Timely file Form 8886 without reportable transaction number

 

A delay in the processing of Forms 8918, Material Advisor Disclosure Statement, occurred in 2019 and the reportable transaction numbers for newly disclosed transactions (formerly known as tax shelter registration numbers or registration numbers) will be issued later in the year to material advisors. Material advisors are required to provide this number to investors/advisees. The reportable transaction or tax shelter registration number is then reported on Form 8886, Item C, line 1c. The Internal Revenue Service encourages taxpayers to:

  • Timely file Form 8886, Reportable Transaction Disclosure Statement, to disclose participation in reportable transactions as described in regulations 1.6011-4. 
  • Follow the instructions for Form 8886, Reportable Transaction Disclosure Statements.
  • If a taxpayer is required to file Form 8886, and does not have a reportable transaction number for a new transaction, the taxpayer must inquire of its material advisor if the material advisor has requested and obtained a reportable transaction number.
  • If a reportable transaction number was applied for by the material advisor, the material advisor informs the taxpayer that it has not received the reportable transaction number from the IRS, and a corresponding number is not received by taxpayer by due date for timely filing, place "Applied for" in Item C, line 1c of the Form 8886. 
  • If the material advisor fails to provide an answer to the taxpayer's inquiry regarding the reportable transaction number, the taxpayer should place "unknown" in Item C, line 1c of the Form 8886.
  • If a reportable transaction number is received after a Form 8886 is filed, do not file an amended return or another Form 8886 as this will cause duplicate filings. 
  • This failure of the IRS to process and issue the reportable transaction number to material advisors timely does not relieve any taxpayer required to file a Form 8886 from that filing obligation, and the failure to timely file a complete Form 8886 could subject a taxpayer to penalties under section 6707A.
  • The IRS will not impose a penalty under section 6707A if the only information required to be included but which is not included on a timely filed Form 8886 is a reportable transaction number for which the material advisor has applied for but not yet received due to the IRS's failure to process the Form 8918 timely.