Reportable Transaction Disclosure Statement

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Instructions for Form 8886 (Rev. 3-2010)

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Instructions for Form 8886

Department of the Treasury
Internal Revenue Service

(Rev. March 2010)
(Use with the December 2007 revision of Form 8886.)
Reportable Transaction Disclosure Statement
Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
Purpose of Form
Use Form 8886 to disclose information
for each reportable transaction in which
you participated. See Participation in a
Reportable Transaction, below, to
determine if you participated in a
reportable transaction. For more
information on the disclosure rules, see
Regulations section 1.6011-4.
Generally, you must file a separate
Form 8886 for each reportable
transaction. However, you may report
more than one transaction on one form
if the transactions are the same or
substantially similar. See the definition
of substantially similar below.
The fact that a transaction must be
reported on this form does not mean
the tax benefits from the transaction will
be disallowed.
Prohibited tax shelter transactions.
Generally, the term ‘‘prohibited tax
shelter transaction’’ means listed
transactions, transactions with
contractual protection, or confidential
transactions. See the definition of these
categories below. There may be
additional disclosure requirements for
tax-exempt entities with respect to
these types of transactions. If you are a
tax-exempt entity and you are a party to
a prohibited tax shelter transaction, you
may be required to file Form 8886-T,
Disclosure by Tax-Exempt Entity
Regarding Prohibited Tax Shelter
Transaction, in addition to filing Form
8886. For more information, see the
Instructions for Form 8886-T.

Definitions
Transaction
A transaction includes all of the factual
elements relevant to the expected tax
treatment of any 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 the
determination of whether the
transaction is the same as or
substantially similar to another
transaction. Further, 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.

Tax Structure
The tax structure of a transaction is any
fact that may be relevant to
understanding the purported or claimed
federal income tax treatment of the
transaction.

Who Must File
Any taxpayer, including an individual,
trust, estate, partnership, S corporation,
or other corporation, that participates in
a reportable transaction and is required
to file a federal tax return or information
return must file Form 8886. However, a
regulated investment company (RIC)
(as defined in section 851) or an
investment vehicle that is at least 95%
owned by one or more RICs at all times
during the course of a transaction is not
required to file Form 8886 for any
transaction other than a listed
transaction (as defined below) or a
transaction of interest (as defined on
page 3).
Cat. No. 34911S

Participation in a
Reportable Transaction
A reportable transaction is a transaction
described in one or more of the
following categories.

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 2009-59,
2009-31 I.R.B. 170, available at www.
irs.gov/pub/irs-irbs/irb09-31.pdf. 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 listed
transactions will also be periodically
updated in future issues of the Internal
Revenue Bulletin. 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 2009-59, 2009-31 I.R.B. 170, at
www.irs.gov/pub/irs-irbs/irb09-31.pdf.
You have participated in a listed
transaction if any of the following
applies.
• Your tax return reflects tax
consequences or a tax strategy
described in published guidance that
lists the transaction.
• You know or have reason to know
that tax benefits reflected on your tax
return are derived directly or indirectly
from such tax consequences or tax
strategy.
• You are in a type or class of
individuals or entities that published
guidance treats as participants in a
listed transaction.
Exception. If you participated in a
transaction that is the same as or
substantially similar to the transaction
described in Notice 2002-35, 2002-21
I.R.B. 992, available at www.irs.gov/
pub/irs-irbs/irb02-21.pdf (tax avoidance
using notional principal contracts) solely
as a result of your direct or indirect
interest in a pass-through entity, you

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are not required to disclose the
transaction on Form 8886. For more
information, see Notice 2006-16,
2006-9 I.R.B. 538, available at www.irs.
gov/pub/irs-irbs/irb06-09.pdf.

Confidential Transactions
A confidential transaction is a
transaction that is offered to you or a
related party (as described in section
267(b) or 707(b)) under conditions of
confidentiality and for which you or a
related party paid an advisor a
minimum fee (defined below). A
transaction is considered to be offered
under conditions of confidentiality if the
advisor places a limitation on your
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
you. 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. You are treated as
paying fees to an advisor if you know or
should know that the amount you pay
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.
You have participated in a
confidential transaction if your tax
return reflects a tax benefit from the
transaction and your disclosure of the
tax treatment or tax structure of the
transaction is limited as described

above. If disclosure by a pass-through
entity (partnership, S corporation, or
trust) is limited, but disclosure by the
partner, shareholder, or beneficiary is
not limited, then the pass-through entity
(but not the partner, shareholder, or
beneficiary) has participated in the
confidential transaction.

