This document provides a correction to the Instructions for Form 8918 Material Advisor Disclosure Statement. It notes errors in two bullet points under the heading "Who is a Material Advisor" and provides corrected versions. Specifically, the word "expects" should be replaced with "expect" in the second and fourth bullet points. The document also states that the Instructions for Form 8918 will not be updated at this time but the correction will be included in a future revision.
CA Varun Sethi Ind AS 20 - Accounting for Government GrantsVarun Sethi
This document discusses IndAS 20, which provides guidance on accounting for government grants and disclosure of government assistance. It begins with definitions of key terms like government, government assistance, and government grants. It then explains the two approaches to accounting for grants - the capital approach for asset-related grants and the income approach for other grants. It provides guidance on recognition, measurement, presentation, and disclosure of government grants under the income and capital approaches in the financial statements. Specific topics covered include accounting for non-monetary grants, forgivable loans, repayment of grants and presentation in statements of profit and loss, balance sheet and cash flows.
- The document proposes instituting a mandatory insurance surcharge on property and casualty insurance policies in states like New York and New Jersey to generate funds for infrastructure resiliency initiatives.
- Using a proven credit structure, the funds could be accessed through capital markets to efficiently and quickly maximize proceeds for projects to mitigate potential damage from future natural disasters.
- Over half of property and casualty insurance premiums in the target states come from automobile and homeowners' policies, providing a substantial untapped source of funding that could reduce future economic costs from climate events.
This article analyzes Section 177EA of the Income Tax Assessment Act 1936, which allows the Commissioner to deny imputation benefits from franked distributions if they result from a scheme. Recently, the Commissioner has broadly interpreted this section to attack aspects of dividend imputation. The article argues the Commissioner's view is too broad based on the legislative intent. It presents a basic scenario of an investor buying shares cum-dividend and asks if this constitutes a scheme under s. 177EA. The authors conclude the section was aimed at dividend streaming and franking credit trading, not ordinary share trading.
Transaction Advisors provides services related to mergers, acquisitions, valuations, due diligence, structuring, and funding. Their services help clients with acquisition/divestitures, tax optimization, regulatory compliance, and securing private equity/venture capital. They have expertise in areas like inbound/outbound investment structuring, financial/legal/tax due diligence, and pre-fund raising restructuring to improve valuations.
Accounting policies refer to the specific principles and methods used to prepare financial statements. Disclosing all significant accounting policies provides transparency and allows comparisons between companies. Companies record financial transactions through an accounting process that results in financial statements relied on by external stakeholders. Valuing inventory, preparing cash flow statements, accounting for contingencies and subsequent events, classifying items in income statements, and accounting for depreciation, construction contracts, and changes in policies are all important accounting topics covered in the document. Vouching transactions and verifying assets are key audit procedures to ensure the accuracy of financial records and existence of reported assets.
This document provides an overview of Form 8938 filing requirements. It discusses who must file Form 8938, what types of foreign assets are considered specified foreign financial assets (SFFAs) that must be reported, and some exceptions. Key points include:
- Form 8938 must be filed by U.S. citizens, residents, and some nonresidents who hold specified foreign financial assets above the reporting threshold.
- SFFAs include foreign financial accounts and other foreign assets held for investment, such as stocks, bonds, and interests in foreign entities.
- Assets like personal residences and retirement accounts are usually not considered SFFAs. However, foreign real estate held through a foreign entity must be reported by
CA Varun Sethi Ind AS 20 - Accounting for Government GrantsVarun Sethi
This document discusses IndAS 20, which provides guidance on accounting for government grants and disclosure of government assistance. It begins with definitions of key terms like government, government assistance, and government grants. It then explains the two approaches to accounting for grants - the capital approach for asset-related grants and the income approach for other grants. It provides guidance on recognition, measurement, presentation, and disclosure of government grants under the income and capital approaches in the financial statements. Specific topics covered include accounting for non-monetary grants, forgivable loans, repayment of grants and presentation in statements of profit and loss, balance sheet and cash flows.
- The document proposes instituting a mandatory insurance surcharge on property and casualty insurance policies in states like New York and New Jersey to generate funds for infrastructure resiliency initiatives.
- Using a proven credit structure, the funds could be accessed through capital markets to efficiently and quickly maximize proceeds for projects to mitigate potential damage from future natural disasters.
- Over half of property and casualty insurance premiums in the target states come from automobile and homeowners' policies, providing a substantial untapped source of funding that could reduce future economic costs from climate events.
This article analyzes Section 177EA of the Income Tax Assessment Act 1936, which allows the Commissioner to deny imputation benefits from franked distributions if they result from a scheme. Recently, the Commissioner has broadly interpreted this section to attack aspects of dividend imputation. The article argues the Commissioner's view is too broad based on the legislative intent. It presents a basic scenario of an investor buying shares cum-dividend and asks if this constitutes a scheme under s. 177EA. The authors conclude the section was aimed at dividend streaming and franking credit trading, not ordinary share trading.
Transaction Advisors provides services related to mergers, acquisitions, valuations, due diligence, structuring, and funding. Their services help clients with acquisition/divestitures, tax optimization, regulatory compliance, and securing private equity/venture capital. They have expertise in areas like inbound/outbound investment structuring, financial/legal/tax due diligence, and pre-fund raising restructuring to improve valuations.
Accounting policies refer to the specific principles and methods used to prepare financial statements. Disclosing all significant accounting policies provides transparency and allows comparisons between companies. Companies record financial transactions through an accounting process that results in financial statements relied on by external stakeholders. Valuing inventory, preparing cash flow statements, accounting for contingencies and subsequent events, classifying items in income statements, and accounting for depreciation, construction contracts, and changes in policies are all important accounting topics covered in the document. Vouching transactions and verifying assets are key audit procedures to ensure the accuracy of financial records and existence of reported assets.
This document provides an overview of Form 8938 filing requirements. It discusses who must file Form 8938, what types of foreign assets are considered specified foreign financial assets (SFFAs) that must be reported, and some exceptions. Key points include:
- Form 8938 must be filed by U.S. citizens, residents, and some nonresidents who hold specified foreign financial assets above the reporting threshold.
- SFFAs include foreign financial accounts and other foreign assets held for investment, such as stocks, bonds, and interests in foreign entities.
- Assets like personal residences and retirement accounts are usually not considered SFFAs. However, foreign real estate held through a foreign entity must be reported by
The document discusses transfer pricing and related tax issues with specific reference to Pakistan. It provides definitions and guidelines related to transfer pricing according to OECD and Pakistani tax law. Some key points include:
- Multinational enterprises use transfer pricing to manipulate profits and taxes between subsidiaries in different countries. OECD has established guidelines for determining appropriate transfer prices.
- Transfer prices determine taxable profits in different jurisdictions. Tax motives for improper transfer pricing include reducing taxable profits and avoiding withholding taxes.
- Pakistani tax law includes some transfer pricing provisions but the legislation is still developing. The law authorizes tax authorities to distribute profits appropriately between associates.
- The arm's length principle means transactions between associates should
This document provides instructions for completing Schedule E of Form 1040 to report supplemental income and loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs. Key details include:
- Schedule E is used to report income or loss from various sources including rental real estate, royalties, partnerships, and S corporations.
- Forms that may also need to be filed depending on the type of income include Form 4562 for depreciation, Form 4797 for sales of business property, and Form 8582 for passive activity losses.
- Special rules apply for husband-wife qualified joint ventures treating a jointly owned and operated rental real estate business as
The FASB is contemplating an exposure draft to propose an update to the accounting standard on statements of cash flows. The update aims to reduce diversity in practice regarding the classification of certain cash receipts and payments. Specifically, it would provide classification guidance for eight cash flow issues that currently have no guidance or unclear guidance. Adopting the update would standardize reporting and enhance comparability. The FASB is seeking stakeholder feedback on the proposed update before determining an effective date.
This document outlines the roles and responsibilities of stakeholders in implementing the Tax Incentives Management and Transparency Act (TIMTA) or R.A. 10708. Key points:
1. Registered business entities must file tax returns and reports with the Bureau of Internal Revenue and Investment Promotion Agencies.
2. Investment Promotion Agencies must submit consolidated tax incentives reports to the BIR and Department of Finance.
3. The BIR and Bureau of Customs submit tax data to the DOF.
4. The DOF maintains a tax incentives database and submits aggregate data to oversight bodies. Compliance is monitored and penalties apply for non-compliance.
A complete presentation on Transfer Pricing study, report and procedural aspect 92D. India has signed the historic multilateral convention with 65 countries on BEPS. Safe Harbour Rules u/s 92CB now revised
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% from the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 in securities purchased and $357.08 in securities sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.
1. The document provides information about account statements for TD Ameritrade clients, including details on portfolio reports, account activity summaries, cash services transactions, and positions held.
