaction.
These transactions are identified by
notice, regulation, or other form of
published guidance as a listed
transaction. For existing guidance see:
• Notice 2004-67, 2004-41 I.R.B. 600;
• Notice 2005-13, 2005-9 I.R.B. 630; and
• Notice 2007-57, 2007-9 I.R.B. 87.
For updates to this list go to the IRS
web page at www.irs.gov/businesses/
corporations and click on Abusive Tax
Shelters and Transactions. The IRS may
issue new or update the existing notice,
regulation, or other form of guidance that
identifies transactions as listed
transactions. You can find a notice or
ruling in the Internal Revenue Bulletin at
www.irs.gov/pub/irs-irbs/irbXX-YY.pdf ,
where XX is the two-digit year and YY is
the two-digit bulletin number. For
example, you can find Notice 2004-67,
2004-41 I.R.B. 600, at www.irs.gov/pub/
irs-irbs/irb04-41.pdf.

Confidential Transactions
A confidential transaction is a transaction
that is offered to a taxpayer or related
party (as described in section 267(b) or
707(b)) under conditions of confidentiality
and for which the taxpayer (or related
party) paid an advisor a minimum fee
(defined below).
A transaction is considered to be
offered under conditions of confidentiality
if the advisor who is paid a minimum fee

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places a limitation on the disclosure of the
tax treatment or tax structure of the
transaction and the limitation on
disclosure protects the confidentiality of
the advisor’s tax strategies. The
transaction is treated as confidential even
if the conditions of confidentiality are not
legally binding on the taxpayer. See
Regulations section 1.6011-4(b)(3) for
more information.
Minimum fee. For a corporation
(excluding S corporations), or a
partnership or trust in which all of the
owners or beneficiaries are corporations
(excluding S corporations), the minimum
fee is $250,000. For all others, the
minimum fee is $50,000.
The minimum fee includes all fees for
a tax strategy, for advice (whether or not
tax advice), or for the implementation of a
transaction. Fees include payment in
whatever form paid, whether in cash or in
kind, for services to analyze the
transaction (whether or not related to the
tax consequences of the transaction), for
services to implement the transaction, for
services to document the transaction, and
for services to prepare tax returns to the
extent return preparation fees are
unreasonable. A taxpayer is treated as
paying fees to an advisor if the taxpayer
knows or should know that the amount it
pays will be paid indirectly to the advisor,
such as through a referral fee or
fee-sharing arrangement. Fees do not
include amounts paid to a person,
including an advisor, in that person’s
capacity as a party to the transaction. The
IRS will scrutinize all of the facts and
circumstances in determining whether
consideration received in connection with
a confidential transaction constitutes fees.
For purposes of determining the minimum
fee, related parties (as described in
section 267(b) or 707(b)) will be treated
as the same individual or entity.

Transactions With Contractual
Protection
A transaction with contractual protection
is a transaction for which the taxpayer, or
a related party (as described in sections
267(b) or 707(b)), has the right to a full
refund or partial refund of fees if all or part
of the intended tax consequences from
the transaction are not sustained. It also
includes a transaction for which fees are
contingent on the taxpayer’s realization of
tax benefits from the transaction. For
exceptions and other details, see
Regulations section 1.6011-4(b)(4) and
Rev. Proc. 2007-20, 2007-7 I.R.B. 517,
which provides a list of exceptions for this
type of reportable transaction.

