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Form 8876 Excise Tax on Structured (Rev. December 2008) Settlement Factoring Transactions OMB No. 1545-1826 Department of the Treasury � See instructions below. Internal Revenue Service Date of receipt of structured settlement payment rights � Name Identifying number Please Number, street, and room or suite no. (If a P.O. box, see instructions.) Type or Print City or town, state, and ZIP code 1 Total undiscounted amount of structured settlement payments being acquired 1 2 Total amount paid for the above structured settlement payment rights 2 3 Factoring discount. Subtract line 2 from line 1 3 4 Tax. Multiply line 3 by 40% (.40) 4 5 Less: Tax paid with Form 7004 5 6 Tax due. Subtract line 5 from line 4. If zero or less, enter -0- 6 7 Overpayment. If line 5 is greater than line 4, subtract line 4 from line 5 7 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has Sign any knowledge. Here � Signature Date � Title (if any) Paid Preparer’s Preparer’s signature � Date Check if self-employed Preparer’s SSN or PTIN � Firm’s name (or EIN Use Only yours if self-employed), address, and ZIP code Phone no. ( ) General Instructions 2. Under which the periodic payments 2. A subsequent transfer of structured are (a) of the character described in settlement payment rights acquired in a Section references are to the Internal section 130(c)(2)(A) and (B) and (b) payable structured settlement factoring transaction. Revenue Code unless otherwise noted. by a person who is a party to the suit or Structured settlement payment rights. agreement or to the workers’ Structured settlement payment rights are Purpose of Form compensation claim or by a person who rights to receive payments under a has assumed the liability for such periodic structured settlement. Use Form 8876 to report and pay the 40% payments under a qualified assignment in excise tax imposed under section 5891 on accordance with section 130. Factoring discount. The factoring the factoring discount of a structured discount is the difference between the total settlement factoring transaction. File a Structured settlement factoring undiscounted amount of structured separate Form 8876 for each date on transaction. A structured settlement settlement payments being acquired which you received structured settlement factoring transaction is a transfer of (line 1) and the total amount paid by the payment rights in one or more structured structured settlement payment rights acquirer to the person(s) from whom the settlement factoring transactions. (including portions of structured settlement structured settlement payment rights are payments) made for consideration by acquired (line 2). Definitions means of sale, assignment, pledge, or other form of encumbrance or alienation Qualified order. A qualified order is a final Structured settlement. A structured for consideration. order, judgment, or decree that: settlement is an arrangement: The following are not structured ● Finds that the transfer of structured 1. Established (a) by suit or agreement settlement factoring transactions. settlement payment rights does not for the periodic payment of damages contravene any federal or state statute or excludable from the gross income of the 1. The creation or perfection of a security interest in structured settlement the order of any court or responsible recipient under section 104(a)(2) or (b) by administrative authority, and is in the best agreement for the periodic payment of payment rights under a blanket security agreement entered into with an insured interest of the payee, taking into account compensation under any workers’ the welfare and support of the payee’s compensation law excludable from the depository institution in the absence of any action to redirect the structured settlement dependents and gross income of the recipient under section 104(a)(1) and payments to that institution (or agent or successor thereof) or otherwise to enforce such blanket security interest as against the structured settlement payment rights. For Privacy Act and Paperwork Reduction Act Notice, see page 2. Cat. No. 33529K Form 8876 (Rev. 12-2008) Form 8876 (Rev. 12-2008) Page 2 ● Is issued under the authority of an Late payment of tax. Generally, the You are not required to provide the applicable state statute by an applicable penalty for not paying tax when due is 1⁄ 2 information requested on a form that is state court, or by the responsible of 1% of the unpaid amount, up to a subject to the Paperwork Reduction Act administrative authority (if any) that has maximum of 25%, for each month or part unless the form displays a valid OMB exclusive jurisdiction over the underlying of a month the tax remains unpaid. The control number. Books or records relating action or proceeding that was resolved by penalty is imposed on the net amount due. to a form or its instructions must be means of the structured settlement. This penalty will not be imposed if you retained as long as their contents may have reasonable cause for not paying on become material in the administration of Who Must File time. any Internal Revenue law. We ask for the Generally, you must file Form 8876 if you information on this form to carry out the acquire directly or indirectly structured Additional Information tax laws of the United States. We need it settlement payment rights in a structured to figure and collect the right amount of For more details, see section 5891 and tax. If you do not file a return, do not