U.S. Individual Income Tax Return Forms

Instructions for Form 8275-R

Department of the Treasury
Internal Revenue Service

(Rev. November 2024)

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

represents a good-faith challenge to the validity of the
regulation and has a reasonable basis.

Future Developments

Instead of Form 8275-R, use Form 8275, Disclosure
Statement, for the disclosure of items or positions which
are not contrary to regulations but which are not otherwise
adequately disclosed.

General Instructions

Form 8275-R is filed by individuals, corporations,
pass-through entities, and tax return preparers.

Purpose of Form

For items attributable to a pass-through entity,
disclosure should be made on the tax return of the entity. If
the entity doesn’t make the disclosure, the partner (or
shareholder, etc.) can make adequate disclosure of these
items.

For the latest information about developments related to
Form 8275-R and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form8275R.

Form 8275-R is used by taxpayers and tax return
preparers to disclose positions taken on a tax return that
are contrary to Treasury regulations. The form is filed to
avoid the portions of the accuracy-related penalty due to
disregard of regulations or to a substantial
understatement of income tax for non-tax shelter items if
the return position has a reasonable basis. It can also be
used for disclosures relating to the economic substance
penalty and the preparer penalties for tax
understatements due to positions taken contrary to
regulations.

!

CAUTION

The portion of the accuracy-related penalty
attributable to the following types of misconduct
cannot be avoided by disclosure on Form 8275-R.

• Negligence.
• Disregard of rules (other than regulations).
• Any substantial understatement of income tax on a tax

shelter item.
• Any substantial or gross valuation misstatement
(including misstatements attributable to non-arm's length
prices) under chapter 1.
• Any substantial overstatement of pension liabilities.
• Any substantial estate or gift tax valuation
understatements.
• Any claim of tax benefits from a transaction lacking
economic substance (within the meaning of section
7701(o)) or failing to meet the requirements of any similar
rule of law.
• Any otherwise undisclosed foreign financial asset
understatement.
• Any inconsistent estate basis.
• Any overstatement of the deduction provided in section
170(p).
• Any disallowance of a deduction because of section
170(h)(7).
Because of the importance to the self-assessment
system of disclosing positions contrary to regulations, the
requirements for making such disclosures are stringent.
• The disclosure is adequate only if it is made separately
on a Form 8275-R.
• The penalty for reckless or intentional disregard of a
regulation can be avoided by disclosure only if the position
Oct 7, 2024

Who Should File

How To File

When a return position is contrary to regulations, you must
file Form 8275-R. File all Forms 8275-R with your original
tax return. Keep a copy for your records. You may also be
able to file Forms 8275-R with an amended return. See
Regulations sections 1.6662-4(f)(1) and 1.6664-2(c)(3) for
more information.
To adequately disclose items reported by a
pass-through entity, you must complete and file a separate
Form 8275-R for items reported by each entity.
To adequately disclose a position or positions related to
more than one foreign entity, you must complete and file a
separate Form 8275-R for each foreign entity.
Carryovers, carrybacks, and recurring items.
Carryover items must be disclosed in the tax year in which
they originated. You don’t have to file another Form
8275-R for those items for the tax years in which the
carryover is taken into account.
Carryback items must be disclosed for the tax year in
which they originated. You don’t have to file another Form
8275-R for those items for the tax years in which the
carryback is taken into account.
However, if you disclose items that are of a recurring
nature (such as depreciation expense), you must file Form
8275-R for each tax year in which the item occurs.
If you are disclosing a position that is contrary to a
regulation, and the position relates to a reportable
transaction, as defined in Regulations section
1.6011-4(b), you must also make the disclosure, as
indicated in Regulations section 1.6011-4(d). See Form
8886, Reportable Transaction Disclosure Statement, and
its instructions; Notice 2006-6, 2006-5 I.R.B. 385,
available at IRS.gov/irb/2006-05_IRB/ar10.html; and
Notice 2010-62, 2010-40 I.R.B. 411, available at
IRS.gov/irb/2010-40_IRB/ar09.html.

Cat. No. 14317I

Accuracy-Related Penalty

Generally, the accuracy-related penalty is 20% of any
portion of a tax underpayment attributable to:
1. Negligence or disregard of rules or regulations;
2. Any substantial understatement of income tax;
3. Any substantial valuation misstatement under
chapter 1 of the Internal Revenue Code;
4. Any substantial overstatement of pension liabilities;
5. Any substantial estate or gift tax valuation
understatement;
6. Any claim of tax benefits from a transaction lacking
economic substance, as defined by section 7701(o), or
failing to meet the requirements of any similar rule of law.
7. Any undisclosed foreign financial asset
understatement;
8. Any inconsistent estate basis;
9. Any overstatement of the deduction provided in
section 170(p); or
10. Any disallowance of a deduction because of section
170(h)(7).

