8876 Excise Tax on Structured
Form
Settlement Factoring Transactions
(Rev. December 2008) OMB No. 1545-1826
See instructions below.
Department of the Treasury
Internal Revenue Service
Date of receipt of structured settlement payment rights
Name Identifying number
Please
Number, street, and room or suite no. (If a P.O. box, see instructions.)
Type
or
Print City or town, state, and ZIP code
1
1 Total undiscounted amount of structured settlement payments being acquired
2
2 Total amount paid for the above structured settlement payment rights
3
3 Factoring discount. Subtract line 2 from line 1
4
4 Tax. Multiply line 3 by 40% (.40)
5
5 Less: Tax paid with Form 7004
6
6 Tax due. Subtract line 5 from line 4. If zero or less, enter -0-
7 Overpayment. If line 5 is greater than line 4, subtract line 4 from line 5 7
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my
knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has
any knowledge.
Sign
Here
Signature Date Title (if any)
Date Preparer’s SSN or PTIN
Preparer’s Check if
Paid signature self-employed
Preparer’s
Firm’s name (or EIN
Use Only yours if self-employed),
Phone no. ( )
address, and ZIP code
2. Under which the periodic payments
General Instructions 2. A subsequent transfer of structured
are (a) of the character described in settlement payment rights acquired in a
Section references are to the Internal section 130(c)(2)(A) and (B) and (b) payable structured settlement factoring transaction.
Revenue Code unless otherwise noted. by a person who is a party to the suit or Structured settlement payment rights.
agreement or to the workers’ Structured settlement payment rights are
Purpose of Form compensation claim or by a person who rights to receive payments under a
has assumed the liability for such periodic structured settlement.
Use Form 8876 to report and pay the 40% payments under a qualified assignment in
excise tax imposed under section 5891 on Factoring discount. The factoring
accordance with section 130.
the factoring discount of a structured discount is the difference between the total
Structured settlement factoring
settlement factoring transaction. File a undiscounted amount of structured
transaction. A structured settlement
separate Form 8876 for each date on settlement payments being acquired
factoring transaction is a transfer of
which you received structured settlement (line 1) and the total amount paid by the
structured settlement payment rights
payment rights in one or more structured acquirer to the person(s) from whom the
(including portions of structured settlement
settlement factoring transactions. structured settlement payment rights are
payments) made for consideration by acquired (line 2).
Definitions means of sale, assignment, pledge, or
other form of encumbrance or alienation Qualified order. A qualified order is a final
Structured settlement. A structured for consideration. order, judgment, or decree that:
settlement is an arrangement:
● Finds that the transfer of structured
The following are not structured
1. Established (a) by suit or agreement settlement factoring transactions. settlement payment rights does not
for the periodic payment of damages contravene any federal or state statute or
1. The creation or perfection of a
excludable from the gross income of the the order of any court or responsible
security interest in structured settlement
recipient under section 104(a)(2) or (b) by administrative authority, and is in the best
payment rights under a blanket security
agreement for the periodic payment of interest of the payee, taking into account
agreement entered into with an insured
compensation under any workers’ the welfare and support of the payee’s
depository institution in the absence of any
compensation law excludable from the dependents and
action to redirect the structured settlement
gross income of the recipient under
payments to that institution (or agent or
section 104(a)(1) and
successor thereof) or otherwise to enforce
such blanket security interest as against
the structured settlement payment rights.
8876
For Privacy Act and Paperwork Reduction Act Notice, see page 2. Cat. No. 33529K Form (Rev. 12-2008)

2
Form 8876 (Rev. 12-2008) Page
● Is issued under the authority of an Late payment of tax. Generally, the You are not required to provide the
penalty for not paying tax when due is 1⁄ 2
applicable state statute by an applicable information requested on a form that is
of 1% of the unpaid amount, up to a
state court, or by the responsible subject to the Paperwork Reduction Act
maximum of 25%, for each month or part
administrative authority (if any) that has unless the form displays a valid OMB
of a month the tax remains unpaid. The
exclusive jurisdiction over the underlying control number. Books or records relating
penalty is imposed on the net amount due.
action or proceeding that was resolved by to a form or its instructions must be
This penalty will not be imposed if you
means of the structured settlement. retained as long as their contents may
have reasonable cause for not paying on become material in the administration of
Who Must File time. any Internal Revenue law. We ask for the
information on this form to carry out the
Generally, you must file Form 8876 if you
Additional Information tax laws of the United States. We need it
acquire directly or indirectly structured
to figure and collect the right amount of
settlement payment rights in a structured For more details, see section 5891 and tax. If you do not file a return, do not
settlement factoring transaction entered Regulations section 157.5891-1. provide the information we ask for, or
into after February 21, 2002. However, do
provide fraudulent information, you may
Specific Instructions
not file Form 8876 if the transfer of
be charged penalties and be subject to
structured settlement payment rights was
criminal prosecution.