2. Key sections of the portfolio report are summarized, including summaries of the portfolio value, asset allocation, account activity, income and expenses, and performance metrics.
3. Important disclosures are provided regarding account protection, tax reporting, cost basis reporting, margin agreements, and current security valuations.
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% compared to the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 of securities purchased and $357.08 sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.12 was
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% compared to the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 of securities purchased and $357.08 sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.12 was
GAZT VAT guide on Financial Services - EnglishFarhan Osman
This guideline is directed for businesses involved in the Financial Services sector, including commercial banks, insurers, asset financing companies; or any business that provides financial services as part of its overall activities.
"In the times where acquisitions and buyouts are trending, the field of due diligence emerges as one of the most relevant fields. Prima facie, without delving in"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/process-due-diligence.html
"In the times where acquisitions and buyouts are trending, the field of due diligence emerges as one of the most relevant fields. Prima facie, without delving in"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/process-due-diligence.html
Snowbirding 101 Ep 03: 1031 exchange informationBill Butler
The document provides guidance on using a vacation home or residential property in a 1031 exchange. It summarizes Revenue Procedure 2008-16, which created a safe harbor for treating such properties as investment properties for 1031 exchange purposes if certain ownership and use requirements are met. Specifically, the relinquished property must be owned for 24 months prior to the exchange and the replacement property must be owned for 24 months after the exchange. Additionally, the property must be rented at fair market rates for at least 14 days within each of the two 12-month periods constituting the 24-month qualifying use period. Personal use of the property cannot exceed 14 days or 10% of the rental period within each 12-month period. The Procedure provides a safe
Taxmann's CRACKER | Advanced Auditing & Professional EthicsTaxmann
Taxmann’s CRACKER for Advanced Auditing & Professional Ethics is prepared exclusively for the requirement of the Final Level of Chartered Accountancy Examination. It covers the entire revised, new syllabus as per ICAI.
The Present Publication is the 8th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [1,000+ Questions and Case Studies] with complete answers
• [ICAI Examiner Comments] along with Past Exam Questions are included
• Coverage of this book includes:
◦ All Past Exam Questions
▪ CA Final November 2020 (New Syllabus) – Suggested Answers
▪ CA Final January 2021 (New Syllabus) – Suggested Answers
◦ Questions from RTPs and MTPs of ICAI
• [Point wise] answers for easy learning
• [Chapter-wise] marks distribution for Past Exams
• [Most Updated & Amended] This book is updated & amended as per the following:
◦ Companies (Audit and Auditor’s) Amendment Rules, 2021
◦ Companies (Amendment) Act 2020
◦ Companies (Auditor’s Report) Order 2020
◦ SEBI (LODR) Regulation 2015
◦ Form 3CD and Form GSTR 9C (Revised)
◦ Finance Act 2021
◦ Revised Code of Ethics
◦ Revised Statement of Peer Review 2020
Also Available:
• [8th Edition] of Taxmann’s Textbook for Advanced Auditing & Professional Ethics (New Syllabus)
• [6th Edition] of Taxmann’s MCQs & Integrate Case Studies on Advanced Auditing & Professional Ethics (Old/New Syllabus)
• [1st Edition] Taxmann’s Quick Revision Charts for Advanced Auditing & Professional Ethics
• Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies
The contents of the book are as follows:
• Quality Control and Engagement Standards
• Audit Planning, Strategy and Execution
• Risk Assessment and Internal Control
• Audit in an Automated Environment
• Professional Ethics
• Company Audit
• Audit Reports
• CARO 2020
• Audit of Consolidated Financial Statements
• Audit of Dividend
• Audit Committee and Corporate Governance
• Liabilities of Auditors
• Internal Audit
• Management and Operational Audit
• Audit under Fiscal Laws
• Due Diligence, Investigation & Forensic Audit
• Peer Review & Quality Review
• Audit of Banks
• Audit of Non-Banking Finance Companies
• Audit of Insurance Companies
• Audit of Public Sector Undertakings
• Questions on Ind-AS
• Questions on Schedule III
Revenue recognition
Academic Resource Center
Revenue recognition Page 2
General
► This new guidance will supersede almost all existing revenue guidance under US
GAAP (including industry guides) and IFRS.
► The AICPA has formed various industry task forces to help develop non-authoritative
guidance.
► The FASB and IASB announced the formation of a joint transition resource group
(TRG) that will be responsible for informing the Boards about interpretive issues that
arise as companies implement the revenue standards. The TRG will not issue
guidance.
The FASB and IASB issued new guidance on accounting for revenue
recognition, Revenue Recognition – Revenue from Contracts with
Customers.
► FASB – ASC 606 (ASU 2014-09)
► IASB – IFRS 15
May 2014
Academic Resource Center
Revenue recognition Page 3
General
► ASC 606 applies to both public and non-public entities. For non-public entities, there is
some specific relief related to disclosures, transition and the effective date.
► At the December 5, 2016 AICPA National Conference on Current SEC and PCAOB
Developments, Sylvia E. Alicea, a professional accounting fellow of the office of the chief
accountant (OCA) made the following comments:
“SAB Topic 13 will continue to apply to registrants prior to their adoption of the new
revenue standard so it will continue to be relevant until all registrants have completed their
transition. New guidance will be provided, as needed. However, when OCA evaluates
implementation-related consultations under U.S. GAAP, our starting point is the new
revenue standard (and any subsequent amendments) as issued by the FASB. Therefore, I
believe registrants should also apply that model (as opposed to SAB Topic 13) when
evaluating their revenue arrangements for adoption of Topic 606.”
► IFRS 15 does not specifically apply to non-public entities. These non-public entities may
apply IFRS for Small and Medium-Sized Entities.
Academic Resource Center
Revenue recognition Page 4
Effective date and adoption methods
US GAAP
► For US public entities, certain not-for-profit entities and
certain employee benefit plans, the guidance is effective
for annual periods beginning after December 15, 2017.
Early adoption is permitted for annual periods beginning
after December 15, 2016.
► All other US entities are required to apply the standard to
annual periods beginning after December 15, 2018 but
can also early adopt beginning after December 15, 2016.
IFRS
► The guidance is effective for annual
periods beginning on or after
January 1, 2018.
► Early adoption is permitted. Early
adoption was permitted when IFRS
15 was originally issued.
The adoption methods available for both US GAAP and IFRS include the full retrospective approach
and the modified retrospective approach. These are further explained on the following slide.
Academic Resource Center
Revenue recognition Page 5
Effective date and adoption methods
Key .
The Commissioner of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO, a corporation that provided collection, consultative, and technical services to its affiliate Philamlife. COMASERCO claimed it was not engaged in business and did not generate profit. The Court of Tax Appeals affirmed the assessment but reduced the amount. The Court of Appeals then reversed, finding COMASERCO not liable for VAT. The Supreme Court granted the Commissioner's petition and reinstated the decision of the Court of Tax Appeals, finding that providing services to affiliates for a fee constitutes engaging in business for VAT purposes, regardless of profit motive.
Overview of Sapient Services' due diligence offerings.pdfSapient Services
Sapient Services offers diligent and meticulous due diligence service, providing clients with comprehensive assessments and insights into potential investments, partnerships, and business transactions.
Visit - https://sapientservices.com/due-diligence.php
IAS 18 provides guidance on revenue recognition from the sale of goods, rendering of services, and interest, royalties, and dividends. It defines revenue as the gross inflow of economic benefits from an entity's ordinary activities. For revenue to be recognized under IAS 18, it must be probable future benefits will flow to the entity and the amount can be reliably measured. IAS 18 also addresses agency relationships and determining whether an entity is acting as a principal or agent in a transaction.
This document is an application for a California homebuyer's tax credit. It contains sections for the seller to certify that the home has never been occupied, as well as sections for the escrow company to provide closing details. Finally, there are sections for up to three qualified buyers to provide their contact and ownership information and certify that they intend to use the home as their primary residence for at least two years. The buyers will receive a tax credit of up to 5% of the home's purchase price or $10,000, whichever is less.
This document contains Forms 593-C and 593-E and instructions for real estate withholding in California for 2009. It explains that real estate withholding is a prepayment of estimated income tax due from gains on real estate sales in California. The Real Estate Escrow Person is responsible for providing the forms to sellers and withholding the appropriate amount based on the forms submitted.
More Related Content
Similar to Inst 8918-Instructions for Form 8918, Material Advisor Disclosure Statement
The document discusses transfer pricing and related tax issues with specific reference to Pakistan. It provides definitions and guidelines related to transfer pricing according to OECD and Pakistani tax law. Some key points include:
- Multinational enterprises use transfer pricing to manipulate profits and taxes between subsidiaries in different countries. OECD has established guidelines for determining appropriate transfer prices.