A loss transaction is a transaction that
results in your 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
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 purposes of
the above threshold amounts, a section
165 loss is adjusted for any salvage
value and for any insurance or other
compensation received. However, a
section 165 loss does not take into
account offsetting gains, other income,
or limitations. The full amount of a loss
is taken into account in the year it was
sustained, regardless of whether all or
part of the loss enters into the
computation of 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.
In determining whether a transaction
results in a taxpayer claiming a loss
that meets the threshold amounts over
a combination of tax years as described
above, only losses claimed in the tax
year that 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, available
at www.irs.gov/pub/irs-irbs/irb04-50.pdf
(or future published guidance).
You have participated in a loss
transaction if your tax return reflects a
section 165 loss that equals or exceeds
the applicable threshold amount. If you

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Instructions for Form 8886 (Rev. 3-2010)

Transactions With
Contractual Protection
A transaction with contractual
protection is a transaction for which you
have, 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 your 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,
available at www.irs.gov/pub/irs-irbs/
irb07-07.pdf.
You have participated in a
transaction with contractual protection if
your tax return reflects a tax benefit
from the transaction and, as described
above, you have the right to a full or
partial refund of fees or the fees are
contingent. All facts and circumstances
relating to the transaction will be
considered when determining whether
a fee is refundable or contingent,
including the right to reimbursements of
amounts that the parties to the
transaction have not designated as
fees or any agreement to provide
services without compensation. If a
pass-through entity (partnership, S
corporation, or trust) has the right to a
full or partial refund of fees or has a
contingent fee arrangement, but the
partner, shareholder, or beneficiary
individually does not, then the
pass-through entity (but not the partner,
shareholder, or beneficiary) has
participated in the transaction with
contractual protection.

Loss Transactions

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are a partner, shareholder, or
beneficiary of a pass-through entity
(partnership, S corporation, or trust),
you have participated in a loss
transaction if your tax return reflects a
section 165 loss allocable to you from
the pass-through entity (disregarding
netting at the entity level) that equals or
exceeds the applicable threshold
amount. For this purpose, a tax return
is deemed to reflect the full amount of
the section 165 loss allocable to the
taxpayer, regardless of whether all or
part of the loss enters in the
computation of a net operating loss
under section 172 or net capital loss
under section 1212 that the taxpayer
may carry back or carry over to another
year.

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
2009-55, 2009-31 I.R.B. 170, available
at www.irs.gov/pub/irs-irbs/irb09-31.pdf.
The IRS may issue a new, or update
the existing, notice, regulation, or other
form of guidance that identifies a
transaction as a transaction of interest.
You have participated in a
transaction of interest if you are one of
the types or classes of individuals or
entities identified as participants in the
transaction in the published guidance
describing the transaction of interest.

Eliminated Categories
Transactions With a Significant
Book-Tax Difference
The disclosure requirement for this
category has been eliminated by Notice
2006-6, 2006-5 I.R.B. 385, available at
www.irs.gov/pub/irs-irbs/irb06-05.pdf.
Transactions with a significant book-tax
difference are no longer reportable
transactions. These transactions do not
need to be disclosed on Form 8886.
For more details, see Notice 2006-6.
If the significant book-tax difference
transaction is also a transaction
described in any of the remaining
reportable transaction categories, the
transaction must still be disclosed. For
Instructions for Form 8886 (Rev. 3-2010)

more information, see the instructions
for line 2 on page 6.
However, Notice 2006-6 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. If you are
filing Form 8886 to disclose a
transaction with a significant book-tax
difference that was due prior to January
6, 2006, write “book-tax difference” in
parentheses after the name of the
transaction on line 1a. If any other
disclosure category also applies, check
the appropriate box(es) on line 2. For
more information on book-tax difference
transactions, see Regulations section
1.6011-4 in effect before August 3,
2007, and the instructions for Form
8886 for the year in which the
transaction should have been
disclosed.

