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.

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 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.

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.

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

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

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.

Generally, each material advisor (defined below) must prepare and maintain a list of certain persons to whom (or for whose benefit) the material advisor makes or provides a tax statement with respect to a transaction that is a potentially abusive tax shelter. A separate list must be maintained for each transaction or group of substantially similar transactions. The lists must be maintained for 7 years and, upon written request, must be furnished to the IRS within 20 days. See Regulations section 301.6112-1 for more information.

A tax shelter organizer, or other person responsible for registration or maintaining a list, may request a ruling from the IRS to determine whether a transaction must be registered as a confidential corporate tax shelter or is subject to the list keeping requirements. The request for ruling must be submitted to the IRS on or before the date registration is otherwise required. Send the request to Internal Revenue Service, Attn: CC:PA:LPD:DRU, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. However, if a private delivery service is used, send the request to Internal Revenue Service, Attn: CC:PA:LPD:DRU, Room 5336, 1111 Constitution Avenue, NW, Washington, DC 20224. See Rev. Proc. 2004-1, 2004-1 I.R.B. 1 or subsequent IRS guidance for more details. If the request fully discloses all relevant facts relating to the transaction, the potential obligation to register the transaction or to maintain the list is suspended during the period the ruling is pending. If the IRS determines that the transaction is a confidential corporate tax shelter subject to registration, the due date for registration is extended for sixty days from the date of the ruling or the date of the withdrawal of the ruling request. The requirement to make lists available for inspection is suspended for sixty days from the date of the ruling or the date of the withdrawal of the ruling request. However, if the transaction is found to be subject to the list keeping requirements, then the pending of the ruling request shall not affect the persons required to be on the list (even those who acquired interest during the pending of the ruling request). See Regulations sections 301.6111-2(b)(5) and 301.6112-1(i) for details.

If a tax shelter organizer is required to register a tax shelter under section 6111(c) and fails to do so when required, or files false or incomplete information, a penalty may be charged equal to the greater of $500 or 1% of the aggregate amount invested in the shelter. No penalty will be charged if the organizer has reasonable cause for failing to comply with the registration requirements.

If a confidential corporate tax shelter organizer required to register fails to do so when required, or files false or incomplete information, a penalty may be charged equal to the greater of $10,000 or 50% of the fees paid to all organizers before the date the shelter is registered. In the case of an intentional disregard of the requirement to register a confidential corporate tax shelter, the penalty is increased to 75% of the fees. No penalty will be charged if the organizer has reasonable cause for failing to comply with the registration requirements.

Any person who is required to furnish a tax shelter registration number to investors in the tax shelter and who fails to do so will be charged a penalty of $100 for each failure.

A person required to keep a list may be charged a penalty for each investor who is required to be on the list but is omitted. The penalty is $50 for each omission, limited to a maximum of $100,000 per year per shelter. No penalty will be charged if the omission was due to reasonable cause and not due to willful neglect.

An additional civil penalty is imposed against any person who directly or indirectly organizes, participates in the sale of, or promotes an abusive tax shelter. The penalty also applies to persons who cause other parties to make or furnish false or fraudulent statements or gross valuation overstatements that promote the abusive tax shelter. The penalty is equal to the lesser of $1,000 or 100% of the gross income derived (or to be derived) by that person from that activity.

Penalties are also imposed against persons who knowingly aid and abet in the understatement of the tax liability of another person. The penalty is $1,000 ($10,000 for corporate tax returns and documents).

Criminal penalties for failure to file on time and for filing a false or fraudulent return are provided by sections 7203, 7206, and 7207.

A registration number may not be issued if an incomplete application is filed. You must make an entry on Form 8264 whenever an item is applicable. If you need more space, attach a statement or use the Explanation of Items in Part V of the form. You may incorporate information contained in other documents. If you do, attach copies of the documents and specify the page number of the incorporated material. When dollar amounts are called for, use whole dollar amounts.

If a single Form 8264 is filed with respect to an aggregated confidential corporate tax shelter, an amended Form 8264 must be filed to reflect material changes and to include any additional or revised written materials presented in connection with an offer to participate in the shelter (see Regulations section 301.6111-2(e)(2) for details). Otherwise, amendments may be made to Form 8264 in certain cases. If there is any material change in facts occurring after the initial registration, you may, but are not required to, file an amended form. The following are examples of a material change in facts.

To amend Form 8264, enter in the space provided above Part I the tax shelter registration number previously issued to the tax shelter. If the tax shelter has not yet received the registration number, enter “Applied for” in the space. Complete the top portion of Part I above Item 1a, but only show in the remainder of Parts I through Part IV the information that has changed since the tax shelter was registered. In addition, you should include any other information that you did not know at the time the tax shelter was registered but have since learned. Complete the signature area on page 2. For further information, see A-45A of Temporary Regulations section 301.6111-1T.