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. Routine uses of this information include providing it to the Department of Justice for use in civil and criminal litigation, and to cities, states, and the District of Columbia for the administration of their tax laws. We may also provide this information to any investor in the determination of the investor's tax liability.

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	33 hr.
Learning about the law or the form	3 hr., 16 min.
Preparing, copying, assembling, and sending the form to the IRS	3 hr., 57 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we would be happy to hear from you. You can write to the Tax Forms Committee, Western Area Distribution Center, Rancho Cordova, CA 95743-0001. Do not send the form to this address. Instead, see Where To File on page 2.

Changes To Note

Confidential Corporate Tax Shelters. Organizers of confidential corporate tax shelters under Section 6111(d) in which interests are offered for sale after February 28, 2000, must file Form 8264. See What is a Tax Shelter? below, for the definition of confidential corporate tax shelters. Also, see Temporary Regulations section 301.6111-2T and Announcement 2000-12, 2000-12 I.R.B. 835 for more information.

Investor Lists. Organizers of a confidential corporate tax shelter must keep a list of investors for interests sold after February 28, 2000. Even if a potentially abusive tax shelter does not meet all the requirements for registration as a confidential corporate tax shelter, an investor list may be required. Also, for interests sold after February 28, 2000, an organizer of a tax shelter under section 6111(c) must include additional information in the list of investors. See Keeping Lists of Investors on page 3 for details.

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

General Instructions

Purpose of Form

Organizers of certain tax shelters, including confidential corporate tax shelters in which interests were offered after February 28, 2000, are required to file Form 8264 to register the tax shelters with the IRS. Organizers of tax shelters under section 6111(c) must complete Parts I, II, and III of Form 8264. Organizers of a confidential corporate tax shelter must complete Parts I and IV of Form 8264. If a confidential corporate tax shelter also meets the definition of a tax shelter under section 6111(c), the organizer must complete all parts of the form. Organizers filing a properly completed Form 8264 will receive a tax shelter registration number from the IRS. They must furnish the tax shelter registration number to investors in the tax shelter. Investors must report the tax shelter registration number on their tax returns using Form 8271, Investor Reporting of Tax Shelter Registration Number.

For purposes of the registration requirement for tax shelters under section 6111(c) and confidential corporate tax shelters, the term organizer includes any person who participates in the organization, management, or sale of the tax shelter. See Who Is Required To Register a Tax Shelter? on page 2. For purposes of this form, promoter as defined under section 6111 and the regulations will be referred to as organizer.

What Is a Tax Shelter?

Tax Shelters Under Section 6111(c)

An investment that meets the following two requirements is considered a tax shelter under section 6111(c) for registration purposes, regardless of whether it is marketed or customarily designated as a tax shelter.

1. The investment is one with respect to which a person could reasonably infer from representations made or to be made in connection with the offering for sale of an interest in the investment that the tax shelter ratio (defined on page 5) may be greater than 2 to 1 for any investor at the close of any of the first 5 years ending after the date on which the investment is offered for sale; and

2. The investment is one that is required to be registered under a Federal or state law regulating securities, or that is sold under an exemption from registration requiring the filing of a notice with a Federal or state agency regulating the offering or sale of securities, or that is a substantial investment (defined on page 4).

Confidential Corporate Tax Shelters

An investment that meets each of the following three requirements is considered a confidential corporate tax shelter under section 6111(d).

1.   A significant purpose of the structure of the investment is the avoidance or evasion of Federal income tax for a direct or indirect corporate participant. Avoidance or evasion of tax is considered a significant purpose if the investment consists of either of the following:

• Listed transactions. This category includes transactions that are the same as or substantially similar to one of the types of transactions that the IRS has determined to be a tax avoidance transaction identified by notice, regulation, or other form of published guidance as a listed transaction for purposes of section 6111. See Temporary Regulations section 301.6111-2T(b)(2). There may be subsequent guidance identifying additional tax avoidance transactions. For existing guidance see Notice 2001-51, 2001-34 I.R.B. 190.
• Other tax-structured transactions. Generally, this includes transactions (a) that are structured to produce Federal income tax benefits as an important part of the intended results of the transaction and (b) that the organizer or other persons responsible for registration reasonably expect to be presented to more than one potential participant in the same or substantially similar form. See Exception for confidential corporate tax shelters on page 2.

2.   The investment is offered to any potential participant under conditions of confidentiality. Generally, an offer is considered confidential if:

• An offeree's disclosure of the structure or tax aspects of the transaction is limited in any way by express or implied understanding or agreement (whether or not legally binding) with or for the benefit of the organizer or
• The organizer knows or has reason to know that the offeree's use or disclosure of information relating to the structure or tax aspect of the transaction is limited for the benefit of any person other than the offeree.

3.   Fees in excess of $100,000 (in the aggregate) may be received by organizers of the tax shelter and any person related to such person under sections 267 and 707. For this purpose, substantially similar transactions are treated as part of the same tax shelter and the fees from the transaction must be combined. The fees include all consideration such persons may receive, including contingent fees, equity interests, and fees for other transactions received as consideration for promoting the tax shelter.

See Temporary Regulations sections 301.6111-2T(b), (c), and (d) for details.

An investment may be a tax shelter under section 6111(c), a confidential corporate tax shelter, or both.

Who Is Required To Register a Tax Shelter?

Generally, tax shelters under section 6111(c) and confidential corporate tax shelters (under section 6111(d)) must be registered by a tax shelter organizer. If a principal organizer, defined on page 4, does not register the shelter by the day interests in the shelter are first offered for sale, any of the following persons may be treated as a tax shelter organizer.