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.
This category includes transactions
that result in your claiming a tax credit
(including a foreign tax credit) of more
than $250,000 if the asset giving rise to
the credit was held by you for 45 days
or less. For purposes of determining the
holding period of the asset, the
principles of section 246(c)(3) and
(c)(4) apply. Disregard any transactions
generating a foreign tax credit for
withholding taxes or other taxes
imposed on a dividend that are not
disallowed under section 901(k)
(including transactions eligible for the
exception for security dealers under
section 901(k)(4)). See Rev. Proc.
2004-68, 2004-50 I.R.B. 969, available
at www.irs.gov/pub/irs-irbs/irb04-50.pdf,
for a list of exceptions for this category
of reportable transaction.

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
Rev. Proc. 2004-66; Rev. Proc.
2004-67, 2004-50 I.R.B. 967, available

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at www.irs.gov/pub/irs-irbs/irb04-50.pdf;
Rev. Proc. 2004-68; and Rev. Proc.
2007-20. 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
information on submitting a letter ruling
request.

Shareholders of Foreign
Corporations
Special rules apply to determine
whether a reporting shareholder of a
foreign corporation participated in a
reportable transaction. A reporting
shareholder means a U.S. shareholder
in a controlled foreign corporation, or a
10% shareholder (by vote or value) of a
qualified electing fund. For all
categories of reportable transactions
except transactions of interest, a
reporting shareholder participates in a
reportable transaction if the foreign
corporation would be considered to
participate in the transaction if it were a
domestic corporation filing a tax return
reflecting items from the transaction. A
reporting shareholder of a foreign
corporation participates in a transaction
of interest if the published guidance
identifying the transaction includes the
reporting shareholder among the types
or classes of individuals or entities
identified as participants. See
Regulations section 1.6011-4(c)(3)(i)(G)
for details.

Request for Ruling
You may request a ruling from the IRS
to determine whether a transaction
must be disclosed. The request for a
ruling must be submitted to the IRS by
the date Form 8886 would otherwise be
required to be filed. See Regulations
section 1.6011-4(f). For more
information on requesting a ruling, see
Rev. Proc. 2009-1, 2009-1 I.R.B. 1,
available at www.irs.gov/pub/irs-irbs/
irb09-01.pdf, or subsequent IRS
guidance. The potential obligation of
the taxpayer to disclose the transaction
will not be suspended during the period
that the ruling request is pending.

Recordkeeping
You must keep a copy of all documents
and other records related to a
reportable transaction. See Regulations
section 1.6011-4(g) for more details.

When and How To File
Attach Form 8886 to your income tax
return or information return (including a
partnership, S corporation, or trust
return), including amended returns, for
each tax year in which you participated
in a reportable transaction. If a
reportable transaction results in a loss
or credit carried back to a prior tax

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year, attach Form 8886 to an
application for tentative refund (Form
1045 or 1139) or amended return for
the carryback years.
Also file separately. If this is an
initial year filing of Form 8886, send an
exact copy of the form to the Office of
Tax Shelter Analysis at the following
address when you file the form with
your tax return:
Internal Revenue Service
OTSA Mail Stop 4915
1973 North Rulon White Blvd.
Ogden, Utah 84404
If you file your income tax return
electronically, the copy sent to OTSA
must show exactly the same
information, word for word, provided
with the electronically filed return and it
must be provided on the official IRS
Form 8886 or an exact copy of the
form. If you use a computer-generated
or substitute Form 8886, it must be an
exact copy of the official IRS form. See
the instructions for your income tax
return for information on electronic filing
and substitute forms.

Special Filing Rules
60-day OTSA Extension
If you are a partner in a partnership,
shareholder in an S corporation, or
beneficiary of a trust who receives a
timely Schedule K-1 less than 10
calendar days before your return due
date (including extensions) and, based
on receipt of the timely Schedule K-1,
you determine that you participated in a
reportable transaction, Form 8886 will
not be considered late if you file Form
8886 with OTSA within 60 days after
the due date of your return including
extensions.