Loss Transactions
A loss transaction is a transaction that
results in the taxpayer claiming a loss
under section 165 (described later) if the
amount of the section 165 loss is as
follows.
• For individuals, at least $2 million in
any single tax year or $4 million in any
combination of tax years. (At least
$50,000 for a single tax year if the loss

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arose from a section 988 transaction
defined in section 988(c)(1) (relating to
foreign currency transactions), whether or
not the loss flows through from an S
corporation or partnership).
• For corporations (excluding S
corporations), at least $10 million in any
single tax year or $20 million in any
combination of tax years.
• For partnerships with only corporations
(excluding S corporations) as partners
(looking through any partners that are
also partnerships), at least $10 million in
any single tax year or $20 million in any
combination of tax years, whether or not
any losses flow through to one or more
partners.
• For all other partnerships and S
corporations, at least $2 million in any
single tax year or $4 million in any
combination of tax years, whether or not
any losses flow through to one or more
partners or shareholders.
• For trusts, at least $2 million in any
single tax year or $4 million in any
combination of tax years, whether or not
any losses flow through to one or more
beneficiaries. (At least $50,000 for a
single tax year if the loss arose from a
section 988 transaction defined in section
988(c)(1) (relating to foreign currency
transactions), whether or not the loss
flows through from an S corporation or
partnership).
Section 165 loss. For this purpose, a
section 165 loss is adjusted for any
salvage value and for any other insurance
compensation received. However, a
section 165 loss does not include
offsetting gains, other income or
limitations. The full amount of a section
165 loss is included in the year it
occurred, regardless of whether all or part
of it is included in computing a net
operating loss (under section 172) or a
net capital loss (under section 1212) that
is a carryback or carryover to another
year. A section 165 loss does not include
any portion of a loss attributable to a
capital loss carryback or carryover from
another year that is treated as a deemed
capital loss under section 1212.
To determine if a transaction results in
a taxpayer claiming a loss that meets the
threshold amounts over a combination of
tax years, only losses claimed in the tax
year the transaction is entered into and
the 5 succeeding tax years are combined.
The types of losses included in this
category are section 165 losses (including
amounts deductible under a provision that
treats a transaction as a sale or other
disposition or otherwise results in a
deduction under section 165). However,
this category does not include losses
described in Rev. Proc. 2004-66, 2004-50
I.R.B. 966 (or future published guidance).

Transactions of Interest
A transaction of interest is a transaction
that is the same as or substantially similar
to one of the types of transactions that the
IRS has identified by notice, regulation, or
other form of published guidance as a

transaction of interest. It is a transaction
that the IRS and Treasury Department
believe has a potential for tax avoidance
or evasion, but for which there is not
enough information to determine if the
transaction should be identified as a tax
avoidance transaction. The requirement
to disclose transactions of interest applies
to transactions of interest entered into
after November 1, 2006. For existing
guidance see Notice 2007-72, 2007- 36
I.R.B. 544 and Notice 2007-73, 2007-36
I.R.B. 545. The IRS may issue new or
update the existing notice, regulation, or
other form of guidance that identifies a
transaction as a transaction of interest.

Eliminated Categories
Transactions With a Brief Asset
Holding Period. The disclosure
requirement for this category has been
eliminated for transactions entered into on
or after August 3, 2007. However, this
does not relieve taxpayers of any
disclosure obligations for brief asset
holding transactions that were entered
into before August 3, 2007. The rules for
brief asset holding period reportable
transactions entered into before August 3,
2007, are contained in Regulations
section 1.6011-4 in effect prior to August
3, 2007.
Transactions With a Significant
Book-Tax Difference. The disclosure
requirement for this category has been
eliminated. Transactions with a significant
book-tax difference that would have been
required to be disclosed with returns due
on dates (including extensions) after
January 5, 2006, are no longer reportable
transactions.
However, this does not relieve
taxpayers of any disclosure obligations for
significant book-tax difference
transactions that should have been
disclosed on a return with a due date prior
to January 6, 2006. For more details, see
Notice 2006-6, 2006-5 I.R.B. 385, and
Rev. Proc. 2004-67, 2004-50 I.R.B. 966.

