Form 8275 - Disclosure Statement

Form 8275, Disclosure Statement, is used by taxpayers and tax return preparers to disclose tax positions or items that are not otherwise adequately disclosed on a tax return, in order to avoid certain penalties. This form is specifically intended for positions that are not contrary to Treasury regulations. If a position contradicts a regulation, Form 8275-R, Regulation Disclosure Statement, must be used instead.

Purpose of Form 8275

Form 8275 helps taxpayers avoid portions of the accuracy-related penalty under IRC §6662, particularly those related to disregard of rules or substantial understatement of income tax for non-tax shelter items, provided the position has a reasonable basis. It may also be used for disclosures related to the economic substance penalty and preparer penalties for unreasonable positions or disregard of rules.

Who Should File

• Individuals, corporations, pass-through entities, and tax return preparers may file Form 8275.
• For items attributable to a pass-through entity, disclosure should be made on the entity’s return. If the entity does not disclose, the partner, shareholder, or other owner may make the disclosure.
• Form 8275 is not required for positions contrary to Treasury regulations—use Form 8275-R in those cases.

When Is Form 8275 Not Required?

• Annual revenue procedures published in the Internal Revenue Bulletin may identify situations where disclosure on the tax return itself (e.g., completing Schedule A for charitable contributions) is considered adequate. In such cases, Form 8275 is not required.

Specific Instructions

Part I: Item Identification

• Identify each disclosed item by name.
• If the item is from a pass-through entity, clearly identify it as such.
• Complete a separate Form 8275 for each pass-through entity if disclosing items from multiple entities.

Part II: Description of Relevant Facts

• Provide a detailed description of the facts affecting the tax treatment of the item.
• Include information that reasonably apprises the IRS of the item’s identity, amount, and nature of controversy or potential controversy.
• Legal issues presented by the facts should be described.
• The disclosure must be made using Form 8275; attaching documents like acquisition agreements without completing the form is insufficient.

Reference ID Number

• If disclosing a position related to a foreign entity (e.g., Form 5471), enter the same reference ID number used on the information return.
• File a separate Form 8275 for each foreign entity if multiple are involved.

Additional Notes

• Use Part IV (on page 2) or continuation sheets if additional space is needed. Label each sheet with your name and identifying number.
• If you filed Schedule UTP (Form 1120), Uncertain Tax Position Statement, you may not need to file Form 8275 for economic substance disclosures under §6662(i).

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Disclaimer: Always verify details with current Federal or State Department of Revenue Forms and Instructions. Tax laws and regulations are subject to change. For complex situations, consult a CPA or tax attorney.