- Transfer prices determine taxable profits in different jurisdictions. Tax motives for improper transfer pricing include reducing taxable profits and avoiding withholding taxes.
- Pakistani tax law includes some transfer pricing provisions but the legislation is still developing. The law authorizes tax authorities to distribute profits appropriately between associates.
- The arm's length principle means transactions between associates should
This document provides instructions for completing Schedule E of Form 1040 to report supplemental income and loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs. Key details include:
- Schedule E is used to report income or loss from various sources including rental real estate, royalties, partnerships, and S corporations.
- Forms that may also need to be filed depending on the type of income include Form 4562 for depreciation, Form 4797 for sales of business property, and Form 8582 for passive activity losses.
- Special rules apply for husband-wife qualified joint ventures treating a jointly owned and operated rental real estate business as
The FASB is contemplating an exposure draft to propose an update to the accounting standard on statements of cash flows. The update aims to reduce diversity in practice regarding the classification of certain cash receipts and payments. Specifically, it would provide classification guidance for eight cash flow issues that currently have no guidance or unclear guidance. Adopting the update would standardize reporting and enhance comparability. The FASB is seeking stakeholder feedback on the proposed update before determining an effective date.
This document outlines the roles and responsibilities of stakeholders in implementing the Tax Incentives Management and Transparency Act (TIMTA) or R.A. 10708. Key points:
1. Registered business entities must file tax returns and reports with the Bureau of Internal Revenue and Investment Promotion Agencies.
2. Investment Promotion Agencies must submit consolidated tax incentives reports to the BIR and Department of Finance.
3. The BIR and Bureau of Customs submit tax data to the DOF.
4. The DOF maintains a tax incentives database and submits aggregate data to oversight bodies. Compliance is monitored and penalties apply for non-compliance.
A complete presentation on Transfer Pricing study, report and procedural aspect 92D. India has signed the historic multilateral convention with 65 countries on BEPS. Safe Harbour Rules u/s 92CB now revised
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% from the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 in securities purchased and $357.08 in securities sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.
1. The document provides information about account statements for TD Ameritrade clients, including details on portfolio reports, account activity summaries, cash services transactions, and positions held.
2. Key sections of the portfolio report are summarized, including summaries of the portfolio value, asset allocation, account activity, income and expenses, and performance metrics.
3. Important disclosures are provided regarding account protection, tax reporting, cost basis reporting, margin agreements, and current security valuations.
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% compared to the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 of securities purchased and $357.08 sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.12 was
- The portfolio report provides a summary of the account holder's investment holdings as of March 31, 2015, including current and prior month values and performance metrics. The portfolio is comprised primarily of stocks (96.1%) with a current total value of $185.87.
- During the reporting period, the overall portfolio value decreased by $172.53 or 48.1% compared to the prior month. This was largely driven by a $356.87 decrease in the value of mutual funds held.
- Cash activity for the period included $240.57 of securities purchased and $357.08 sold, resulting in a closing cash balance of -$7.92. Dividend income of $1.12 was
GAZT VAT guide on Financial Services - EnglishFarhan Osman
This guideline is directed for businesses involved in the Financial Services sector, including commercial banks, insurers, asset financing companies; or any business that provides financial services as part of its overall activities.
"In the times where acquisitions and buyouts are trending, the field of due diligence emerges as one of the most relevant fields. Prima facie, without delving in"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/process-due-diligence.html
"In the times where acquisitions and buyouts are trending, the field of due diligence emerges as one of the most relevant fields. Prima facie, without delving in"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/corporate-law/process-due-diligence.html
Snowbirding 101 Ep 03: 1031 exchange informationBill Butler
The document provides guidance on using a vacation home or residential property in a 1031 exchange. It summarizes Revenue Procedure 2008-16, which created a safe harbor for treating such properties as investment properties for 1031 exchange purposes if certain ownership and use requirements are met. Specifically, the relinquished property must be owned for 24 months prior to the exchange and the replacement property must be owned for 24 months after the exchange. Additionally, the property must be rented at fair market rates for at least 14 days within each of the two 12-month periods constituting the 24-month qualifying use period. Personal use of the property cannot exceed 14 days or 10% of the rental period within each 12-month period. The Procedure provides a safe
Taxmann's CRACKER | Advanced Auditing & Professional EthicsTaxmann
Taxmann’s CRACKER for Advanced Auditing & Professional Ethics is prepared exclusively for the requirement of the Final Level of Chartered Accountancy Examination. It covers the entire revised, new syllabus as per ICAI.
The Present Publication is the 8th Edition & Updated till 30th April 2021 for CA-Final | New Syllabus, with the following noteworthy features:
• Strictly as per the New Syllabus of ICAI
• [1,000+ Questions and Case Studies] with complete answers
• [ICAI Examiner Comments] along with Past Exam Questions are included
• Coverage of this book includes:
◦ All Past Exam Questions
▪ CA Final November 2020 (New Syllabus) – Suggested Answers
▪ CA Final January 2021 (New Syllabus) – Suggested Answers
◦ Questions from RTPs and MTPs of ICAI
• [Point wise] answers for easy learning
• [Chapter-wise] marks distribution for Past Exams
• [Most Updated & Amended] This book is updated & amended as per the following:
◦ Companies (Audit and Auditor’s) Amendment Rules, 2021
◦ Companies (Amendment) Act 2020
◦ Companies (Auditor’s Report) Order 2020
◦ SEBI (LODR) Regulation 2015
◦ Form 3CD and Form GSTR 9C (Revised)
◦ Finance Act 2021
◦ Revised Code of Ethics
◦ Revised Statement of Peer Review 2020
Also Available:
• [8th Edition] of Taxmann’s Textbook for Advanced Auditing & Professional Ethics (New Syllabus)
• [6th Edition] of Taxmann’s MCQs & Integrate Case Studies on Advanced Auditing & Professional Ethics (Old/New Syllabus)
• [1st Edition] Taxmann’s Quick Revision Charts for Advanced Auditing & Professional Ethics
• Taxmann’s Combo for Textbook + Cracker + MCQs & Integrated Case Studies
The contents of the book are as follows:
• Quality Control and Engagement Standards
• Audit Planning, Strategy and Execution
• Risk Assessment and Internal Control
• Audit in an Automated Environment
• Professional Ethics
• Company Audit
• Audit Reports
• CARO 2020
• Audit of Consolidated Financial Statements
• Audit of Dividend
• Audit Committee and Corporate Governance
• Liabilities of Auditors
• Internal Audit
• Management and Operational Audit
• Audit under Fiscal Laws
• Due Diligence, Investigation & Forensic Audit
• Peer Review & Quality Review
• Audit of Banks
• Audit of Non-Banking Finance Companies
• Audit of Insurance Companies
• Audit of Public Sector Undertakings
• Questions on Ind-AS
• Questions on Schedule III
Revenue recognition
Academic Resource Center
Revenue recognition Page 2
General
► This new guidance will supersede almost all existing revenue guidance under US
GAAP (including industry guides) and IFRS.
► The AICPA has formed various industry task forces to help develop non-authoritative
guidance.
► The FASB and IASB announced the formation of a joint transition resource group
(TRG) that will be responsible for informing the Boards about interpretive issues that
arise as companies implement the revenue standards. The TRG will not issue
guidance.
The FASB and IASB issued new guidance on accounting for revenue
recognition, Revenue Recognition – Revenue from Contracts with
Customers.
► FASB – ASC 606 (ASU 2014-09)
► IASB – IFRS 15
May 2014
Academic Resource Center
Revenue recognition Page 3
General
► ASC 606 applies to both public and non-public entities. For non-public entities, there is
some specific relief related to disclosures, transition and the effective date.
► At the December 5, 2016 AICPA National Conference on Current SEC and PCAOB
Developments, Sylvia E. Alicea, a professional accounting fellow of the office of the chief
accountant (OCA) made the following comments:
“SAB Topic 13 will continue to apply to registrants prior to their adoption of the new
revenue standard so it will continue to be relevant until all registrants have completed their
transition. New guidance will be provided, as needed. However, when OCA evaluates
implementation-related consultations under U.S. GAAP, our starting point is the new
revenue standard (and any subsequent amendments) as issued by the FASB. Therefore, I
believe registrants should also apply that model (as opposed to SAB Topic 13) when
evaluating their revenue arrangements for adoption of Topic 606.”
► IFRS 15 does not specifically apply to non-public entities. These non-public entities may
apply IFRS for Small and Medium-Sized Entities.
Academic Resource Center
Revenue recognition Page 4
Effective date and adoption methods
US GAAP
► For US public entities, certain not-for-profit entities and
certain employee benefit plans, the guidance is effective
for annual periods beginning after December 15, 2017.
Early adoption is permitted for annual periods beginning
after December 15, 2016.
