Form 8275 Example: Parts I–IV and How to File It

To fill out Form 8275, the Disclosure Statement, you identify the position you want to flag in the six-column grid in Part I, write a factual and legal explanation in Part II, add pass-through entity information in Part III if the item comes from a partnership, S corporation, estate, trust, or REMIC, and use Part IV to continue anything that overflows. The completed form gets attached to the return where the disclosed item appears.¹

The form itself is short. The work is in the detail. A vague entry is treated as no disclosure at all, so precision in each part is what actually buys you penalty protection under Internal Revenue Code Section 6662.²

Confirm You Have the Right Form

Form 8275 covers positions that lack substantial authority or that conflict with published IRS guidance other than Treasury Regulations, including Revenue Rulings, Revenue Procedures, and IRS Notices.³

If your position is contrary to a Treasury Regulation, you need Form 8275-R instead.⁴ Filing the wrong form undermines the disclosure. Check which category of authority your position actually contradicts before you start filling anything in.

You also don’t need Form 8275 for every borderline position. Each year the IRS publishes a revenue procedure listing specific items where reporting the information correctly on the standard forms and instructions is enough to count as adequate disclosure on its own. If your item is on that list and you’ve reported it as the revenue procedure describes, no separate disclosure statement is required. For everything else, Form 8275 is the vehicle.

Part I: Identify the Item

Part I is a grid with six columns. Each disclosed item takes one row. If you’re disclosing more than one position, use additional rows.¹

Column (a), Rule: the authority you’re relying on or contradicting, such as a Revenue Ruling number or Code section.
Column (b), Item or Group of Items: a short label for the position, for example “Goodwill Allocation in Asset Sale” or “Home Office Deduction.”
Column (c), Detailed Description: a brief factual description of the item.
Column (d), Form or Schedule: the return form or schedule where the item appears, such as Schedule C or Form 4562.
Column (e), Line No.: the specific line number on that form or schedule.
Column (f), Amount: the dollar amount of the item as reported.

Aim for precision an examiner can act on. Someone reading Part I should be able to flip straight to the line on your return where the disclosed position lives, match the dollar figure, and know which authority you’re pointing to before turning to your explanation.

Part II: Write the Explanation

Part II is the narrative, and its quality determines whether your disclosure counts as adequate.⁵ Two things belong here: the facts, and the law that ties those facts to your reporting.

Start with the facts. Set out who was involved, what the transaction or event was, when it occurred, and the amounts. An examiner reading this section should understand the full picture without pulling any other document.

Then connect the facts to legal authority. Cite the specific Internal Revenue Code section, Treasury Regulation, court case, or other authority supporting your treatment, and show the reasoning: why these facts, under this authority, produce the tax result you claimed. Writing “reasonable basis exists” accomplishes nothing on its own. If your position contradicts a Revenue Ruling or IRS Notice, explain why that guidance doesn’t apply to your situation or why you believe it’s incorrect as applied to your facts.

Some examples of what that looks like in practice:

For a deduction, spell out the nature of the expense, its business purpose, and the Code section authorizing the deduction.
For a timing issue, explain your method of accounting and why recognition in your chosen year is proper.
For an allocation, such as purchase price across acquired assets, describe your methodology and the authority that supports it.

Vague disclosures that leave the examiner guessing do not satisfy the adequate disclosure standard. The more specific you are, the stronger your protection.

Part III: Pass-Through Entity Information

Part III applies only if the disclosed item comes from a partnership, S corporation, estate, trust, or REMIC in which you hold an interest. Fill in the entity’s name, address, taxpayer identification number, tax year, and the IRS service center where the entity filed its return (or note that it was e-filed).³ Most of this information appears on the Schedule K-1 you received.

One boundary matters here. Part III is for disclosing your own position on a pass-through item. If you’re reporting a K-1 item inconsistently with how the entity reported it, that’s a different situation and requires Form 8082, not Form 8275.⁶ Partners and S corporation shareholders are generally required to report items consistently with the entity’s return unless they file Form 8082 to flag the inconsistency.

Part IV: Continuation

If your Part I entries or your Part II explanation runs out of space, use Part IV to continue. For anything with real complexity, this overflow space is almost always necessary. Label each continuation with the corresponding item number from Part I so the examiner can follow the thread from grid entry to full explanation.

Attach the Form to the Right Return

Attach Form 8275 to the return where the disclosed position appears. Individuals attach it to Form 1040, corporations to Form 1120, and partnerships to Form 1065. Pass-through items should be disclosed on the entity’s return, not the individual owner’s return, unless you’re disclosing your own treatment of an item the entity reported.⁷

You can also attach Form 8275 to an amended return. When you file a qualified amended return, meaning one filed before the IRS contacts you about an examination and before certain other triggering events, disclosure on that return can provide the same penalty protection as the original return.⁵ That window closes the moment the IRS initiates contact, so if you realize after filing that a disclosure was warranted, move quickly.

Failure to attach the form strips it of protection. A disclosure statement sitting in your desk drawer, or filed loose to the wrong IRS address, does not count as adequate disclosure.

Situations Where Filing Form 8275 Won’t Help

Some categories of penalty are outside what disclosure can reach, and completing the form correctly for one of these situations still leaves you exposed. Per the IRS instructions, Form 8275 does not provide protection against:⁷

Substantial understatements attributable to a tax shelter item.
Substantial or gross valuation misstatements under Chapter 1, including non-arm’s length transfer pricing.
Tax benefits from a transaction that lacks economic substance under Section 7701(o).
Substantial overstatements of pension liabilities.
Estate and gift tax valuation understatements.
Understatements attributable to undisclosed foreign financial assets.
Penalties for actually disregarding a regulation, as opposed to taking a contrary position disclosed on Form 8275-R.

If your situation falls into any of these buckets, a well-completed Form 8275 will not prevent the 20% accuracy-related penalty. The form is built for honest, debatable positions on genuinely ambiguous issues, and its protection stops at that line.

1
Internal Revenue Service. Form 8275 – Disclosure Statement
2
Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments
3
Internal Revenue Service. Instructions for Form 8275 – Disclosure Statement
4
Internal Revenue Service. About Form 8275-R, Regulation Disclosure Statement
5
eCFR. 26 CFR 1.6662-4 – Substantial Understatement of Income Tax
6
Internal Revenue Service. Instructions for Form 8082
7
Internal Revenue Service. Instructions for Form 8275 – Disclosure Statement