Designation as a Listed
Transaction and/or Transaction
of Interest After Filing Tax
Return
If a transaction becomes a listed
transaction or a transaction of interest
after you file a tax return (including an
amended return) reflecting your
participation in the listed transaction or
transaction of interest and before the
running of the period of limitations for
assessment of tax for any tax year in
which you participated in the listed
transaction or transaction of interest,
then you must file Form 8886 according
to the following rules.
• Listed Transaction entered into
before August 3, 2007. If you entered
into a transaction before August 3,
2007, that later becomes a listed
transaction, then you must attach Form
8886 to the first tax return you file after
the date the transaction became a
listed transaction. Also file Form 8886

with OTSA as provided in Also file
separately, above.
• Listed Transaction entered into
after August 2, 2007. If you entered
into a transaction after August 2, 2007,
that later becomes a listed transaction,
then you must file Form 8886 with
OTSA within 90 days after the date on
which the transaction became a listed
transaction.
• Transaction of Interest entered
into after November 1, 2006. If you
entered into a transaction after
November 1, 2006, that later becomes
a transaction of interest, then you must
file Form 8886 with OTSA within 90
days after the date on which the
transaction became a transaction of
interest.
However, the published guidance
under which the transaction becomes a
listed transaction or transaction of
interest may also provide the time for
filing Form 8886. You must file Form
8886 in the time and in the manner
stated above regardless of whether you
participated in the transaction in the
year in which the transaction became a
listed transaction or transaction of
interest.

Subsequent Loss Transactions
If a transaction becomes a loss
transaction because the losses equal or
exceed the threshold amounts
described above in Loss Transactions
on page 2, Form 8886 must be filed as
an attachment to your income tax
return or information return for the first
tax year in which the threshold amount
is reached and to any subsequent
income tax return or information return
that reflects any amount of section 165
loss from the transaction.

Multiple Disclosures
If you are required to file Form 8886,
you must do so regardless of whether
you also plan to disclose the
transaction under other published
guidance, for example, Regulations
section 1.6662-3(c)(2).

Penalties
There is a monetary penalty under
section 6707A for the failure to include
on any return or statement any
information required to be disclosed
under section 6011 with respect to a
reportable transaction. The penalty for
failure to include information with
respect to a reportable transaction,
other than a listed transaction, is
$10,000 in the case of an individual,
and $50,000 in any other case. The
penalty for failure to include information
with respect to a listed transaction is
$100,000 in the case of an individual
and $200,000 in any other case. This
penalty is in addition to any other
penalty that may be imposed. For

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information, see section 6707A; Notice
2005-11, 2005-7 I.R.B. 493, available
at www.irs.gov/pub/irs-irbs/irb05-07.pdf;
and Rev. Proc. 2007-21, 2007-9 I.R.B.
613, available at www.irs.gov/pub/
irs-irbs/irb07-09.pdf.
If you have a reportable transaction
understatement, an accuracy-related
penalty may be imposed under section
6662A. This penalty applies to the
amount of the understatement that is
attributable to any listed transaction and
any reportable transaction (other than a
listed transaction) with a significant tax
avoidance purpose. The penalty
increases for transactions that are not
disclosed on Form 8886 in accordance
with these instructions. If the
transaction is not disclosed and a
reportable transaction understatement
exists, you may not have a reasonable
cause and good faith defense under
section 6664(d) with respect to the
accuracy-related penalty under section
6662A. For more information, see
section 6662A and Notice 2005-12,
2005-7 I.R.B. 494, available at www.irs.
gov/pub/irs-irbs/irb05-07.pdf.
A penalty under section 6707A is
assessed for each failure by any
individual or entity required to file a
Form 8886 if the individual or entity (a)
fails to attach Form 8886 to the
appropriate original, amended return, or
application for tentative refund, (b) fails
to file the form with OTSA, if required,
or (c) files a form that fails to include all
the information required (or includes
incorrect information). The Form 8886
must be completed in its entirety with
all required attachments to be
considered complete. Do not enter
“Information provided upon request” or
“Details available upon request,” or any
similar statement in the space provided.
Inclusion of any such statements
subjects you to penalty under sections
6707A and 6662A.
If you are required to pay a
penalty under section 6707A or
CAUTION section 6662A, you may be
required to disclose them on reports
filed with the Securities and Exchange
Commission. If you do not disclose
these penalties, you may incur
additional penalties under section
6707A(e). For more information, see
section 6707A(e) and Rev. Proc.
2005-51, 2005-33 I.R.B. 296, available
at www.irs.gov/pub/irs-irbs/irb05-33.pdf,
amplified by Rev. Proc. 2007-25,
2007-12 I.R.B. 761, available at www.
irs.gov/pub/irs-irbs/irb07-12.pdf.