► All other US entities are required to apply the standard to
annual periods beginning after December 15, 2018 but
can also early adopt beginning after December 15, 2016.
IFRS
► The guidance is effective for annual
periods beginning on or after
January 1, 2018.
► Early adoption is permitted. Early
adoption was permitted when IFRS
15 was originally issued.
The adoption methods available for both US GAAP and IFRS include the full retrospective approach
and the modified retrospective approach. These are further explained on the following slide.
Academic Resource Center
Revenue recognition Page 5
Effective date and adoption methods
Key .
The Commissioner of Internal Revenue issued an assessment for deficiency value-added tax against COMASERCO, a corporation that provided collection, consultative, and technical services to its affiliate Philamlife. COMASERCO claimed it was not engaged in business and did not generate profit. The Court of Tax Appeals affirmed the assessment but reduced the amount. The Court of Appeals then reversed, finding COMASERCO not liable for VAT. The Supreme Court granted the Commissioner's petition and reinstated the decision of the Court of Tax Appeals, finding that providing services to affiliates for a fee constitutes engaging in business for VAT purposes, regardless of profit motive.
Overview of Sapient Services' due diligence offerings.pdfSapient Services
Sapient Services offers diligent and meticulous due diligence service, providing clients with comprehensive assessments and insights into potential investments, partnerships, and business transactions.
Visit - https://sapientservices.com/due-diligence.php
IAS 18 provides guidance on revenue recognition from the sale of goods, rendering of services, and interest, royalties, and dividends. It defines revenue as the gross inflow of economic benefits from an entity's ordinary activities. For revenue to be recognized under IAS 18, it must be probable future benefits will flow to the entity and the amount can be reliably measured. IAS 18 also addresses agency relationships and determining whether an entity is acting as a principal or agent in a transaction.
Similar to Inst 8918-Instructions for Form 8918, Material Advisor Disclosure Statement (20)
This document is an application for a California homebuyer's tax credit. It contains sections for the seller to certify that the home has never been occupied, as well as sections for the escrow company to provide closing details. Finally, there are sections for up to three qualified buyers to provide their contact and ownership information and certify that they intend to use the home as their primary residence for at least two years. The buyers will receive a tax credit of up to 5% of the home's purchase price or $10,000, whichever is less.
This document contains Forms 593-C and 593-E and instructions for real estate withholding in California for 2009. It explains that real estate withholding is a prepayment of estimated income tax due from gains on real estate sales in California. The Real Estate Escrow Person is responsible for providing the forms to sellers and withholding the appropriate amount based on the forms submitted.
This document provides instructions for completing Form 593-V Payment Voucher for Real Estate Withholding Electronic Submission. Key details include:
1) Form 593-V is used to remit real estate withholding payment to the Franchise Tax Board if Form 593 was filed electronically. It must include the withholding agent's identifying information and payment amount.
2) Payments can be made by check or money order payable to the Franchise Tax Board, or through electronic funds transfer for large payments. The payment must match the electronically filed Form 593.
3) Payments are due within 20 days of the end of the month in which the real estate transaction occurred. Interest and penalties
This document provides instructions for California real estate withholding on installment sales. It explains that for tax years beginning on or after January 1, 2009, the buyer is required to withhold taxes on the principal portion of each installment payment for properties sold via an installment sale. The form guides the buyer through providing their contact information, the seller's information, acknowledging the withholding requirement, and signing to indicate they understand their obligation to withhold taxes and send payments to the state. Escrow agents are instructed to send the initial withholding amount to the state and provide copies of documents to help facilitate ongoing withholding as future installment payments are made.
This document is a California Form 593-C, which is a Real Estate Withholding Certificate. It allows a seller of California real estate to certify exemptions from real estate withholding requirements. The form has four parts: seller information, certifications that fully exempt from withholding, certifications that may partially or fully exempt, and the seller's signature. Checking boxes in Part II or III can allow full or partial exemption from the default 3 1/3% withholding on the sales price of California real estate.
This document is a California Form 593 for real estate withholding tax. It contains information about the withholding agent, seller or transferor, escrow or exchange details, and transaction details. The form requires the seller to sign a perjury statement if electing an optional gain on sale calculation method rather than the default 3 1/3% of total sales price withholding amount.
This document provides instructions for completing Form 592-V, the payment voucher for electronically filed Form 592 (Quarterly Resident and Nonresident Withholding Statement) and Form 592-F (Foreign Partner or Member Annual Return). Key details include verifying complete information is provided on the voucher, rounding cents to dollars, mailing the payment and voucher to the Franchise Tax Board by the payment due date, and interest and penalties for late payments.
This document is a California Form 592-B for the tax year 2009. It provides instructions for withholding agents and recipients regarding nonresident and resident withholding. Key details include:
- Form 592-B is used to report income subject to withholding and the amount of California tax withheld.
- It must be provided to recipients by January 31 and to foreign partners by the 15th day of the 4th month following the close of the taxable year.
- The recipient should attach Copy B to their California tax return to claim the withholding amount.
This document is a Foreign Partner or Member Quarterly Withholding Remittance Statement form for tax year 2009 from the California Franchise Tax Board. It contains instructions for three installment payments due by the 15th day of the 4th, 6th, and 9th months of the tax year. The form collects identifying information about the Withholding Agent such as name, address, ID number, and payment amounts to be remitted to the Franchise Tax Board.
This document is a Quarterly Resident and Nonresident Withholding Statement form for tax year 2009. It is used to report tax amounts withheld from payments made to independent contractors, recipients of rents/royalties, distributions to shareholders/partners/beneficiaries, and other types of income. The form includes sections to enter information about the withholding agent, types of income, amounts of tax withheld and due, and a schedule of payees listing details of payments made and tax withheld for each recipient. Instructions are provided on filing deadlines, common errors to avoid, electronic filing requirements, interest and penalties.
This document is a Nonresident Withholding Exemption Certificate form used to certify an exemption from withholding on distributions of previously reported income from an S corporation, partnership, or LLC. It allows a nonresident shareholder, partner, or member to claim exemption if the income represented by the distribution was already reported on their California tax return. The form requires information about the entity and individual, and certification that the income has been reported. It is to be kept by the entity and presented to claim exemption from withholding requirements on distributions of prior year income.
This document is a Withholding Exemption Certificate form from the California Franchise Tax Board. It allows individuals and entities to certify an exemption from California nonresident income tax withholding. The form contains checkboxes for different types of taxpayers, including individuals, corporations, partnerships, LLCs, tax-exempt entities, and trusts, to claim an exemption based on their status. It requires the taxpayer's name, address, and signature to certify that the information provided is true and correct.
This document is a request form for a waiver of nonresident withholding in California. It requests information about the requester, withholding agent, and payees. The requester provides their name and address and selects the type of income payment for which a waiver is requested. The withholding agent's name and address are also provided. In the vendor/payee section, names, addresses, and tax identification numbers are listed along with the reason for waiver request. Reasons include having current tax returns on file, making estimated payments, being a member of a combined reporting entity, or other special circumstances. The form is signed under penalty of perjury.
This document is a Nonresident Withholding Allocation Worksheet (Form 587) used to determine if withholding of income tax is required for payments made by a withholding agent to a nonresident vendor/payee. The vendor/payee provides information about the types of payments received and allocation of income between California and other states. The withholding agent uses this information to determine if withholding of 7% is required based on the amount of California-source income payments exceeding $1,500.
This document is a tax return form for California's nonadmitted insurance tax. It provides instructions for calculating taxes owed on insurance premiums paid to insurers not authorized to conduct business in California. The form includes sections to enter the taxpayer's information, identify the tax period and insurance contracts, compute the tax amount, and make payments or claim refunds. It also provides directions on filing amended returns, payment due dates, and authorizing a third party to discuss the filing with the tax agency.
The document provides instructions for Form 541-ES, which is used to calculate and pay estimated tax for estates and trusts. Key details include:
- Estimated tax payments for 2009 are now required to be 30% of the estimated tax liability for the 1st and 2nd installments and 20% for the 3rd and 4th installments.
- Estates and trusts with a 2009 adjusted gross income of $1,000,000 or more must base estimated tax payments on their 2009 tax liability rather than the prior year's tax.
- The form and instructions provide guidance on calculating estimated tax, payment due dates, and how to complete and submit Form 541-ES.
This document provides instructions for California taxpayers to estimate their tax liability and make estimated tax payments for tax year 2009. Key details include:
- Taxpayers must make estimated payments if they expect to owe $500 or more in tax for 2009 after subtracting withholding and credits.
- Payments are due April 15, June 15, September 15 of 2009, and January 15 of 2010.
- A worksheet is provided to help calculate estimated tax liability based on 2008 tax return or expected 2009 income.
