Form 8275 is the IRS disclosure statement you attach to a return to flag an item or position that isn't otherwise adequately disclosed. If the position has at least a reasonable basis, disclosing it can protect you from the parts of the 20% accuracy-related penalty for disregarding rules and for a substantial understatement of income tax. It can't protect you from a negligence penalty, and positions that go against a regulation use Form 8275-R instead.
Everything below comes from the IRS Instructions for Form 8275 (Rev. October 2024), as of October 2026.
The penalty it's designed around
The accuracy-related penalty is 20% of the part of an underpayment caused by things like negligence or disregard of rules, a substantial understatement of income tax, or a substantial valuation misstatement. It rises to 40% for gross valuation misstatements in certain cases. Form 8275 is aimed at two slices of that: disregard of rules, and substantial understatement on items that aren't tax shelter items.
What disclosure can and can't protect
| Disclosure on Form 8275 can help with | Disclosure can't help with |
|---|---|
| Disregard of rules, if the position has a reasonable basis | Negligence |
| Substantial understatement of income tax on non-tax-shelter items | Disregard of regulations (that needs Form 8275-R and a good-faith challenge) |
| Certain preparer penalties for unreasonable positions | Substantial understatement on a tax shelter item |
| Substantial or gross valuation misstatements | |
| Tax benefits from a transaction lacking economic substance | |
| Undisclosed foreign financial asset understatements and inconsistent estate basis |
That right-hand column is the part people miss. A disclosure form isn't a general shield: if the problem is careless record-keeping or an inflated valuation, filing Form 8275 changes nothing.
The reasonable basis bar
Disclosure only works if the position has at least a reasonable basis. The instructions call that a relatively high standard, significantly higher than not frivolous or not patently improper. A position that's merely arguable doesn't meet it. A position reasonably based on the authorities listed in the regulations, weighed for relevance and persuasiveness, generally does.
Who files is wide: individuals, corporations, pass-through entities and tax return preparers can all use Form 8275, and a preparer can use it to disclose a position and protect against the preparer penalty for an unreasonable position.
Form 8275 or Form 8275-R
If you're taking a position contrary to a regulation, use Form 8275-R, the Regulation Disclosure Statement, instead. To avoid the disregard of regulations penalty, the position must also be a good-faith challenge to the regulation's validity. For a position contrary to another rule, such as a revenue ruling, Form 8275 is the right form.
When you don't need it
The IRS publishes a revenue procedure each year listing circumstances where an item reported on the return itself counts as adequate disclosure for the substantial understatement penalty and certain preparer penalties. If your item meets those requirements, you don't file Form 8275. The instructions give a charitable contribution deduction as an example of an item that can be adequately disclosed on the return.
What the disclosure must say
Part II needs the relevant facts: enough to tell the IRS the identity of the item, its amount, and the nature of the controversy or potential controversy, which can include the legal issues. The instructions are clear that attaching a document isn't enough: for example, attaching a copy of an acquisition agreement to disclose issues about the basis of acquired assets won't count as adequate disclosure.
- Part I: for each item, name the rule or position you're taking, identify the item, describe it fully, then give the form or schedule, the line and the amount. The instructions' example: if the item is entertainment expenses, column (c) lists what they were, such as theater tickets, catering and banquet hall rentals.
- Part II: the detailed facts and the nature of the controversy.
- Part III: for pass-through items, details of the entity. Line 4 asks where it filed its return: partners and S corporation shareholders can find that on their K-1, and if the entity e-filed, you enter 'e-file'.
- Part IV: extra space for Parts I and II, or continuation sheets with your name and identifying number.
How to file it
- Attach Form 8275 to your original return and keep a copy. You may be able to file it with an amended return in some cases.
- File a separate Form 8275 for items from each pass-through entity. The entity should disclose on its own return; if it doesn't, you as partner or shareholder can.
- File a separate form for each foreign entity, with the same reference ID number used on its information return, such as Form 5471.
- Disclose carryover and carryback items for the year they originated. You don't have to file another Form 8275 in later years when they're used.
The verdict
Use Form 8275 when you're taking a defensible position that the IRS might see differently and the return alone doesn't make it obvious. Describe the facts in plain words on the form itself, not in an attachment. If the issue is a mistake you've found since filing, an amended return on Form 1040-X is the fix, and a penalty you think you shouldn't have been charged is a job for Form 843, not a disclosure.
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Frequently asked questions
What is Form 8275 used for?
To disclose items or positions not otherwise adequately disclosed on a return, so you can avoid parts of the accuracy-related penalty and certain preparer penalties.
Does Form 8275 protect against a negligence penalty?
No. The instructions say the negligence part of the accuracy-related penalty can't be avoided by disclosure.
What's the difference between Form 8275 and Form 8275-R?
Form 8275-R is for positions contrary to a regulation, and they must also be a good-faith challenge to the regulation's validity. Form 8275 covers other positions.
What does reasonable basis mean for Form 8275?
A relatively high standard, significantly higher than not frivolous or not patently improper. A merely arguable position doesn't meet it.
Do I need a new Form 8275 every year for a carryover?
No. Disclose carryover and carryback items for the tax year they originated; you don't file another Form 8275 in the later years they're used.
Who can file Form 8275?
Individuals, corporations, pass-through entities and tax return preparers.
Can I just attach documents instead of filling in Form 8275?
No. The instructions say a disclosure won't be adequate unless the information is provided on Form 8275 itself.
