Updated October 17, 2026. Quick answer: Form 8886 is the Reportable Transaction Disclosure Statement. The instructions say to use it to disclose information for each reportable transaction in which the filer participated, and they define five categories: listed, confidential, contractual protection, loss and transaction of interest. The decision is whether a transaction falls in one of those categories, since a form that is required carries its own filing and penalty rules.
What Form 8886 is for and who must file
The instructions state the purpose: “Use Form 8886 to disclose information for each reportable transaction in which you participated.” They also say “Generally, you must file a separate Form 8886 for each reportable transaction.” The form itself carries the instruction “Attach to your tax return.” One sentence in the instructions guards against a misreading: “The fact that a transaction must be reported on this form does not mean the tax benefits from the transaction will be disallowed.”
Who files is stated broadly: “Any taxpayer, including an individual, trust, estate, partnership, S corporation, or other corporation, that participates in a reportable transaction and is required to file a federal tax return or information return must file Form 8886.” The partnership and S corporation returns are covered on the Form 1065 page and the Form 1120-S page.
The five categories of reportable transaction
The instructions say “A reportable transaction is a transaction described in one or more of the following categories.” Line 2 of the form mirrors them: “Identify the type of reportable transaction. Check all boxes that apply.” The boxes are listed, confidential, contractual protection, loss and transaction of interest.
| Category | As printed in the instructions |
|---|---|
| Listed | “A listed transaction is a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction.” |
| Confidential | “A confidential transaction is a transaction that is offered to you or a related party (as described in section 267(b) or 707(b)) under conditions of confidentiality and for which you or a related party paid an advisor a minimum fee” |
| Contractual protection | “A transaction with contractual protection is a transaction for which you have, or a related party (as described in section 267(b) or 707(b)) has, the right to a full refund or partial refund of fees if all or part of the intended tax consequences from the transaction are not sustained.” |
| Loss | “A loss transaction is a transaction that results in your claiming a loss under section 165” |
| Transaction of interest | “A transaction of interest is a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has identified by notice, regulation, or other form of published guidance as a transaction of interest.” |
Listed transactions are identified by guidance, which the instructions describe as “identified by notice, regulation, or other form of published guidance as a listed transaction.” A filer participates in a transaction of interest only in the way the guidance describes: “You have participated in a transaction of interest if you are one of the types or classes of individuals or entities identified as participants in the transaction in the published guidance describing the transaction of interest.”
Dollar thresholds as printed
Two of the categories turn on dollar amounts. The confidential category depends on a minimum fee, and the loss category depends on the size of a section 165 loss. The figures are reproduced as printed.
| Item | As printed in the instructions |
|---|---|
| Confidential, minimum fee | “For a corporation (excluding S corporations), or a partnership or trust in which all of the owners or beneficiaries are corporations (excluding S corporations), the minimum fee is $250,000. For all others, the minimum fee is $50,000.” |
| Loss, individuals | “For individuals, at least $2 million in any single tax year or $4 million in any combination of tax years.” |
| Loss, corporations | “For corporations (excluding S corporations), at least $10 million in any single tax year or $20 million in any combination of tax years.” |
| Loss, all other partnerships and S corporations | “For all other partnerships and S corporations, at least $2 million in any single tax year or $4 million in any combination of tax years” |
| Loss, trusts | “For trusts, at least $2 million in any single tax year or $4 million in any combination of tax years” |
| Loss, section 988 foreign currency (individuals and trusts) | “At least $50,000 for a single tax year if the loss arose from a section 988 transaction defined in section 988(c)(1)” |
The instructions add how the loss is measured: “a section 165 loss is adjusted for any salvage value and for any insurance or other compensation received. However, a section 165 loss does not take into account offsetting gains, other income, or limitations.”
When and where Form 8886 is filed
The form goes with the return. “Attach Form 8886 to your income tax return or information return (including a partnership, S corporation, or trust return), including amended returns, for each tax year in which you participated in a reportable transaction.”