If you failed to keep proper books and records or failed
to properly substantiate items, you cannot avoid the
penalty by disclosure.
Adequate disclosure. Generally, you can avoid the
disregard of regulations and substantial understatement
portions of the accuracy-related penalty if the position is
adequately disclosed and the position has at least a
reasonable basis. To avoid the disregard of regulations
portion of the accuracy-related penalty, the position taken
must also represent a good-faith challenge to the validity
of the regulation. See Regulations section 1.6662-3(c)(1).
Reasonable basis. Reasonable basis is a relatively
high standard of tax reporting that is significantly higher
than not frivolous or not patently improper. The
reasonable basis standard isn’t satisfied by a return
position that is merely arguable.
If the return position is reasonably based on one of the
authorities set forth in Regulations section 1.6662-4(d)(3)
(iii) (taking into account the relevance and persuasiveness
of the authorities, and subsequent developments), the
return position will generally satisfy the reasonable basis
standard even though it may not satisfy the substantial
authority standard, as defined in Regulations section
1.6662-4(d)(2). For details, see Regulations sections
1.6662-4(d) and 1.6662-3(b)(3).
If you failed to keep proper books and records or failed
to properly substantiate the items, you cannot avoid the
penalty by disclosure.

The penalty is 40% of any portion of a tax
underpayment attributable to one or more gross valuation
misstatements in (3), (4), (5), or (10) above if the
applicable dollar limitation under section 6662(h)(2) is
met. The penalty also increases to 40% for failing to
adequately disclose a transaction that lacks economic
substance in (6) above. See Economic substance, below.
The penalty is 40% of any portion of an underpayment
that is attributable to any undisclosed foreign financial
asset understatement in (7) above. The penalty is 50% of
any portion of an underpayment attributable to one or
more overstatements of the deduction provided in section
170(p) in (9) above.

Substantial Understatement

Economic substance. To satisfy the disclosure
requirements under section 6662(i), you may adequately
disclose with a timely filed original return (determined with
regard to extensions) or a qualified amended return (as
defined under Regulations section 1.6664-2(c)(3)) the
relevant facts affecting the tax treatment of the
transaction.

There is a substantial understatement of income tax if
the amount of the understatement for any year exceeds
the greater of:
1. 10% of the tax required to be shown on the return
for the tax year, or
2. $5,000.

Note. If you filed a Schedule UTP (Form 1120), Uncertain
Tax Position Statement, you may not need to file Form
8275-R to satisfy the disclosure requirements of section
6662(i). For more information, see the Instructions for
Schedule UTP (Form 1120), Uncertain Tax Position
Statement.
Reasonable cause exception. Generally, no
accuracy-related penalty will be imposed on any portion of
an underpayment if you show that there was reasonable
cause for that portion and that you acted in good faith with
respect to that portion.
The reasonable cause and good faith exception
doesn’t apply to any portion of an underpayment
CAUTION attributable to a transaction that lacks economic
substance under section 7701(o).

!

2

An understatement is the excess of:
1. The amount of tax required to be shown on the
return for the tax year, over
2. The amount of tax imposed which is shown on the
return for the tax year, reduced by any rebates.

An understatement of a corporation (other than an S
corporation or a personal holding company, as defined in
section 542) is substantial if it exceeds in any year the
lesser of:
1. 10% of the tax required to be shown on the return
for the tax year (or, if greater, $10,000), or
2. $10 million.
Reduction of understatement. The amount of the
understatement will be reduced by the part that is
attributable to the following items.
• An item (other than a tax shelter item) for which there
was substantial authority for the treatment claimed at the
time the return was filed or on the last day of the tax year
to which the return relates.
• An item (other than a tax shelter item) that is adequately
disclosed on this form if there is a reasonable basis for the
tax treatment of the item. (In no event will a corporation be
treated as having a reasonable basis for its tax treatment

of an item attributable to a multi-party financing
transaction entered into after August 5, 1997, if the
treatment doesn’t clearly reflect the income of the
corporation.
For corporate tax shelter transactions (and for tax
shelter items of other taxpayers for tax years ending after
October 22, 2004), the only exception to the substantial
understatement portion of the accuracy-related penalty is
the reasonable cause exception. For more details, see
Reasonable cause exception, earlier; section 6662(d);
and Regulations section 1.6664-4.
Tax shelter items. A tax shelter, for purposes of the
substantial understatement portion of the
accuracy-related penalty, is a partnership or other entity,
plan, or arrangement, with a significant purpose to avoid
or evade federal income tax. For transactions on or before
August 5, 1997, a tax shelter is a partnership or other
entity, plan, or arrangement, whose principal purpose is to
avoid or evade federal income tax.
A tax shelter item is any item of income, gain, loss,
deduction, or credit that is directly or indirectly attributable
to the principal or significant purpose of the tax shelter to
avoid or evade federal income tax.