Name and address. Enter the name
approved in advance in a qualified order,
shown on your most recently filed federal
as no excise tax is due. Generally, tax returns and return
income tax return. Include the suite, room, information are confidential, as required by
When To File apartment, or other unit number after the section 6103. However, section 6103
street address. If the Post Office does not allows or requires the Internal Revenue
File Form 8876 by the 90th day following deliver mail to the street address and the Service to disclose or give the information
the receipt of structured settlement taxpayer has a P.O. box, show the box shown on your tax return to others as
payment rights in a structured settlement number instead of the street address. described in the Code. For example, we
factoring transaction.
may disclose your tax information to the
Identifying number. If you are an
If you need more time, file Form 7004, Department of Justice to enforce the tax
individual, enter your social security
Application for Automatic Extension of laws, both civil and criminal, and to cities,
number. Other filers should enter their
Time To File Certain Business Income Tax, states, the District of Columbia, U.S.
employer identification number.
Information, and Other Returns, by the due commonwealths or possessions, and
Line 5. Tax paid with Form 7004. If you
date of Form 8876. Form 7004 does not certain foreign governments to carry out
filed Form 7004 for the payment rights
extend the time for payment of tax. their laws. We may also disclose this
received on the date shown on the top of information to other countries under a tax
Where To File this Form 8876, enter the amount of tax treaty, to federal and state agencies to
paid, if any, when you filed that extension enforce federal nontax criminal laws, or to
File Form 8876 with the Internal Revenue application. federal law enforcement and intelligence
Service Center, Cincinnati, OH 45999.
agencies to combat terrorism.
Line 6. Tax due. Make your check or
Rounding Off to Whole money order payable to “United States Please keep this notice with your
Treasury.” Write your name, address, records. It may help you if we ask you for
Dollars identifying number, and “Form 8876” on other information. If you have any
the check or money order. questions about the rules for filing and
You can round off cents to whole dollars
giving information, please call or visit any
on your return and schedules. If you do Line 7. Overpayment. The IRS will refund
Internal Revenue Service office.
round to whole dollars, you must round all the amount on line 7 (to the extent you
The time needed to complete and file
amounts. To round, drop amounts under owe no other taxes).
this form will vary depending on individual
50 cents and increase amounts from 50 to
Signature. For information on who must circumstances. The estimated average
99 cents to the next dollar. For example,
sign Form 8876, see the instructions for time is:
$1.39 becomes $1 and $2.50 becomes $3.
the signature section of your federal
Recordkeeping 3 hr., 6 min.
If you have to add two or more amounts income tax return.
to figure the amount to enter on a line, Learning about the law
include cents when adding the amounts Privacy Act and Paperwork Reduction or the form 1 hr., 12 min.
and round off only the total. Act Notice. These Acts require that when Preparing and sending
we ask you for information we must first the form to the IRS 1 hr., 17 min.
Amended Return tell you our legal right to ask for the
If you have comments concerning the
information, why we are asking for it, and
To amend a previously filed Form 8876, accuracy of these time estimates or
how it will be used. We must also tell you
file a corrected Form 8876 and write suggestions for making this form simpler,
what could happen if we do not receive it
“Amended” at the top of the form. we would be happy to hear from you. You
and whether your response is voluntary,
can write to the Internal Revenue Service,
required to obtain a benefit, or mandatory
Interest and Penalties Tax Products Coordinating Committee,
under the law.
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Interest. Interest is charged on taxes not Our legal right to ask for information is Ave. NW, IR-6526, Washington, DC 20224.
paid by the due date at a rate determined sections 6001, 6011, and 6012(a) and their Do not send the tax form to this address.
under section 6621. regulations, which require you to file a Instead, see Where To File on this page.
return or statement with us for any tax for
Late filing of return. Generally, a penalty
which you are liable. Your response is
of 5% a month or part of a month, up to a
mandatory under these sections. Section
maximum of 25%, is imposed on the net
6109 requires you to provide your
amount due if Form 8876 is not filed when
identifying number. This is so we know
due. This penalty will not be imposed if
who you are, and can process your return
you have reasonable cause for not filing on
and other papers. You must fill in all parts
time. If you do, attach an explanation.
of the tax form that apply to you.