- Failure to make required estimated payments may result in penalties. Electronic payment is required for payments over $20,000.
This document provides instructions for making estimated tax payments for individuals in California. It includes:
1) Directions for making online payments through the Franchise Tax Board website for ease and to schedule payments up to a year in advance.
2) A form for making estimated tax payments by mail on April 15, June 15, September 15, and January 15 that includes fields for name, address, amounts owed, and payment instructions.
3) Reminders not to combine estimated tax payments with tax payments from the previous year and to write your name and identification number on the check.
This document contains contact information for the California Franchise Tax Board. It lists phone numbers and addresses for various tax-related services, including automated phone services, taxpayer assistance, tax practitioner services, and departments within the FTB that handle issues like collections, bankruptcy, and deductions. The board members and executive officer are also named.
This document provides answers to frequently asked questions about tax audits conducted by the Franchise Tax Board of California. It explains that the purpose of an audit is to fairly verify the correct amount of taxes owed. It addresses questions about obtaining representation, responding to information requests, payment plans if additional taxes are owed, and appeal rights. The document directs taxpayers to contact their auditor or the Franchise Tax Board directly for additional assistance.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
How Poonawalla Fincorp and IndusInd Bank’s Co-Branded RuPay Credit Card Cater...beulahfernandes8
The eLITE RuPay Platinum Credit Card, a strategic collaboration between Poonawalla Fincorp and IndusInd Bank, represents a significant advancement in India's digital financial landscape. Spearheaded by Abhay Bhutada, MD of Poonawalla Fincorp, the card leverages deep customer insights to offer tailored features such as no joining fees, movie ticket offers, and rewards on UPI transactions. IndusInd Bank's solid banking infrastructure and digital integration expertise ensure seamless service delivery in today's fast-paced digital economy. With a focus on meeting the growing demand for digital financial services, the card aims to cater to tech-savvy consumers and differentiate itself through unique features and superior customer service, ultimately poised to make a substantial impact in India's digital financial services space.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
“Amidst Tempered Optimism” Main economic trends in May 2024 based on the results of the New Monthly Enterprises Survey, #NRES
On 12 June 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (May 2024)”.
During the event, the results of the 25-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in May 2024, were presented.
The field stage of the 25-th wave lasted from May 20 to May 31, 2024. In May, 532 companies were surveyed.
The enterprise managers compared the work results in May 2024 with April, assessed the indicators at the time of the survey (May 2024), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
✅ More survey results in the presentation.
✅ Video presentation: https://youtu.be/4ZvsSKd1MzE
What Lessons Can New Investors Learn from Newman Leech’s Success?Newman Leech
Newman Leech's success in the real estate industry is based on key lessons and principles, offering practical advice for new investors and serving as a blueprint for building a successful career.
How to Identify the Best Crypto to Buy Now in 2024.pdfKezex (KZX)
To identify the best crypto to buy in 2024, analyze market trends, assess the project's fundamentals, review the development team and community, monitor adoption rates, and evaluate risk tolerance. Stay updated with news, regulatory changes, and expert opinions to make informed decisions.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
Monthly Market Risk Update: June 2024 [SlideShare]Commonwealth
Markets rallied in May, with all three major U.S. equity indices up for the month, said Sam Millette, director of fixed income, in his latest Market Risk Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
University of North Carolina at Charlotte degree offer diploma Transcripttscdzuip
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How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
How to Invest in Cryptocurrency for Beginners: A Complete Guide
Inst 8918-Instructions for Form 8918, Material Advisor Disclosure Statement
1. Caution - Correction to Instructions for Form 8918 Material Advisor
Disclosure Statement (Rev. Oct. 2007)
On page 1, under the heading Who is a Material Advisor, second paragraph, the
second and fourth bullet points contain an error. The word “expects” should be
“expect” in each bullet point.
The second bullet point should be replaced with the following.
-A taxpayer who you know is or reasonably expect to be required to disclose the
transaction under Regulations section 1.6011-4 because the transaction is or is
reasonably expected to become a reportable transaction other than a listed
transaction or transaction of interest.
The fourth bullet point should be replaced with the following.
-A material advisor who you know is or reasonably expect to be required to
disclose the transaction under section 6111 because the transaction is or is
reasonably expected to become a reportable transaction other than a listed
transaction or transaction of interest.
The Instructions for Form 8918 will not be updated at this time; however, the
correction will be reflected in a future revision.
2. Department of the Treasury
Instructions for Form 8918 Internal Revenue Service
(Rev. October 2007)
Material Advisor Disclosure Statement
Section references are to the Internal corporation. You are not required to file that insures some or all of the tax benefits
Revenue Code unless otherwise noted. Form 8918 unless a taxpayer to whom or of a reportable transaction. Tax result
for whose benefit you provided the tax protection includes insurance company
What’s New statement (defined below) entered into and other third party products commonly
• Form 8918, Material Advisor Disclosure the reportable transaction. If you provide described as tax result insurance. For
Statement, replaces Form 8264, a tax statement to another material more information, see Regulations
Application for Registration of a Tax advisor, you are not required to file Form section 301.6111-3(b)(2)(ii).
Shelter. 8918 unless the reportable transaction is Threshold amount. The threshold
• Submitting a request for a ruling on entered into by a taxpayer to whom or for amount of gross income is $50,000 for a
whether you are required to disclose a whose benefit that material advisor reportable transaction that provides
particular transaction does not suspend provided the tax statement. substantially all of the tax benefits to
the due date for filing Form 8918. See individuals (looking through any
Request for Ruling on page 3. Who is a Material Advisor?
partnerships, S corporations, or trusts).
• A new category of reportable You are a material advisor to a The determination of whether
transaction has been added for transaction if you: substantially all of the tax benefits from a
“transaction of interest” effective for • Provide any material aid, assistance, or reportable transaction are provided to
transactions of interest entered into after advice with respect to the organizing, individuals is based on all the facts and
November 1, 2006. See page 3 for managing, promoting, selling, circumstances. Generally, if 70% or more
details. implementing, insuring, or carrying out of the tax benefits (defined on page 2)
• The “brief asset holding period” and any reportable transaction, and from a reportable transaction are provided
“significant book-tax difference” • You directly or indirectly receive or to individuals (looking through any
categories of reportable transactions have expect to receive gross income in excess partnerships, S corporations, or trusts)
been eliminated. If the date you became a of the threshold amount (defined below) then substantially all of the tax benefits
material advisor for a transaction that for the material aid, assistance, or advice. will be considered to be provided to
qualifies under either of these categories You provide material aid, assistance, individuals.
was before the effective date of its or advice with respect to the organizing,
elimination as a reportable transaction, For all other transactions, the
managing, promoting, selling, threshold amount is $250,000. For listed
the material advisor must disclose the implementing, insuring, or carrying out
transaction. See Eliminated Categories transactions, the threshold amounts are
any transaction if you make or provide a reduced from $50,000 to $10,000 and
on page 3 for details, including effective tax statement to or for the benefit of: from $250,000 to $25,000. For
dates for the elimination of these • A taxpayer who either is required to transactions of interest, the threshold
categories. disclose the transaction under section amounts may be reduced as identified in
6011 because the transaction is a listed the published guidance describing the
General Instructions transaction or a transaction of interest, or transaction. Determine the threshold
would have been required to disclose the amount separately for each reportable
Purpose of Form transaction under section 6011 if the transaction. The threshold amount must
Material advisors to any reportable transaction had become a listed be met independently for each transaction
transaction must disclose certain transaction or a transaction of interest that is a reportable transaction and
information about the reportable within the period of limitations; aggregation of fees among reportable
transaction by filing a Form 8918 with the • A taxpayer who you know is or transactions is not required.