Exceptions to Reportable
Transaction Categories, Published
Guidance
A transaction is not considered a
reportable transaction if the IRS makes a
determination in published guidance that
it is not subject to the reporting
requirements. For more information see
the following.
• Rev. Proc. 2007-20, 2007-7 I.R.B. 517;
• Rev. Proc. 2004-66, 2004-50 I.R.B.
966;
• Rev. Proc. 2004-67, 2004-50 I.R.B.
967; and
• Rev. Proc. 2004-68, 2004-50 I.R.B.
969.
The IRS may also determine by
individual letter ruling that an individual
letter ruling request satisfies the reporting
requirements. See Request for Ruling,
below, for more details on submitting a
letter ruling request.

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Request for Ruling
You may request a ruling from the IRS to
determine whether a specific transaction
is a reportable transaction. The potential
obligation of a material advisor and the
taxpayer to disclose the transaction will
not be suspended during the period that
the ruling request is pending. Therefore,
even if you have a ruling request with the
IRS, you must still complete and file this
form in order to avoid potential
penalties.See Rev. Proc. 2007-1, 2007-1
I.R.B. 1 for information on ruling requests.

When To File
The material advisor’s disclosure
statement must be filed with the Office of
Tax Shelter Analysis (OTSA) by the last
day of the month that follows the end of
the calendar quarter in which the advisor
became a material advisor with respect to
the reportable transaction or in which
circumstances occur to require an
amended disclosure statement. See Date
you became a material advisor on page 2.

Where To File
In order to file, mail your completed Form
8918 to:
Internal Revenue Service
OTSA Mail Stop 4916
1973 North Rulon White Blvd.
Ogden, Utah 84404

Furnishing a Reportable
Transaction Number
Receipt of a reportable transaction
number does not indicate that the IRS
has reviewed, examined, or approved the
transaction.
Material advisors must provide the
reportable transaction number to all
taxpayers and material advisors for whom
the material advisor acts as a material
advisor. The reportable transaction
number must be provided when the
transaction is entered into, or, if the
transaction is entered into before the
material advisor received the reportable
transaction number, within 60 calendar
days from the date the reportable
transaction number is mailed to the
material advisor.

Requirement To Keep Lists
Generally, a material advisor must
maintain a list identifying each entity or
individual with respect to who the advisor
acted as a material advisor with respect
to a reportable transaction. A material
advisor is not required to identify an entity
or individual on the list if the entity or
individual entered into a listed transaction
or a transaction of interest more than 6
years before the transaction was
identified in published guidance as a
listed transaction or a transaction of
interest.
A separate list must be prepared and
maintained for each transaction or group
of substantially similar transactions. The
list must be maintained for 7 years
following the earlier of the date on which
the material advisor last made a tax

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statement relating to the transaction, or
the date the transaction was last entered
into, if known. Upon IRS’ written request,
each material advisor who is responsible
for maintaining a list must furnish the list
to the IRS. The list must be maintained in
a form that enables the IRS to determine
without undue delay or difficulty the
information required to be maintained for
each list. See Regulations section
301.6112-1 for more information.
Note. The IRS does not require you to
submit detailed information with this form
with respect to the requirement to keep
lists. However, to assist you in
maintaining these lists, we anticipate that
an electronic worksheet will be provided
in the near future on www.irs.gov.
Continue to monitor this website for future
updates. You may need to keep
additional records for accounting or state
income tax purposes.
Contents of the list. Each list must
contain the following.
1. An itemized statement containing:
a. The name of each reportable
transaction, the citation to the notice
number or published guidance number
identifying the transaction if the
transaction is a listed transaction or
transaction of interest, and the reportable
transaction number obtained under
section 6111;
b. The name, address, and identifying
number of each individual or entity
required to be included on the list;
c. The date on which each individual
or entity entered into the reportable
transaction, if known;
d. The amount invested in the
reportable transaction by each individual
or entity, if known;
e. A summary or schedule of the tax
treatment that each individual or entity is
intended or expected to derive from
participation in the reportable transaction;
and
f. The name of each other material
advisor to the transaction, if known.
2. A detailed description of the
reportable transaction that describes both
the tax structure and the purported tax
treatment.
3. A copy of any designation
agreement to which the material advisor
is a party. See Line 5 for more
information.
4. Copies of any additional written
materials, including tax analyses or
opinions, relating to each reportable
transaction that are material to an
understanding of the intended tax
treatment or tax structure of that
transaction that the material advisor or
any related party or agent of the material
advisor has shown or provided to any
individual or entity (or to their
representatives, tax advisors, or agents)
who acquired or may acquire an interest
in the transaction. However, you are not
required to retain earlier drafts of a
document if you retain a copy of the final
document (or, if there is no final
document, the most recent draft of the

