The form must be completed if the taxpayer’s position on a return lacks substantial authority or reasonable basis, or if it is a reportable transaction. It is also required if the position is contrary to a regulation, revenue ruling, or other authority, or if it is a non-tax shelter item with a potential controversy.
It is also filed with the taxpayer’s return, and it is subject to public inspection. Taxpayers need to consult the Internal Revenue Manual and relevant regulations to determine how much detail should be included on the form. Furthermore, qualified amended returns may also be used to disclose positions that were not disclosed before.
This is also used by tax return preparers to disclose positions taken on a tax return that may be subject to accuracy-related penalties, and to provide information necessary to protect taxpayers from potential controversies in the future.
When it comes to disclosing positions that may be subject to accuracy-related penalties, tax return preparers have two options: Form 8275 and Form 8275-R.
Form 8275 is used to disclose positions taken on a tax return that lack substantial authority or a reasonable basis. It is also used to disclose reportable transactions, or positions that are contrary to IRS regulations, revenue rulings, or other authorities. This form can be used for tax shelters and non-tax shelter items alike.
On the other hand, Form 8275-R is specifically designed for disclosing positions that are contrary to Treasury regulations. As a Regulation Disclosure Statement form, it is used to disclose relevant facts affecting the tax treatment of items on a tax return that are contrary to a regulation. This form is only used for non-tax shelter items.
One key difference between the two forms is that Form 8275 provides no penalty protection for the taxpayer, while Form 8275-R does. This means that if a tax return preparer uses Form 8275-R to adequately disclose a position that may be subject to accuracy-related penalties, the taxpayer may be protected from those penalties. Another difference is that Form 8275-R requires the preparer to include legal arguments, case law, and any other relevant information in the statement attached to the form.
When it comes to how much detail should be included on the forms, both require a statement attached that includes additional information necessary to fully disclose the position. Taxpayers should consult the Internal Revenue Manual and relevant regulations to determine how much detail is necessary.
The statement must include relevant facts affecting the tax treatment of the item, the taxpayer’s position on the item, and any legal arguments supporting the position taken.
" Undoubtedly one of the best eSignature application available in the market right now. Would love to recommend Fill. "
Ready to get started
with this template?