IRS. Form 8918 replaces Form 8264, reasonably expects to be required to
which was previously used by material disclose the transaction under In figuring the amount of gross income
advisors for disclosure. Regulations section 1.6011-4 because you receive directly, or indirectly, for
the transaction is or is reasonably material aid, assistance, or advice,
Material advisors who file a Form 8918 include all the following.
expected to become a reportable
will receive a reportable transaction
transaction other than a listed transaction • Fees for a tax strategy.
number from the IRS. Material advisors
or transaction of interest; • Fees for advice (whether or not tax
must provide the reportable transaction
• A material advisor who is required to advice).
number to all taxpayers and material
disclose the transaction under section • Fees for implementing the reportable
advisors for whom the material advisor transaction.
acts as a material advisor. See Who is a 6111 because the transaction is a listed
Material Advisor below. Every taxpayer transaction or a transaction of interest; or Fees. Fees include consideration in
who has participated in a reportable • A material advisor who you know is or whatever form paid, whether in cash or in
transaction (see What is a Reportable reasonably expects to be required to kind, for:
Transaction? on page 2) must also disclose the transaction under section • Services to analyze the transaction
disclose the transaction on Form 8886, 6111 because the transaction is or is (whether or not related to the tax
Reportable Transaction Disclosure reasonably expected to become a consequences of the transaction),
Statement. For more information, see reportable transaction other than a listed • Services to implement the transaction,
Form 8886 and the Instructions for Form transaction or transaction of interest. • Services to document the transaction,
8886. Tax statement. Generally, a tax and
statement is any statement (including • Services to prepare tax returns to the
Who Must File? another person’s statement), oral or extent return preparation fees are
Generally, every material advisor to a written, that relates to a tax aspect of a unreasonable.
reportable transaction is required to file transaction that causes the transaction to A fee does not include amounts paid to
Form 8918. A material advisor can be an be a reportable transaction. A tax a person, including an advisor, in that
individual, trust, estate, partnership, or statement includes tax result protection person’s capacity as a party to the
Cat. No. 50150N
3. transaction. For example, a fee does not arrangement and it includes any series of and for which the taxpayer (or related
include reasonable charges for the use of steps carried out as part of a plan. party) paid an advisor a minimum fee
capital or the sale or use of property. (defined below).
Substantially Similar
The IRS will scrutinize carefully all of A transaction is substantially similar to A transaction is considered to be
the facts and circumstances to determine another transaction if it is expected to offered under conditions of confidentiality
if consideration received or expected to obtain the same or similar types of tax if the advisor who is paid a minimum fee
be received in connection with a consequences and is either factually places a limitation on the disclosure of the
reportable transaction is gross income similar or based on the same or similar tax treatment or tax structure of the
received directly, or indirectly, for aid, tax strategy. transaction and the limitation on
assistance, or advice. disclosure protects the confidentiality of
Receipt of an opinion regarding the tax the advisor’s tax strategies. The
Employee exception. Generally, you consequences of the transaction is not transaction is treated as confidential even
are not considered to be a material relevant to determine if the transaction is if the conditions of confidentiality are not
advisor if you make a tax statement solely the same as or substantially similar to legally binding on the taxpayer. See
in your capacity as an employee, another transaction. The term Regulations section 1.6011-4(b)(3) for
shareholder, partner, or agent of another substantially similar must be broadly more information.
person. In this case, any tax statement construed in favor of disclosure. See
you make will be considered to be made Minimum fee. For a corporation
Regulations section 1.6011-4(c)(4) for
by your employer, corporation, (excluding S corporations), or a
examples.
partnership, or principal. partnership or trust in which all of the
However, you will be treated as a Tax Benefit owners or beneficiaries are corporations
material advisor if you form or use an A tax benefit includes deductions, (excluding S corporations), the minimum
entity to avoid the rules of section 6111 or exclusions from gross income, fee is $250,000. For all others, the
6112 or the penalties under section 6707 nonrecognition of gain, tax credits, minimum fee is $50,000.
or 6708. adjustments (or the absence of The minimum fee includes all fees for
Date you became a material advisor. adjustments) to the basis of property, a tax strategy, for advice (whether or not
You are a material advisor when all of the status as an entity exempt from federal tax advice), or for the implementation of a
following have occurred (in no particular income taxation, and any other tax transaction. Fees include payment in
order): consequences that may reduce a whatever form paid, whether in cash or in
• You make a tax statement, taxpayer’s federal tax liability by affecting kind, for services to analyze the
• You receive (or expect to receive) the amount, timing, character, or source transaction (whether or not related to the
gross income in excess of the threshold of any item of income, gain, expense, loss tax consequences of the transaction), for
amount, and or credit. services to implement the transaction, for
• The transaction is entered into by the What is a Reportable services to document the transaction, and
taxpayer to whom or for whose benefit Transaction? for services to prepare tax returns to the
you provided the tax statement, or in the extent return preparation fees are
case of a tax statement provided to A reportable transaction is a transaction unreasonable. A taxpayer is treated as
another material advisor, when the described in one or more of the following paying fees to an advisor if the taxpayer
transaction is entered into by a taxpayer categories. See Regulations section knows or should know that the amount it
to whom or for whose benefit that material 1.6011-4(b) for more information. pays will be paid indirectly to the advisor,
advisor provided a tax statement. Listed Transactions such as through a referral fee or
Note. If a transaction that was not a fee-sharing arrangement. Fees do not
A listed transaction is a transaction that is
reportable transaction is identified as a include amounts paid to a person,
the same as or substantially similar to one
listed transaction or a transaction of including an advisor, in that person’s
of the types of transactions that the IRS
interest in published guidance after the capacity as a party to the transaction. The
has determined to be a tax avoidance
occurrence of the 3 events described IRS will scrutinize all of the facts and
transaction.
above, you will be treated as becoming a circumstances in determining whether
These transactions are identified by consideration received in connection with
material advisor on the date the notice, regulation, or other form of
transaction is identified as a listed a confidential transaction constitutes fees.
published guidance as a listed For purposes of determining the minimum
transaction or a transaction of interest. transaction. For existing guidance see: fee, related parties (as described in
You must make reasonable and good • Notice 2004-67, 2004-41 I.R.B. 600; section 267(b) or 707(b)) will be treated
faith efforts to determine when the • Notice 2005-13, 2005-9 I.R.B. 630; and as the same individual or entity.
taxpayer entered into the transaction, • Notice 2007-57, 2007-9 I.R.B. 87.
even if you stop providing services before For updates to this list go to the IRS Transactions With Contractual
the taxpayer enters into the transaction. web page at www.irs.gov/businesses/ Protection
Post-filing advice. You are not corporations and click on Abusive Tax A transaction with contractual protection
considered to be a material advisor Shelters and Transactions. The IRS may is a transaction for which the taxpayer, or
concerning a transaction if you do not issue new or update the existing notice, a related party (as described in sections
make or provide a tax statement about regulation, or other form of guidance that 267(b) or 707(b)), has the right to a full
the transaction until after the first tax identifies transactions as listed refund or partial refund of fees if all or part
return reflecting tax benefit(s) of the transactions. You can find a notice or of the intended tax consequences from
transaction is filed with the IRS. This ruling in the Internal Revenue Bulletin at the transaction are not sustained. It also
exception does not apply to you if it is www.irs.gov/pub/irs-irbs/irbXX-YY.pdf, includes a transaction for which fees are
expected the taxpayer will file a where XX is the two-digit year and YY is contingent on the taxpayer’s realization of
supplemental or amended return the two-digit bulletin number. For tax benefits from the transaction. For
reflecting additional tax benefits from the example, you can find Notice 2004-67, exceptions and other details, see
transaction. 2004-41 I.R.B. 600, at www.irs.gov/pub/ Regulations section 1.6011-4(b)(4) and
irs-irbs/irb04-41.pdf. Rev. Proc. 2007-20, 2007-7 I.R.B. 517,
Definitions which provides a list of exceptions for this
Confidential Transactions type of reportable transaction.
Transaction A confidential transaction is a transaction
A transaction includes all of the relevant that is offered to a taxpayer or related Loss Transactions
elements of the expected tax treatment of party (as described in section 267(b) or A loss transaction is a transaction that
an investment, entity, plan, or 707(b)) under conditions of confidentiality results in the taxpayer claiming a loss
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4. under section 165 (described later) if the Transactions of Interest letter ruling request satisfies the reporting
amount of the section 165 loss is as A transaction of interest is a transaction requirements. See Request for Ruling,
follows. that is the same as or substantially similar below, for more details on submitting a
• For individuals, at least $2 million in to one of the types of transactions that the letter ruling request.
any single tax year or $4 million in any IRS has identified by notice, regulation, or
combination of tax years. (At least Request for Ruling
other form of published guidance as a
$50,000 for a single tax year if the loss You may request a ruling from the IRS to
transaction of interest. It is a transaction
arose from a section 988 transaction determine whether a specific transaction
that the IRS and Treasury Department
defined in section 988(c)(1) (relating to is a reportable transaction. The potential
believe has a potential for tax avoidance
foreign currency transactions), whether or obligation of a material advisor and the
or evasion, but for which there is not
not the loss flows through from an S taxpayer to disclose the transaction will
enough information to determine if the
corporation or partnership). not be suspended during the period that
transaction should be identified as a tax
• For corporations (excluding S avoidance transaction. The requirement
the ruling request is pending. Therefore,
corporations), at least $10 million in any even if you have a ruling request with the
to disclose transactions of interest applies
single tax year or $20 million in any IRS, you must still complete and file this
to transactions of interest entered into
combination of tax years. form in order to avoid potential penalties.
after November 1, 2006. For existing
• For partnerships with only corporations guidance see Notice 2007-72, 2007- 36
See Rev. Proc. 2007-1, 2007-1 I.R.B. 1
(excluding S corporations) as partners for information on ruling requests.
