8886 Instructions for Form 8886

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Instructions for Form 8886

Department of the Treasury
Internal Revenue Service

(Rev. October 2022)

Reportable Transaction Disclosure Statement
Section references are to the Internal Revenue
Code unless otherwise noted.

Definitions

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 later).

DRAFT AS OF
October 4, 2022

Future Developments

For the latest information about
developments related to Form 8886 and
its instructions, such as legislation
enacted after they were published, go to
IRS.gov/Form8886.

General Instructions

Which form and instructions to use.
Use the latest Form 8886 with the latest
Instructions for Form 8886 available on
IRS.gov.

Purpose of Form

Use Form 8886 to disclose information
for each reportable transaction in which
you participated. See Participation in a
Reportable Transaction, later, 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 definitions 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.

Sep 27, 2022

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
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
IRS.gov/pub/irs-irbs/irb09-31.pdf. For
updates to this list, go to the IRS web
page at IRS.gov/Businesses/
Corporations/Abusive-Tax-Sheltersand-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 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 IRS.gov/pub/irsirbs/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 IRS.gov/pub/irsirbs/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 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 IRS.gov/pub/irs-irbs/
irb06-09.pdf.

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.

• 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).

DRAFT AS OF
October 4, 2022

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

Transactions With Contractual
Protection

A transaction with contractual protection
is a transaction for which you have, or a
related party (as described in section
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 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

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.
-2-

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

Instructions for Form 8886 (Rev. October 2022)

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.
2013-11.
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
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.

transaction in the published guidance
describing the transaction of interest.

suspended during the period that the
ruling request is pending.

Exceptions to Reportable
Transaction Categories,
Published Guidance

Recordkeeping

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. See Rev. Proc. 2004-67;
Rev. Proc. 2004-68; Rev. Proc.
2007-20; and Rev. Proc. 2013-11 for
more information. The IRS may also
determine by individual letter ruling that
an individual letter ruling request
satisfies the reporting requirements.
See Request for Ruling, later, for more
information on submitting a letter ruling
request.

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.

DRAFT AS OF
October 4, 2022

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 IRS.gov/pub/irs-irbs/irb09-31.pdf. For
updates to this list, go to the IRS web
page at IRS.gov/Businesses/
Corporations/Transactions-of-Interest.
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

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). See Rev. Proc.
2022-1, as modified by Rev. Proc.
2022-10, for procedures to obtain
letter rulings. The procedures are
generally updated every year and
you should consult the new Revenue
Procedure issued every year. The
potential obligation of the taxpayer to
disclose the transaction will not be

Instructions for Form 8886 (Rev. October 2022)

-3-

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 year,
attach Form 8886 to an application for
tentative refund (Form 1045 or 1139) or
amended return for the carryback years.
Initial year Form 8886 filers must file
exact copy with OTSA. You must file
(via mail or fax) an exact copy of an
initial Form 8886 with the Office of Tax
Shelter Analysis (OTSA).
Via mail. You may mail the exact copy
to:
Internal Revenue Service
OTSA Mail Stop 4915
1973 Rulon White Blvd.
Ogden, UT 84201
Via fax. You may fax the exact copy to
844-253-2553.
This fax number is not for general
use; taxpayers should not use this
number for anything besides sending
the exact copy of Form 8886 (and
accompanying materials). Other
submissions received via this fax
number will not be processed
Send only one exact copy of Form
8886 per fax
A maximum of 100 pages can be
faxed to the fax number listed above.
You must also file the original Form
8886 with your tax return.
The IRS will not provide a
confirmation or receipt. Please check
your fax transmission log to verify that
all the Form 8886 pages were sent.
Keep a copy of your fax transmission
log as your confirmation or receipt.
The fax cover sheet should include
the following.
• Subject: Form 8886
• Sender's name, title, phone number,
address
• Taxpayer's name
• Date

• Number of pages faxed (including
cover sheet)
Do not include sensitive information on
the cover sheet, such as employer
identification number or social security
number.
See IRS.gov/Newsroom/TaxpayersCan-Fax-the-Separate-Copy-ofForm-8886-Reportable-TransactionDisclosure-Statement-with-the-Officeof-Tax-Shelter-Analysis for more
information.