settlement factoring transaction entered Regulations section 157.5891-1. into after February 21, 2002. However, do provide the information we ask for, or not file Form 8876 if the transfer of Specific Instructions provide fraudulent information, you may structured settlement payment rights was be charged penalties and be subject to approved in advance in a qualified order, Name and address. Enter the name criminal prosecution. as no excise tax is due. shown on your most recently filed federal Generally, tax returns and return income tax return. Include the suite, room, information are confidential, as required by When To File apartment, or other unit number after the section 6103. However, section 6103 street address. If the Post Office does not allows or requires the Internal Revenue File Form 8876 by the 90th day following deliver mail to the street address and the the receipt of structured settlement Service to disclose or give the information taxpayer has a P.O. box, show the box shown on your tax return to others as payment rights in a structured settlement number instead of the street address. factoring transaction. described in the Code. For example, we Identifying number. If you are an may disclose your tax information to the If you need more time, file Form 7004, individual, enter your social security Department of Justice to enforce the tax Application for Automatic Extension of number. Other filers should enter their laws, both civil and criminal, and to cities, Time To File Certain Business Income Tax, employer identification number. states, the District of Columbia, U.S. Information, and Other Returns, by the due commonwealths or possessions, and date of Form 8876. Form 7004 does not Line 5. Tax paid with Form 7004. If you certain foreign governments to carry out extend the time for payment of tax. filed Form 7004 for the payment rights their laws. We may also disclose this received on the date shown on the top of information to other countries under a tax Where To File this Form 8876, enter the amount of tax treaty, to federal and state agencies to paid, if any, when you filed that extension enforce federal nontax criminal laws, or to File Form 8876 with the Internal Revenue application. Service Center, Cincinnati, OH 45999. federal law enforcement and intelligence Line 6. Tax due. Make your check or agencies to combat terrorism. Rounding Off to Whole money order payable to “United States Please keep this notice with your Treasury.” Write your name, address, records. It may help you if we ask you for Dollars identifying number, and “Form 8876” on other information. If you have any You can round off cents to whole dollars the check or money order. questions about the rules for filing and on your return and schedules. If you do Line 7. Overpayment. The IRS will refund giving information, please call or visit any round to whole dollars, you must round all the amount on line 7 (to the extent you Internal Revenue Service office. amounts. To round, drop amounts under owe no other taxes). The time needed to complete and file 50 cents and increase amounts from 50 to this form will vary depending on individual 99 cents to the next dollar. For example, Signature. For information on who must circumstances. The estimated average $1.39 becomes $1 and $2.50 becomes $3. sign Form 8876, see the instructions for time is: the signature section of your federal If you have to add two or more amounts income tax return. Recordkeeping 3 hr., 6 min. to figure the amount to enter on a line, Learning about the law include cents when adding the amounts Privacy Act and Paperwork Reduction or the form 1 hr., 12 min. and round off only the total. Act Notice. These Acts require that when Preparing and sending we ask you for information we must first the form to the IRS 1 hr., 17 min. Amended Return tell you our legal right to ask for the information, why we are asking for it, and If you have comments concerning the To amend a previously filed Form 8876, accuracy of these time estimates or how it will be used. We must also tell you file a corrected Form 8876 and write suggestions for making this form simpler, what could happen if we do not receive it “Amended” at the top of the form. we would be happy to hear from you. You and whether your response is voluntary, required to obtain a benefit, or mandatory can write to the Internal Revenue Service, Interest and Penalties under the law. Tax Products Coordinating Committee, Interest. Interest is charged on taxes not SE:W:CAR:MP:T:T:SP, 1111 Constitution Our legal right to ask for information is Ave. NW, IR-6526, Washington, DC 20224. paid by the due date at a rate determined sections 6001, 6011, and 6012(a) and their under section 6621. Do not send the tax form to this address. regulations, which require you to file a Instead, see Where To File on this page. Late filing of return. Generally, a penalty return or statement with us for any tax for of 5% a month or part of a month, up to a which you are liable. Your response is maximum of 25%, is imposed on the net mandatory under these sections. Section amount due if Form 8876 is not filed when 6109 requires you to provide your due. This penalty will not be imposed if identifying number. This is so we know you have reasonable cause for not filing on who you are, and can process your return time. If you do, attach an explanation. and other papers. You must fill in all parts of the tax form that apply to you.
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