document) and the final document (or
most recent draft) contains all the
information in the earlier drafts of such
document that is material to an
understanding of the purported tax
treatment or the tax structure of the
transaction.
Dissolution or liquidation of material
advisor. Generally, if a material advisor
dissolves or liquidates before completion
of the 7 year list maintenance period, the
person responsible under state law for
winding up the entity’s affairs must
prepare, maintain, and furnish each
component of the list on behalf of the
entity, unless the entity submits the list to
OTSA within 60 days after the dissolution
or liquidation. See Regulations section
301.6112-1(d) for more information.

Penalties
Penalty For Failure To Furnish
Information Regarding Reportable
Transactions
A penalty may be imposed if you are
required to file Form 8918 and you fail to
file the return on or before the due date,
or file false or incomplete information
about a reportable transaction.
The penalty is $50,000 for reportable
transactions other than listed
transactions. The penalty imposed for
listed transactions is the greater of:
• $200,000, or
• 50 percent of the gross income from
providing aid, assistance, or advice about
the listed transaction before the date the
return is filed. If the failure is intentional,
the percentage is 75%.
For more information, see section
6707. Form 8918 must be completed in
its entirety with all required attachments
to be considered complete. Stating that
“Information will be provided upon
request” or that “Details are available
upon request,” or any similar statement in
the space provided, is not considered a
description and may cause your
disclosure statement to be treated as
incomplete.
Note. Rev. Proc. 2007-21, 2007-9 I.R.B.
613 provides guidance for requesting
rescission of certain penalty assessments
under sections 6707 or 6707A with
respect to a nonlisted reportable
transaction.

Penalty For Failure To Maintain
Required Lists
A penalty may be imposed if you are
required to maintain a list under section
6112(a) and you fail to make the list
available upon written request to the
Secretary in accordance with section
6112(b) within 20 business days after the
date of the request or such other period
provided by published guidance.
The penalty is $10,000 for each day of
the failure after the date the list is
required to be made available. The
penalty may be assessed for failure to
maintain the list in a form that enables the

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IRS to determine without undue delay or
difficulty the information required.

Other Penalties
An additional civil penalty under section
6700 may be imposed if you directly or
indirectly organize, participate in the sale
of, or promote an abusive tax shelter and
you cause other parties to make or
furnish either:
• False or fraudulent statements as to
any material matter, or
• Gross valuation overstatements as to
any material matter.
For false or fraudulent statement
violations, the penalty is 50 percent of the
gross income from the activity. For gross
valuation overstatement violations, the
penalty is the lesser of $1,000 or 100% of
the gross income derived (or to be
derived) from the activity.
Penalties may also be imposed if you
knowingly aid and abet in the
understatement of the tax liability of
another person. The penalty is $1,000
($10,000 for corporate tax returns and
documents).
Criminal penalties for failure to file on
time and for filing a false or fraudulent
return are provided by sections 7203,
7206, and 7207.

Specific Instructions
How To Complete Form 8918
In order to be considered complete, Form
8918 must be completed in its entirety
with all required attachments. To be
considered complete, the information
provided on the form must describe the
expected tax treatment and all potential
tax benefits expected to result from the
transaction, describe any tax result
protection with respect to the transaction,
and identify and describe the transaction
in sufficient detail for the IRS to be able to
understand the tax structure of the
reportable transaction. A Form 8918
containing a statement that information
will be provided upon request is not
considered a complete disclosure
statement.
If the information required exceeds the
space provided, complete as much
information as possible in the available
space and attach the remaining
information on additional sheets. The
additional sheets must be in the same
order as the lines to which they
correspond. You must also include your
name and identifying number at the top of
each additional sheet. Do not write “See
Attached” on the form and provide all the
information on an attached statement.