A first-year filer has a second step. “You must file (via mail or fax) an exact copy of an initial Form 8886 with the Office of Tax Shelter Analysis (OTSA).” “You must also file the original Form 8886 with your tax return.” The form’s item C has a box for this: “Initial year filer”. There is also a protective option: “You may indicate that you are filing on a protective basis by checking this box”.
Late designation and pass-through timing have their own rules. “If you are a partner in a partnership, shareholder in an S corporation, or beneficiary of a trust who receives a timely Schedule K-1 less than 10 calendar days before your return due date (including extensions) and, based on receipt of the timely Schedule K-1, you determine that you participated in a reportable transaction, Form 8886 will not be considered late if you file Form 8886 with OTSA within 60 days after the due date of your return including extensions.” Schedule K-1 boxes are explained on the Schedule K-1 Form 1065 boxes page.
Completing the form
The instructions treat an incomplete form as no disclosure. “A Form 8886 containing a statement that information will be provided upon request is not considered a complete disclosure statement.” “Do not write “See Attached” on the form and provide all the information on an attached statement.”
Line 1c asks for the registration number. “Enter the 9-digit and/or 11-digit number provided to you.” Line 6 on the form asks for certain people paid: “Enter below the name and address of each individual or entity to whom you paid a fee with regard to the transaction if that individual or entity promoted, solicited, or recommended your participation in the transaction, or provided tax advice related to the transaction.”
Penalties as printed
The instructions open the penalty section with “There is a monetary penalty under section 6707A for the failure to include on any return or statement any information required to be disclosed under section 6011 with respect to a reportable transaction.”
| Penalty | As printed in the instructions |
|---|---|
| Section 6707A, general | “Generally, the penalty for failure to include information with respect to a reportable transaction is 75% of the reduction in the tax reported on the income tax return as a result of participation in the transaction or that would result if the transaction were respected for federal tax purposes, but not less than $5,000 in the case of an individual and $10,000 in any other case.” |
| Annual maximum, other than listed | “The annual maximum penalty for failure to disclose a reportable transaction, other than a listed transaction, cannot exceed $10,000 in the case of an individual, and $50,000 in any other case.” |
| Annual maximum, listed | “The maximum annual penalty for failure to include information with respect to a listed transaction is $100,000 in the case of an individual and $200,000 in any other case.” |
| Accuracy-related, section 6662A | “If you have a reportable transaction understatement, an accuracy-related penalty may be imposed under section 6662A.” |
The instructions also say “This penalty is in addition to any other penalty that may be imposed.” “Inclusion of any such statements subjects you to penalty under sections 6707A and 6662A.” The preceding sentence of that passage concerns placeholder statements that promise details on request instead of giving them.
Which revision applies
Two revisions were read for this page: Form 8886 (Rev. December 2019) and the Instructions for Form 8886 (Rev. October 2022). These are the revisions irs.gov served when they were read on 2026-10-17. The form and the instructions carry different revision dates, so check the revision printed on each document being used, because a later revision can change the categories, the thresholds, the filing address and the penalty amounts.
Common mistakes
- Assuming a disclosure is only for transactions the filer thinks of as shelters. The instructions define five categories, and the confidential and loss categories turn on printed fee and loss amounts.
- Filing the form with a note that details will follow. The instructions say a form containing a statement that information will be provided upon request is not a complete disclosure statement.
- Attaching the form to the return and stopping there in the first year. The instructions say an initial Form 8886 also requires an exact copy sent to the Office of Tax Shelter Analysis.
Related: Form 8275 disclosure statement, Form 1065 partnership return, Form 1120 corporation return, Schedule K-1 Form 1065 boxes, and Schedule K-1 Form 1120-S boxes.
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Answer againSources
- Form 8886 (Rev. December 2019), Reportable Transaction Disclosure Statement: https://www.irs.gov/pub/irs-pdf/f8886.pdf
- Instructions for Form 8886 (Rev. October 2022): https://www.irs.gov/pub/irs-pdf/i8886.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.