Tax Return Preparer Penalties

A preparer who files a return or claim for refund is subject
to a penalty in an amount equal to the greater of $1,000 or
50% of the income derived (or to be derived) by the tax
return preparer, with respect to the return or claim, for
taking a position which the preparer knew or reasonably
should have known would understate any part of the
liability if:
• There is or was no substantial authority for the position;
• The position is a tax shelter (as defined in section
6662(d)(2)(C)(ii)) or a reportable transaction to which
section 6662A applies and it wasn’t reasonable to believe
that the position would more likely than not be sustained
on its merits; or
• The position disclosed, as provided in section 6662(d)
(2)(B)(ii), isn’t a tax shelter or a reportable transaction to
which section 6662A applies, and there was no
reasonable basis for the position.
The penalty won’t apply if it can be shown that there
was reasonable cause for the understatement and that the
preparer acted in good faith.
In cases where any part of the understatement of the
liability is due to a willful attempt by the return preparer to
understate the liability, or if the understatement is due to
reckless or intentional disregard of rules or regulations by
the preparer, the preparer is subject to a penalty equal to
the greater of $5,000 or 75% of the income derived (or to
be derived) by the tax return preparer with respect to the
return or claim. This penalty shall be reduced by the
amount of the penalty paid by such person for taking an
unreasonable position, or a position with no reasonable
basis, as described immediately above.
A preparer isn’t considered to have recklessly or
intentionally disregarded a rule if a position is adequately
disclosed and has a reasonable basis.
Note. For more information about the accuracy-related
penalty and preparer penalties, and the means of avoiding

these penalties, see the regulations under sections 6662,
6664, and 6694.

Specific Instructions
Be sure to provide all of the information requested in Parts
I, II, and III (if applicable). Your disclosure will be
considered adequate if you file Form 8275-R and provide
the required information in detail.
Use Part IV on page 2 if you need more space for Parts
I and/or II. Include the corresponding part and line number
from page 1. You can use a continuation sheet(s) if you
need additional space. Be sure to put your name and
identifying number on each sheet.
Reference ID number. If you are filing Form 8275-R to
disclose a position related to a foreign entity for which an
information return (such as Form 5471, Information Return
of U.S. Persons With Respect to Certain Foreign
Corporations) is filed, enter on Form 8275-R the same
reference ID number for the foreign entity that is entered
on the information return.
If you are filing Form 8275-R to report a position or
positions related to multiple foreign entities, file a separate
Form 8275-R for each foreign entity.

Part I
Column (a). Enter the full citation for each regulation for
which you have taken a contrary position. The citation
should specify the section number, including all
designations of smaller units (lettered or numbered
subsections, paragraphs, subparagraphs, and clauses) to
which the contrary position relates. For example, enter
“1.482-7(d)(1)(iii)” instead of “482 regs” or “1.482-7”.
Column (b). Identify the item by name.
If any item you disclose is from a pass-through entity,
you must identify the item as such. If you disclose items
from more than one pass-through entity, you must
complete a separate Form 8275-R for each entity. Also,
see How To File, earlier.
Column (c). Enter a complete description of the item(s)
you are disclosing.
Example. If you are reporting entertainment expenses
in column (b), then you must list the items for
entertainment expenses in column (c), such as “theater
tickets, catering expenses, and banquet hall rentals.”
If you claim the same tax treatment for a group of
similar items in the same tax year, enter a description
identifying the group of items you are disclosing rather
than a separate description of each item within the group.
Columns (d) through (f). Enter the location of the
item(s) by identifying the form number or schedule in
column (d), the line number in column (e), and the amount
of the item(s) in column (f).

Part II

Your disclosure must include the following.
1. A description of the relevant facts affecting the tax
treatment of the item. To satisfy this requirement, you must
include information that can reasonably be expected to
apprise the IRS of the identity of the item, its amount, and
3

the nature of the controversy or potential controversy.
Information concerning the nature of the controversy can
include a description of the legal issues presented by the
facts.
2. A statement explaining why you believe this
regulation to be invalid.
Unless provided otherwise in the General
Instructions, earlier, your disclosure won’t be
CAUTION considered adequate unless (1) and (2) above are
provided using Form 8275-R. For example, your
disclosure won’t be considered adequate if you attach a
copy of an acquisition agreement to your tax return to
disclose the issues involved in determining the basis of
certain acquired assets. If Form 8275-R isn’t completed
and attached to the return, the disclosure won’t be
considered valid even if the information in (1) and (2)
above is provided using another method, such as a
different form or an attached letter.

!

Part III
Line 4. Contact your pass-through entity if you don’t
know where its return was filed. However, for partners and
S corporation shareholders, information for line 4 can be
found on the Schedule K-1 that you received from the
partnership or S corporation.
If the pass-through entity filed its return electronically
using e-file, enter “e-file” on line 4.
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 if you wish to use this form to make adequate
disclosure to avoid the portion of the accuracy-related
penalty due to a substantial understatement of income tax

4

or disregard of regulations, or to avoid certain preparer
penalties. We need it to ensure that you are complying
with these laws and to allow us to figure and collect the
right amount of tax.
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 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 and sending the form to
the IRS . . . . . . . . . . . . . . . . . . . . .

3 hr., 35 min.
53 min.
59 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. See the
instructions for the tax return with which this form is filed.