Material Advisor Identifying
Information
Individuals. If the material advisor is an
individual, enter the first name, middle
initial (if any), and last name; the social
security number; the phone number, and
the complete address.

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Entities. If the material advisor is an
entity, enter the full name of the entity as
shown on its income tax return, the
employer identification number, and the
complete address. See Item A for contact
information.

Item A
Contact information. If the material
advisor is an entity, list the name of a
contact person along with a contact
telephone number. If the material advisor
is an individual, you may disregard this
line.

Item B
Protective disclosure. Indicate if you
are filing on a protective basis by
checking the appropriate box. If you are
uncertain if a transaction must be
disclosed, check the “Yes” box and
disclose the transaction in accordance
with these instructions.
On line 6a, you must explain why you
are filing the disclosure on a protective
basis. Generally, the IRS will not treat
disclosure statements filed on a protective
basis any differently than other disclosure
statements filed on Form 8918. An
incomplete form containing a statement
that information will be provided on
request is not a complete disclosure
statement. For a protective disclosure to
be effective, you must properly complete
Form 8918 and provide all required
information. See How to Complete Form
8918 on page 4 for more information.

Item C
Answer “Yes” if this is the original Form
8918 for this reportable transaction. If this
is an amendment to a previously filed
Form 8918 for the reportable transaction,
answer “No” and enter the reportable
transaction number previously provided
for the reportable transaction by the IRS.
The reportable transaction number is a
9-digit or 11-digit number and was
formerly known as a tax shelter
registration number or registration
number.
Amended statement. An amended
statement must be filed if information
previously provided is no longer accurate,
if additional information that was not
disclosed becomes available, or if there
are material changes to the transaction.

Line 1
Enter the name, if any, by which the
transaction is known or commonly
referred to by either yourself or published
guidance. If no name exists, provide a
short identifying description of this
transaction that distinguishes it from other
reportable transactions in which you have
participated (or may participate in the
future). Do not report more than one
transaction on this form unless the
transactions are the same or substantially
similar. See Substantially Similar on page
2.

Line 2

Lines 7a and 7b

Check the box(es) for all categories that
apply to the transaction being reported.
The reportable transaction categories are
described under What is a Reportable
Transaction? on page 2.

Check the box(es) for all categories that
apply to the transaction being reported.
Indicate the related parties that are
needed and how they are related.
Indicate the role of tax- exempt entities if
they are required for the transaction. In
addition, if a foreign entity is required,
indicate how and why the foreign entity is
used, along with what country is used if a
particular country is required for the
transaction. If you need more space,
follow the instructions under How to
Complete Form 8918 on page 4.

If the transaction is a listed
transaction, you must check the
CAUTION listed transaction box in addition to
any others that apply.

!

Line 3
Identify the notice, revenue ruling,
regulation (for example, Regulations
section 1.643(a)-8 or Notice 2003-81,
2003-51 I.R.B. 1 modified and
supplemented by Notice 2007-71,
2007-35 I.R.B. 472), announcement, or
other published guidance that identified
the transaction as a listed transaction or
transaction of interest. For listed
transactions, identify the guidance as
shown in Notice 2004-67, 2004-50 I.R.B.
967 or later IRS guidance.

Line 9
Identify the types of financial instruments
required by the transaction (loan, stocks,
bonds, notes, original issue discounts,
domestic and foreign currency
agreements, swaps, futures, notional
principal contracts, options, input or risk
hedges, etc.). If you need more space,
follow the instructions under How to
Complete Form 8918 on page 4.