I.R.B. 544 and Notice 2007-73, 2007-36
(looking through any partners that are I.R.B. 545. The IRS may issue new or When To File
also partnerships), at least $10 million in update the existing notice, regulation, or
any single tax year or $20 million in any The material advisor’s disclosure
other form of guidance that identifies a statement must be filed with the Office of
combination of tax years, whether or not transaction as a transaction of interest.
any losses flow through to one or more Tax Shelter Analysis (OTSA) by the last
partners. Eliminated Categories day of the month that follows the end of
• For all other partnerships and S Transactions With a Brief Asset
the calendar quarter in which the advisor
corporations, at least $2 million in any became a material advisor with respect to
Holding Period. The disclosure the reportable transaction or in which
single tax year or $4 million in any requirement for this category has been
combination of tax years, whether or not circumstances occur to require an
eliminated for transactions entered into on amended disclosure statement. See Date
any losses flow through to one or more or after August 3, 2007. However, this
partners or shareholders. you became a material advisor on page 2.
does not relieve taxpayers of any
• For trusts, at least $2 million in any disclosure obligations for brief asset Where To File
single tax year or $4 million in any holding transactions that were entered In order to file, mail your completed Form
combination of tax years, whether or not into before August 3, 2007. The rules for 8918 to:
any losses flow through to one or more brief asset holding period reportable
beneficiaries. (At least $50,000 for a transactions entered into before August 3, Internal Revenue Service
single tax year if the loss arose from a 2007, are contained in Regulations OTSA Mail Stop 4916
section 988 transaction defined in section section 1.6011-4 in effect prior to August 1973 North Rulon White Blvd.
988(c)(1) (relating to foreign currency 3, 2007. Ogden, Utah 84404
transactions), whether or not the loss Furnishing a Reportable
flows through from an S corporation or Transactions With a Significant
partnership). Book-Tax Difference. The disclosure Transaction Number
requirement for this category has been Receipt of a reportable transaction
Section 165 loss. For this purpose, a eliminated. Transactions with a significant number does not indicate that the IRS
section 165 loss is adjusted for any book-tax difference that would have been has reviewed, examined, or approved the
salvage value and for any other insurance required to be disclosed with returns due transaction.
compensation received. However, a on dates (including extensions) after
section 165 loss does not include Material advisors must provide the
January 5, 2006, are no longer reportable
offsetting gains, other income or reportable transaction number to all
transactions.
limitations. The full amount of a section taxpayers and material advisors for whom
However, this does not relieve the material advisor acts as a material
165 loss is included in the year it taxpayers of any disclosure obligations for
occurred, regardless of whether all or part advisor. The reportable transaction
significant book-tax difference number must be provided when the
of it is included in computing a net transactions that should have been
operating loss (under section 172) or a transaction is entered into, or, if the
disclosed on a return with a due date prior transaction is entered into before the
net capital loss (under section 1212) that to January 6, 2006. For more details, see
is a carryback or carryover to another material advisor received the reportable
Notice 2006-6, 2006-5 I.R.B. 385, and transaction number, within 60 calendar
year. A section 165 loss does not include Rev. Proc. 2004-67, 2004-50 I.R.B. 966.
any portion of a loss attributable to a days from the date the reportable
capital loss carryback or carryover from Exceptions to Reportable transaction number is mailed to the
another year that is treated as a deemed Transaction Categories, Published material advisor.
capital loss under section 1212. Guidance Requirement To Keep Lists
To determine if a transaction results in A transaction is not considered a Generally, a material advisor must
a taxpayer claiming a loss that meets the reportable transaction if the IRS makes a maintain a list identifying each entity or
threshold amounts over a combination of determination in published guidance that individual with respect to who the advisor
tax years, only losses claimed in the tax it is not subject to the reporting acted as a material advisor with respect
year the transaction is entered into and requirements. For more information, see to a reportable transaction. A material
the 5 succeeding tax years are combined. the following. advisor is not required to identify an entity
The types of losses included in this • Rev. Proc. 2007-20, 2007-7 I.R.B. 517; or individual on the list if the entity or
category are section 165 losses (including • Rev. Proc. 2004-66, 2004-50 I.R.B. individual entered into a listed transaction
amounts deductible under a provision that 966; or a transaction of interest more than 6
treats a transaction as a sale or other • Rev. Proc. 2004-67, 2004-50 I.R.B. years before the transaction was
disposition or otherwise results in a 967; and identified in published guidance as a
deduction under section 165). However, • Rev. Proc. 2004-68, 2004-50 I.R.B. listed transaction or a transaction of
this category does not include losses 969. interest.
described in Rev. Proc. 2004-66, 2004-50 The IRS may also determine by A separate list must be prepared and
I.R.B. 966 (or future published guidance). individual letter ruling that an individual maintained for each transaction or group
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5. of substantially similar transactions. The required to retain earlier drafts of a IRS to determine without undue delay or
list must be maintained for 7 years document if you retain a copy of the final difficulty the information required.
following the earlier of the date on which document (or, if there is no final
the material advisor last made a tax document, the most recent draft of the Other Penalties
statement relating to the transaction, or document) and the final document (or An additional civil penalty under section
the date the transaction was last entered most recent draft) contains all the 6700 may be imposed if you directly or
into, if known. Upon IRS’ written request, information in the earlier drafts of such indirectly organize, participate in the sale
each material advisor who is responsible document that is material to an of, or promote an abusive tax shelter and
for maintaining a list must furnish the list understanding of the purported tax you cause other parties to make or
to the IRS. The list must be maintained in treatment or the tax structure of the furnish either:
a form that enables the IRS to determine transaction. • False or fraudulent statements as to
without undue delay or difficulty the any material matter, or
information required to be maintained for Dissolution or liquidation of material • Gross valuation overstatements as to
each list. See Regulations section advisor. Generally, if a material advisor any material matter.
301.6112-1 for more information. dissolves or liquidates before completion
of the 7 year list maintenance period, the For false or fraudulent statement
Note. The IRS does not require you to violations, the penalty is 50 percent of the
person responsible under state law for
submit detailed information with this form gross income from the activity. For gross
winding up the entity’s affairs must
with respect to the requirement to keep valuation overstatement violations, the
prepare, maintain, and furnish each
lists. However, to assist you in penalty is the lesser of $1,000 or 100% of
component of the list on behalf of the
maintaining these lists, we anticipate that the gross income derived (or to be
entity, unless the entity submits the list to
an electronic worksheet will be provided derived) from the activity.
OTSA within 60 days after the dissolution
in the near future on www.irs.gov.
or liquidation. See Regulations section Penalties may also be imposed if you
Continue to monitor this website for future
301.6112-1(d) for more information. knowingly aid and abet in the
updates. You may need to keep
additional records for accounting or state Penalties understatement of the tax liability of
income tax purposes. another person. The penalty is $1,000
Penalty For Failure To Furnish ($10,000 for corporate tax returns and
Contents of the list. Each list must documents).
contain the following. Information Regarding Reportable
1. An itemized statement containing: Transactions Criminal penalties for failure to file on
A penalty may be imposed if you are time and for filing a false or fraudulent
a. The name of each reportable
required to file Form 8918 and you fail to return are provided by sections 7203,
transaction, the citation to the notice
file the return on or before the due date, 7206, and 7207.
number or published guidance number
identifying the transaction if the or file false or incomplete information
transaction is a listed transaction or about a reportable transaction. Specific Instructions
transaction of interest, and the reportable The penalty is $50,000 for reportable
transaction number obtained under transactions other than listed How To Complete Form 8918
section 6111; transactions. The penalty imposed for In order to be considered complete, Form
b. The name, address, and identifying listed transactions is the greater of: 8918 must be completed in its entirety
number of each individual or entity • $200,000, or with all required attachments. To be
required to be included on the list; • 50 percent of the gross income from considered complete, the information
c. The date on which each individual providing aid, assistance, or advice about provided on the form must describe the
or entity entered into the reportable the listed transaction before the date the expected tax treatment and all potential
transaction, if known; return is filed. If the failure is intentional, tax benefits expected to result from the
d. The amount invested in the the percentage is 75%. transaction, describe any tax result
reportable transaction by each individual For more information, see section protection with respect to the transaction,
or entity, if known; 6707. Form 8918 must be completed in and identify and describe the transaction
e. A summary or schedule of the tax its entirety with all required attachments in sufficient detail for the IRS to be able to
treatment that each individual or entity is to be considered complete. Stating that understand the tax structure of the
intended or expected to derive from “Information will be provided upon reportable transaction. A Form 8918
participation in the reportable transaction; request” or that “Details are available containing a statement that information
and upon request,” or any similar statement in will be provided upon request is not
f. The name of each other material the space provided, is not considered a considered a complete disclosure
advisor to the transaction, if known. description and may cause your statement.