!

Previously Undisclosed
Listed Transactions
If you are required to disclose a listed
transaction and fail to do so within the
time and manner prescribed under
section 6011 and the related
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regulations, then under section
6501(c)(10) the period to assess any
tax with respect to the listed transaction
will be extended beyond the normal
assessment period until one year after
the earlier of either:
• The date you disclose the transaction
by filing Form 8886 in the manner
prescribed in Rev. Proc. 2005-26,
2005-17 I.R.B. 965, available at www.
irs.gov/pub/irs-irbs/irb05-17.pdf (or
subsequently published guidance), or
• The date that a material advisor
provides the information required under
section 6112 in response to a request
by the IRS under section 6112.
Section 6501(c)(10) is effective for
tax years with respect to which the
limitations period on assessment did
not expire prior to October 22, 2004.
Section 6501(c)(10) does not revive an
assessment period that expired prior to
October 22, 2004. For more
information, see Rev. Proc. 2005-26.
If you are filing Form 8886 to
disclose a previously undisclosed listed
transaction for purposes of section
6501(c)(10), submit the form and a
cover letter to the Internal Revenue
Service Center where your original tax
return was filed. Write across the top of
page 1 of each Form 8886 the following
statement: “Section 6501(c)(10)
Disclosure” followed by the tax year
and tax return to which the disclosure
statement applies. For example, if the
Form 8886 relates to your Form 1040
for the 2002 tax year, you must include
the following statement: “Section
6501(c)(10) Disclosure; 2002 Form
1040” on the form. The cover letter
must identify the tax return to which the
disclosure statement relates and
include the following statement signed
under penalties of perjury by the
taxpayer and, if applicable, the paid
preparer of Form 8886: “Under
penalties of perjury, I declare that I
have examined this reportable
transaction disclosure statement and, to
the best of my knowledge and belief,
this reportable transaction disclosure
statement is true, correct, and
complete. Declaration of preparer
(other than the taxpayer) is based on all
information of which the preparer has
any knowledge.” Separate Forms 8886
and separate cover letters must be
submitted for each tax year for which
you participated in the undisclosed
listed transaction. You must also submit
a copy of the form and cover letter
simultaneously to OTSA at the OTSA
address indicated on page 4. See Rev.
Proc. 2005-26 for additional guidance.
Instructions for Form 8886 (Rev. 3-2010)

Specific Instructions
How To Complete
Form 8886
In order to be considered complete,
Form 8886 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 and identify all
parties involved in the transaction. A
Form 8886 containing a statement that
information will be provided upon
request is not considered a complete
disclosure statement. If Form 8886 is
not completed in accordance with these
instructions and Regulations section
1.6011-4, you will not be considered to
have complied with the disclosure
requirements. If you receive one or
more reportable transaction numbers
for a reportable transaction, you must
include the reportable transaction
numbers on Form 8886.
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.

Initial year filer. If this is the first year
that you are filing a Form 8886 to
disclose this transaction, check this box
and file a duplicate copy of the form
with OTSA (see When and How To File
above).
Protective disclosure. You may
indicate that you are filing on a
protective basis by checking this box
(under the option provided in
Regulations section 1.6011-4(f)).
Generally, the IRS will not treat a Form
8886 filed on a protective basis any
differently than other Forms 8886. 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 and file Form 8886 and
provide all required information. See
How To Complete Form 8886 above.