• A person who participated in the organization of the shelter.
• A person who participates in the management of the shelter when it is not properly registered.
• A person who participates in the sale of the shelter at a time when that person knows, or has reason to know, that the shelter has not been properly registered.

Note:   If all organizers of a confidential corporate tax shelter are foreign persons, any person who discusses participation in the transaction may be required to register the tax shelter (see Temporary Regulations section 301.6111-2T(g)(2) for details).

A group of persons who may be treated as tax shelter organizers may enter into a written agreement designating one person to be responsible for registering the tax shelter. This designated organizer must have participated in the organization of the tax shelter and may not be a resident of a foreign country. Those who sign the agreement, other than the designated organizer, will not be subject to a penalty unless they know or have reason to know that the designated organizer has failed to register the tax shelter as required. In that case, a person, other than the designated organizer, will be subject to a penalty if he or she does not register the tax shelter as soon as practicable. For more detailed information concerning designation agreements and their consequences, see A-34 through A-39 of Temporary Regulations section 301.6111-1T.

If a tax shelter is not registered on time and there is no designation agreement, each person required to register the tax shelter will be subject to a penalty unless he or she has reasonable cause for failure to file a registration statement. For information about the applicable penalty and the circumstances in which a person required to register has reasonable cause for failure to register, see Penalties on page 4, and Temporary Regulations section 301.6707-1T, relating to penalties for failure to furnish information regarding tax shelters.

Exemptions From Registration

Exemptions for tax shelters under section 6111(c).    The following investments are not subject to tax shelter registration under section 6111(c). These exceptions do not apply to confidential corporate tax shelters.

1. Sales of residences primarily to persons who are expected to use the residences as their principal place of residence.
2. Sales or leases of tangible personal property (other than master sound recordings, motion picture or television films, videotapes, lithograph plates, or other property relating to a literary, musical, or artistic composition) by the manufacturer of the property (or a member of an affiliated group, within the meaning of section 1502, including the manufacturer) primarily to persons who are expected to use the property in their principal active trade or business.
3. Sales or leases of tangible personal property (other than collectibles, master sound recordings, motion picture or television films, videotapes, lithograph plates, or other property that includes or relates to a literary, musical, or artistic composition) by a person in the ordinary course of that person's trade or business will be exempt if the purchaser or lessee is reasonably expected to use the property either for a personal use or in the purchaser's or lessee's principal active trade or business.
4. Performance of services in connection with the recipient's principal active trade or business or for the recipient's personal use.

See A-24 and A-24A of Temporary Regulations section 301.6111-1T for additional information on investments exempt from registration as a section 6111(c) tax shelter.

Exception for confidential corporate tax shelters.    Generally, if the organizer of a confidential corporate tax shelter reasonably determines that there is no reasonable basis under Federal tax law for denial of any significant portion of the expected income tax benefits from the transaction, tax avoidance or evasion of taxes is not considered a significant purpose of the structure of the transaction and registration is not required. This exception does not apply to transactions that are the same as or substantially similar to listed transactions. See Temporary Regulations sections 301.6111-2T(b)(3) and (4) for details.

See Request for Ruling beginning on page 3.

Suspension of Registration Requirements for Projected Income Investments

Note: These rules apply only to section 6111(c) tax shelters.

The registration requirements may be suspended for a tax shelter if investors are told in a written statement made in good faith and based on reasonable economic and business assumptions that their investment is expected to produce net income and not to provide net tax benefits (a projected income investment). A tax shelter does not qualify for suspension if there is a projection (whether oral or written) of a net loss or other tax benefit (determined on a cumulative basis) in any of its first 5 years or if the tax shelter invests beyond an incidental amount in any interest in a collectible (as defined in section 408(m)(2)), a master sound recording, motion picture or television film, videotape, lithograph plate, copyright, or a literary, musical, or artistic composition.

The suspension ends if the tax shelter subsequently reduces the cumulative tax liability of an investor during the 5-year period. In that case, the tax shelter must be registered within 30 days after the end of the tax shelter's year in which the reduction is generated and before a Schedule K-1 or similar form is sent to the investor. Once the tax shelter is registered, registration numbers must be provided to investors.

For more detailed information concerning the suspension of the registration requirements as a section 6111(c) tax shelter for projected income investments, see A-57A through A-57J of Temporary Regulations section 301.6111-1T.

When To File

In general, file Form 8264 no later than the day on which an interest in the tax shelter is first offered for sale.

Where To File

File Form 8264 with the Internal Revenue Service Center, Ogden, Utah 84201.

Furnishing a Tax Shelter Registration Number

In general, any person who sells (or otherwise transfers) an interest in a tax shelter must furnish that tax shelter's registration number to each investor. For purposes of furnishing tax shelter registration numbers, the term investors includes both original purchasers of tax shelter interests and persons who acquire their interests from prior purchasers.

The registration number must be furnished to the investor at the time of sale or transfer of the interest. If the seller or transferor has not received the registration number at this time, a written statement must be given to the investor stating that the number has been applied for and will be furnished when available. It then must be given to the investor within 20 days after the seller or transferor receives it.

For information about furnishing the number, the required content of the written statement, and the required legend stating that the tax shelter has not been approved, etc., by the Internal Revenue Service, see A-51 through A-54 of Temporary Regulations section 301.6111-1T.

The registration number must be included on any return on which an investor claims any deduction, loss, credit, or other tax benefit, or reports any income relating to the tax shelter.

First | Next

Instructions Index | 2002 Tax Help Archives | Tax Help Archives | Home