2. A detailed description of the disclosure statement to be treated as If the information required exceeds the
reportable transaction that describes both incomplete. space provided, complete as much
the tax structure and the purported tax
Note. Rev. Proc. 2007-21, 2007-9 I.R.B. information as possible in the available
treatment.
613 provides guidance for requesting space and attach the remaining
3. A copy of any designation
rescission of certain penalty assessments information on additional sheets. The
agreement to which the material advisor
under sections 6707 or 6707A with additional sheets must be in the same
is a party. See Line 5 for more
respect to a nonlisted reportable order as the lines to which they
information.
transaction. correspond. You must also include your
4. Copies of any additional written
name and identifying number at the top of
materials, including tax analyses or Penalty For Failure To Maintain each additional sheet. Do not write “See
opinions, relating to each reportable Required Lists Attached” on the form and provide all the
transaction that are material to an
A penalty may be imposed if you are information on an attached statement.
understanding of the intended tax
treatment or tax structure of that required to maintain a list under section
6112(a) and you fail to make the list Material Advisor Identifying
transaction that the material advisor or
any related party or agent of the material available upon written request to the IRS. Information
advisor has shown or provided to any The penalty is $10,000 for each day of Individuals. If the material advisor is an
individual or entity (or to their the failure after the date the list is individual, enter the first name, middle
representatives, tax advisors, or agents) required to be made available. The initial (if any), and last name; the social
who acquired or may acquire an interest penalty may be assessed for failure to security number; the phone number, and
in the transaction. However, you are not maintain the list in a form that enables the the complete address.
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6. Entities. If the material advisor is an Line 2 Lines 7a and 7b
entity, enter the full name of the entity as Check the box(es) for all categories that Check the box(es) for all categories that
shown on its income tax return, the apply to the transaction being reported. apply to the transaction being reported.
employer identification number, and the The reportable transaction categories are Indicate the related parties that are
complete address. See Item A for contact described under What is a Reportable needed and how they are related.
information. Transaction? on page 2. Indicate the role of tax-exempt entities if
they are required for the transaction. In
Item A If the transaction is a listed addition, if a foreign entity is required,
Contact information. If the material ! transaction, you must check the
CAUTION listed transaction box in addition to
indicate how and why the foreign entity is
advisor is an entity, list the name of a used, along with what country is used if a
contact person along with a contact any others that apply. particular country is required for the
telephone number. If the material advisor Line 3 transaction. If you need more space,
is an individual, you may disregard this follow the instructions under How to
Identify the notice, revenue ruling,
line. Complete Form 8918 on page 4.
regulation (for example, Regulations
section 1.643(a)-8 or Notice 2003-81, Line 9
Item B 2003-51 I.R.B. 1 modified and
Protective disclosure. Indicate if you supplemented by Notice 2007-71, Identify the types of financial instruments
are filing on a protective basis by 2007-35 I.R.B. 472), announcement, or required by the transaction (loan, stocks,
checking the appropriate box. If you are other published guidance that identified bonds, notes, original issue discounts,
uncertain if a transaction must be the transaction as a listed transaction or domestic and foreign currency
disclosed, check the “Yes” box and transaction of interest. For listed agreements, swaps, futures, notional
disclose the transaction in accordance transactions, identify the guidance as principal contracts, options, input or risk
with these instructions. shown in Notice 2004-67, 2004-50 I.R.B. hedges, etc.). If you need more space,
967 or later IRS guidance. follow the instructions under How to
On line 6a, you must explain why you Complete Form 8918 on page 4.
are filing the disclosure on a protective Line 4
basis. Generally, the IRS will not treat Enter the latest of the following dates. Line 10
disclosure statements filed on a protective • The date you made a tax statement Check all the boxes that apply for the tax
basis any differently than other disclosure with regard to the transaction. benefits expected from the transaction. A
statements filed on Form 8918. An • The date you received or had an tax benefit includes deductions,
incomplete form containing a statement expectation that you would receive gross exclusions from gross income,
that information will be provided on income in excess of the threshold amount nonrecognition of gain, tax credits,
request is not a complete disclosure (defined on page 1). adjustments (or the absence of
statement. For a protective disclosure to • The date the transaction was entered adjustments) to the basis of property,
be effective, you must properly complete into by the taxpayer. status as an entity exempt from federal
Form 8918 and provide all required • The date the transaction became a income taxation, and any other tax
information. See How to Complete Form listed transaction or transaction of consequences that may reduce a
8918 on page 4 for more information. interest. taxpayer’s federal tax liability by affecting
The latest of these dates is the date you the amount, timing, character, or source
Item C became a material advisor. See Date you of any item of income, gain, expense, loss
Answer “Yes” if this is the original Form became a material advisor on page 2. or credit. Check the “Other” box for tax
8918 for this reportable transaction. If this benefits not specifically described by a
is an amendment to a previously filed Line 5 box and identify the tax benefit(s) in the
Form 8918 for the reportable transaction, If more than one material advisor is space provided. If you need more space,
answer “No” and enter the reportable required to disclose a reportable follow the instructions under How to
transaction number previously provided transaction under this section, the Complete Form 8918 on page 4.
for the reportable transaction by the IRS. material advisors may designate by
written agreement a single material Line 13
The reportable transaction number is a advisor to disclose the transaction. The
9-digit or 11-digit number and was Describe all of the relevant facts about
transaction must be disclosed by the last the reportable transaction including the
formerly known as a tax shelter day of the month following the end of the
registration number or registration following.
calendar quarter that includes the earliest
number. date on which a material advisor who is a 1. Tax benefits causing the
party to the agreement became a material transaction to be reportable.
Amended statement. An amended 2. Years affected by the transaction.
statement must be filed if information advisor to the transaction.
previously provided is no longer accurate, 3. Steps of the transaction including:
The designation of one material
if additional information that was not a. Agreements.
disclosed becomes available, or if there ! advisor to disclose the transaction
CAUTION does not relieve the other material b. Property transfers and acquisitions.
are material changes to the transaction. advisors of the obligation to disclose the c. Liability assumptions.
transaction to the IRS in accordance with d. Obligation fulfillment.
Line 1 these instructions, if the designated e. Sales.
Enter the name, if any, by which the material advisor fails to disclose the f. Entity formation or dissolution.
transaction is known or commonly transaction to the IRS in a timely manner.
referred to by either yourself or published g. Other relevant events. Other
guidance. If no name exists, provide a Line 6a relevant events may include but are not
short identifying description of this Provide a concise statement indicating limited to tax result protection. Tax result
transaction that distinguishes it from other your role as a material advisor to this protection includes insurance company
reportable transactions in which you have transaction. See Who is a Material and other third party products commonly
participated (or may participate in the Advisor? on page 1. If you are filing a described as tax result insurance.
future). Do not report more than one protective disclosure, you must explain 4. Nature of the transaction (cash,
transaction on this form unless the why you believe you are not a material loan, service, other).
transactions are the same or substantially advisor. If you need more space, follow 5. Purpose of each step in
similar. See Substantially Similar on page the instructions under How to Complete accomplishing the tax benefits and
2. Form 8918 on page 4. consequences.
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7. 6. Where and how each party to the consequence and its financial reporting, if If you need more space, follow the
transaction (entered on lines 7a, 7b, and known). instructions under How to Complete Form
8a and 8b) is used, including their roles. 8. How the financial instruments 8918 on page 4.
(entered on line 9) are used in the
7. The economic and business transaction.
reasons for the transaction and its 9. How the Internal Revenue Code
structure (describe market or business sections (entered on line 12) enable you
conditions creating the tax benefit or to obtain the tax treatment.
Privacy Act and Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws
of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws. We
may give the information to the Department of Justice and to other federal agencies, as provided by law. We may give it to cities,
states, the District of Columbia, and U.S. commonwealths or possessions to carry out their tax laws. We may also disclose this
information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal
law enforcement and intelligence agencies to combat terrorism. A penalty may be imposed if you are required to file this return and
fail to file by the due date or provide incomplete or false information.
Our authority to ask for information is section 6111 and its regulations, which require you to file a return or statement with us with
respect to any reportable transaction for which you are a material advisor. Your response is mandatory under these sections.
Section 6109 requires that you provide your identifying number on what you file. This is so we know who you are, and can process
your return and other papers. You must fill in all parts of the tax form that apply to you.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their
contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are
confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 hr., 07min.
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 hr., 29min.
Preparing, copying, assembling, and sending the form to the IRS . . . . . . . . . . . . . . . . . . . . 1 hr., 41min.
If you have comments concerning the accuracy of this time estimate or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Internal Revenue Service, Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6526, Washington, DC 20224. Do not send the form to this address. Instead,
see Where To File on page 3.
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