Line 10

Line 4
Enter the latest of the following dates.
• The date you made a tax statement
with regard to the transaction.
• The date you received or had an
expectation that you would receive gross
income in excess of the threshold amount
(defined on page 1).
• The date the transaction was entered
into by the taxpayer.
The latest of these dates is the date you
became a material advisor. See Date you
became a material advisor on page 2.

Line 5
If more than one material advisor is
required to disclose a reportable
transaction under this section, the
material advisors may designate by
written agreement a single material
advisor to disclose the transaction. The
transaction must be disclosed by the last
day of the month following the end of the
calendar quarter that includes the earliest
date on which a material advisor who is a
party to the agreement became a material
advisor to the transaction.
The designation of one material
advisor to disclose the transaction
CAUTION does not relieve the other material
advisors of the obligation to disclose the
transaction to the IRS in accordance with
these instructions, if the designated
material advisor fails to disclose the
transaction to the IRS in a timely manner.

!

Line 6a
Provide a concise statement indicating
your role as a material advisor to this
transaction. See Who is a Material
Advisor? on page 1. If you are filing a
protective disclosure, you must explain
why you believe you are not a material
advisor. If you need more space, follow
the instructions under How to Complete
Form 8918 on page 4.

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Check all the boxes that apply for the tax
benefits expected from the transaction. A
tax benefit includes deductions,
exclusions from gross income,
nonrecognition of gain, tax credits,
adjustments (or the absence of
adjustments) to the basis of property,
status as an entity exempt from federal
income taxation, and any other tax
consequences that may reduce a
taxpayer’s federal tax liability by affecting
the amount, timing, character, or source
of any item of income, gain, expense, loss
or credit. Check the “Other” box for tax
benefits not specifically described by a
box and identify the tax benefit(s) in the
space provided. If you need more space,
follow the instructions under How to
Complete Form 8918 on page 4.

Line 13
Describe all of the relevant facts about
the reportable transaction including the
following.
1. Tax benefits causing the
transaction to be reportable.
2. Years affected by the transaction.
3. Steps of the transaction including:
a. Agreements.
b. Property transfers and acquisitions.
c. Liability assumptions.
d. Obligation fulfillment.
e. Sales.
f. Entity formation or dissolution.
g. Other relevant events. Other
relevant events may include but are not
limited to tax result protection. Tax result
protection includes insurance company
and other third party products commonly
described as tax result insurance.
4. Nature of the transaction (cash,
loan, service, other).
5. Purpose of each step in
accomplishing the tax benefits and
consequences.

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Instructions for Form 8918

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6. Where and how each party to the
transaction (entered on lines 7a, 7b, and
8a and 8b) is used, including their roles.
7. The economic and business
reasons for the transaction and its
structure (describe market or business
conditions creating the tax benefit or

consequence and its financial reporting, if
known).
8. How the financial instruments
(entered on line 9) are used in the
transaction.
9. How the Internal Revenue Code
sections (entered on line 12) enable you
to obtain the tax treatment.

If you need more space, follow the
instructions under How to Complete Form
8918 on page 4.

Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws
of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws. We
may give the information to the Department of Justice and to other federal agencies, as provided by law. We may give it to cities,
states, the District of Columbia, and U.S. commonwealths or possessions to carry out their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal
law enforcement and intelligence agencies to combat terrorism. A penalty may be imposed if you are required to file this return and
fail to file by the due date or provide incomplete or false information.
Our authority to ask for information is section 6111 and its regulations, which require you to file a return or statement with us with
respect to any reportable transaction for which you are a material advisor. Your response is mandatory under these sections.
Section 6109 requires that you provide your identifying number on what you file. This is so we know who you are, and can process
your return and other papers. You must fill in all parts of the tax form that apply to you.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their
contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are
confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing, copying, assembling, and sending the form to the IRS . . . . . . . . . . . . . . . . . . . .

33 hr., 14 min.
3 hr., 34 min.
4 hr., 16 min.

If you have comments concerning the accuracy of this time estimate or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the form to this address. Instead,
see Where To File on page 3.

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