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 Initial year Form
8886 filers must file exact copy with
OTSA, earlier.
• 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.

penalty for failure to include information
with respect to a reportable transaction
is 75% of the reduction in the tax
reported on the income tax return as a
result of participation in the transaction
or that would result if the transaction
were respected for federal tax
purposes, but not less than $5,000 in
the case of an individual and $10,000 in
any other case. The annual maximum
penalty for failure to disclose a
reportable transaction, other than a
listed transaction, cannot exceed
$10,000 in the case of an individual, and
$50,000 in any other case. The
maximum annual 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 information, see
section 6707A and Regulations section
301.6707A-1.

DRAFT AS OF
October 4, 2022

Electronic return filers. If you file your
income tax return electronically, the
exact copy you send (mail or fax) 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

Subsequent Loss Transactions
If a transaction becomes a loss
transaction because the losses equal or
exceed the threshold amounts
described earlier in Loss Transactions,
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. Generally, the
-4-

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
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 return, 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.

Instructions for Form 8886 (Rev. October 2022)

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 IRS.gov/pub/irs-irbs/irb05-33.pdf,
amplified by Rev. Proc. 2007-25,
2007-12 I.R.B. 761, available at
IRS.gov/pub/irs-irbs/irb07-12.pdf.

!

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 under When and
How To File, earlier. See Rev. Proc.
2005-26 for additional guidance.

“See Attached” on the form and provide
all the information on an attached
statement.

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).

DRAFT AS OF
October 4, 2022

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
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 1 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
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

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

Instructions for Form 8886 (Rev. October 2022)

-5-

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.
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,
earlier).
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 from 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, earlier.

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.

Line 1b

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.

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.

advisor, in that person's capacity as a
party to the transaction.

Line 7a

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
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, earlier.

DRAFT AS OF
October 4, 2022

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 and may
begin with the letters “MA.” Reportable
transactions can have more than one
number. If you have more than one
number for this transaction, include all
numbers in the space 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, earlier.
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.
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 4

Do not report more than one transaction
on this form unless the transactions are
the same or substantially similar. See
Substantially Similar, earlier.

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.

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
-6-

Line 7b

Tax benefit(s) from the transaction is the
total anticipated dollar amount of all
items checked in line 7a, over the entire
anticipated life of the transaction.

Line 7c

Enter the number of tax years you
anticipate it will take for you to claim the
above total tax benefits from this
transaction.

Line 7d

Total investment or basis in the
transaction is the total of the amounts
you paid related to this transaction that
includes cash, fair market value of
property or services transferred or
acquired, adjustments to basis,
valuation of notes, obligations, shares,
or other securities.

Line 7e

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

Instructions for Form 8886 (Rev. October 2022)

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.

If you checked box 2c, describe the
terms of the contractual protection. See
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.

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.

DRAFT AS OF
October 4, 2022

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 need more space, follow the
instructions under How To Complete
Form 8886, earlier.

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
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)).

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

Instructions for Form 8886 (Rev. October 2022)

-7-

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 in the instructions
for their individual income tax return.
The estimated burden for all other
taxpayers who file this form is shown
below.
Recordkeeping . . . . . . .
Learning about the law or
the form . . . . . . . . . . . .
Preparing, copying,
assembling, and sending
the form to the IRS . . . .

10 hr., 16 min.
4 hr., 50 min.
6 hr., 25 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 send us comments
from IRS.gov/FormComments. Or you
can write to the Internal Revenue
Service, Tax Forms and Publications,
1111 Constitution Ave. NW, IR-6526,
Washington, DC 20224.