Line 1a
Enter the name, if any, by which the
transaction is known or commonly
referred to. 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). If you are
reporting more than one transaction
and the transactions have different
names, enter all names in the space
provided. If additional space is needed,
write “See Additional List” and attach a
list.
If you are filing Form 8886 to
disclose a transaction with a significant
book-tax difference that was due prior
to January 6, 2006, write “book-tax
difference” in parentheses after the
name of the transaction on line 1a. If
any other disclosure category also
applies, check the appropriate box(es)
on line 2.

Line 1b

Item A
If you file more than one Form 8886
with your return, sequentially number
each of these forms and enter the
statement number for this Form 8886
(for example, statement number 1 of 3).

Item B
Enter the form number and year of the
tax return with which this Form 8886 is
filed (for example, Form 1040). If the
tax return has a calendar tax year,
enter the year shown on the return (for
example, 2007). If it is a fiscal year
return, enter the date the fiscal year
ends using the MM/DD/YYYY format
(for example, 06/30/2008).

Item C
Check all the box(es) that apply.

-5-

Enter the first year that you participated
in this transaction in year format
(YYYY). If you are reporting for more
than one transaction, enter all initial
years in the space provided. If
additional space is needed, write “See
Additional List” and attach a list.
Note. This may not be the same as
the year for which you are disclosing a
reportable transaction.

Line 1c
Enter the 9 digit and/or 11 digit number
provided to you. This number may be
referred to as a registration number or
reportable transaction number.
Reportable transactions can have more
than one number. If you have more
than one number for this transaction,
include all numbers in the space

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Instructions for Form 8886 (Rev. 3-2010)

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provided. If additional space is needed,
write “See Additional List” and attach a
list.
Reportable transaction numbers
(formerly known as tax shelter
registration numbers or registration
numbers) are issued to material
advisors who file a statement disclosing
a reportable transaction under section
6111. Material advisors are required to
provide this number to investors/
advisees.

Line 2
Check the box(es) for all categories that
apply to the transaction being reported.
The reportable transaction categories
are described under Participation in a
Reportable Transaction on page 1.
Note. The category for significant
book-tax difference transactions has
been eliminated by Notice 2006-6.
Transactions with a significant book-tax
difference that would have been
required to be disclosed after January
5, 2006, are no longer reportable
transactions.
However, if the transaction is also a
transaction described in any of the
remaining reportable transaction
categories, it must still be disclosed and
the box for all appropriate categories
(that is, a, b, c, d, e or f) must be
checked.
For more details, see Transactions
With a Significant Book-Tax Difference
on page 3 and Notice 2006-6.
Note. The category for brief-asset
holding period 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. For more details,
seeTransactions With a Brief Asset
Holding Period on page 3.
If the transaction is a listed
transaction or transaction of
CAUTION interest, you must check the
listed transaction box or transaction of
interest box in addition to any others
that may apply.

!

Line 3
Identify the notice, revenue ruling,
regulation, announcement, or other
published guidance that identified the
transaction as a listed transaction or a
transaction of interest. For listed
transactions, identify the guidance as
shown in Notice 2009-59, or later IRS
guidance.

Line 4
Do not report more than one
transaction on this form unless the
transactions are the same or
substantially similar. See Substantially
Similar on page 1.

Line 5
If you participated in the transaction
through other entities, indicate whether
each entity is a partnership, S
corporation, or trust. In addition, if the
entity is foreign, check the box for
“Foreign”. On line 5b, provide the full
name of the entity. On line 5c, enter the
entity’s EIN (if known). Use hyphens
when entering the EIN. On line 5d,
enter the date you received the
Schedule K-1 from the entity. Enter
“none” if Schedule K-1 was not
received. If you are reporting more than
one entity, use a separate column for
each entity. Attach additional sheets for
more than two entities.

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 income 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 identified by a box and
identify the tax benefits in the space
provided (for example, status as an
entity exempt from federal income
taxation). If you need more space,
follow the instructions under How To
Complete Form 8886 on page 5.

