e-filing Form 8886, Reportable Transaction Disclosure Statement (12-11)
MeF created an XML schema dependency "ContinuationOfForm8886ExpectedTaxBenefitsExplanation" to allow for a continuation of Form 8886. Line 7b allows for 1,000 characters. If additional space is needed for more than the 1,000 characters on line 7b, “DescribeExpectedTaxBenefits,” taxpayers should enter about 950 characters on this line. At the end of the explanation, enter “continuation on Expected Tax Benefits Explanation.” Enter the remainder of the explanation in the XML dependency “ContinuationOfFormExpectedTaxBenefitsExplanation.” Do not send the remainder of the explanation as a PDF file.
MeF also allows a description to be provided for Line 8. For the line 8 description, the schema allows for a short explanation type which is up to 1,000 characters. The name is Description of Involvement.
Taxpayers must use the most current version of Form 8886 as posted on IRS.gov. Additionally, they are required to send copies of all of the initial year filings of Form 8886 to the Office of Tax Shelter Analysis (OTSA) at:
Internal Revenue Service
OTSA Mail Stop 4915
1973 North Rulon White Boulevard
Ogden, Utah 84404
The instructions to the Form 8886 indicate that “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 with the official IRS Form 8886. If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form.”
Additionally, the instructions tell taxpayers “Do not simply write ‘See Attached.’ 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.” To comply with these instructions, follow the guidance listed above to enter about 950 characters of the explanation on Line 7b and then write “continuation on Expected Tax Benefits Explanation.”
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