Line 7b

Please check the box representing the
type of tax benefit the transaction will
reflect on your tax return. There may be
more than one tax benefit to your
transaction. A tax benefit includes but is
not limited to the following: deductions,
exclusions from gross income,
nonrecognition of gain, tax credits,
adjustments (or absence of

Describe the reportable transaction you
entered into and the relevant facts and
tax benefits for all affected years that
caused the transaction to be reportable.
Describe each step of the transaction
including all information known to you.
Include in your description other parties
to the transaction and, if known,
assumptions of liabilities or other
obligations, satisfaction of liabilities or
obligations, sales of property or
interests in property, the formation and
dissolution of entities, and any
agreements between or among parties
to the transaction. Also describe any
tax result protection with respect to the
transaction. The term “tax result
protection” includes insurance company
and other third party products
commonly described as tax result
insurance. Include, if known, the
relevant dates and the amounts
involved in the steps described.
Amounts involved include cash, fair
market value of property or services
transferred or acquired, adjustments to
basis, valuation of notes, obligations,
shares, or other securities. Describe, if
known, the relationship between the
steps of the transaction and how each
step relates to why the transaction is
reportable. Your description should
include the relevance, if known, of any
party (including but not limited to
participants in the transaction) listed in
line 8.
Describe the economic and business
reasons for the transaction and its
structure. Describe market or business
conditions creating the tax benefit(s) or
consequence(s) and the transaction’s
financial reporting if known.
If you checked box 2b, explain how
your disclosure of information
concerning the transaction was limited
(for example, by contract or verbal
agreement) and the nature and extent
of the disclosure limitations. See
Regulations section 1.6011-4(b)(3) for
more details.
If you checked box 2c, describe the
terms of the contractual protection. See

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Instructions for Form 8886 (Rev. 3-2010)

Line 6
Enter the name, address, and social
security number (SSN) or EIN (if
known) for each individual or entity to
whom you paid a fee with regard to the
transaction if that individual or entity
promoted, solicited, or recommended
your participation in the transaction, or
provided tax advice related to the
transaction. Also, enter the approximate
fees paid to each of the individuals or
entities. These fees include payment in
whatever form, whether in cash or in
kind, for a tax strategy or for advice
(whether or not tax advice). Fees also
include consideration for services to:
• Analyze the transaction (whether or
not related to the tax consequences of
the transaction),
• Implement the transaction,
• Document the transaction, or
• Prepare tax returns to the extent the
return preparation fees are
unreasonable.
You are also treated as paying fees
to an advisor if you know or should
know that an amount you paid will be
paid indirectly to the advisor, such as
through a referral fee or fee-sharing
arrangement. A fee does not include
amounts paid to a person, including an
advisor, in that person’s capacity as a
party to the transaction.

Line 7a

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Instructions for Form 8886 (Rev. 3-2010)

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Regulations section 1.6011-4(b)(4) for
more details.
If you checked box 2d, explain how
you calculated the basis of the asset for
which there was a loss.
If you need more space, follow the
instructions under How To Complete
Form 8886 on page 5.

Line 8
List all individuals involved in the
transaction. List all tax-exempt, foreign,
or related entities involved in the
transaction. Check the applicable
box(es) for the type of entity. Attach
additional sheets where appropriate.
Provide all information, including the
name, EIN or SSN (include hyphens),
and address, if known.
Include a brief description of each
listed individual’s and each entity’s
involvement in the transaction
(purchaser, lender, seller, broker, etc.).
Provide the country of incorporation or
existence for each foreign entity, if

Instructions for Form 8886 (Rev. 3-2010)

known. Describe the relationship
between you and any related entity and
between or among any related entities
(as described in section 267(b) or
707(b)).

in the instructions for their individual
income tax return. The estimated
burden for all other taxpayers who file
this form is shown below.
Recordkeeping . . . . . . . . . .

Paperwork Reduction Act Notice.
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 burden for individual
taxpayers filing this form is approved
under OMB control number 1545-0074
and is included in the estimates shown

-7-

12 hr., 54
min.

Learning about the law or the
form . . . . . . . . . . . . . . . . . . 4 hr., 28 min.
Preparing, copying,
assembling, and sending the
form to the IRS . . . . . . . . . . . 4 hr., 52 min.

If you have comments concerning
the accuracy of these time estimates 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
When and How To File on page 3.