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Excise Tax on Structured
Form 8876 Settlement Factoring Transactions OMB No. 1545-1826
(Rev. December 2013)
Department of the Treasury ▶ Information about Form 8876 and its instructions is at www.irs.gov/form8876.
Internal Revenue Service

Date of receipt of structured settlement payment rights . . . . . . . . . . . . . . . . ▶
Name Identifying number
Please
Type Number, street, and room or suite no. (If a P.O. box, see instructions.)
or
Print City or town, state or province, country, and ZIP or foreign postal 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 any
Sign knowledge.
Here ▲ ▲
Signature Date Title (if any)
Print/Type preparer’s name Preparer's signature Date PTIN
Paid Check if
self-employed
Preparer
Use Only Firm’s name ▶ Firm's EIN ▶
Firm's address ▶ Phone no.
Section references are to the Internal • Established (a) by suit or agreement for the • The creation or perfection of a security
Revenue Code unless otherwise noted. periodic payment of damages excludable interest in structured settlement payment
from the gross income of the recipient under rights under a blanket security agreement
Future Developments section 104(a)(2) or (b) by agreement for the entered into with an insured depository
For the latest information about developments periodic payment of compensation under any institution in the absence of any action to
related to Form 8876 and its instructions, workers’ compensation law excludable from redirect the structured settlement payments
such as legislation enacted after they were the gross income of the recipient under to that institution (or agent or successor
published, go to www.irs.gov/form8876. section 104(a)(1); and thereof) or otherwise to enforce such blanket
• Under which the periodic payments are (a) security interest as against the structured
General Instructions of the character described in section 130(c)(2) settlement payment rights.
Purpose of Form (A) and (B) and (b) payable by a person who is • A subsequent transfer of structured
a party to the suit or agreement or to the settlement payment rights acquired in a
Use Form 8876 to report and pay the 40% workers’ compensation claim or by a person structured settlement factoring transaction.
excise tax imposed under section 5891 on the who has assumed the liability for such Structured settlement payment rights.
factoring discount of a structured settlement periodic payments under a qualified Structured settlement payment rights are
factoring transaction. File a separate Form assignment in accordance with section 130. rights to receive payments under a structured
8876 for each date on which you received
structured settlement payment rights in one Structured settlement factoring settlement.
or more structured settlement factoring transaction. A structured settlement Factoring discount. The factoring discount is
transactions. factoring transaction is a transfer of the difference between the total undiscounted
structured settlement payment rights amount of structured settlement payments
Definitions (including portions of structured settlement being acquired (line 1) and the total amount
payments) made for consideration by means paid by the acquirer to the person(s) from
Structured settlement. A structured of sale, assignment, pledge, or other form of whom the structured settlement payment
settlement is an arrangement: encumbrance or alienation for consideration. rights are acquired (line 2).
The following are not structured settlement
factoring transactions. Qualified order. A qualified order is a final
order, judgment, or decree that:

For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 33529K Form 8876 (Rev. 12-2013)

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Form 8876 (Rev. 12-2013) Page 2
• Finds that the transfer of structured Late payment of tax. Generally, the penalty Privacy Act and Paperwork Reduction Act
settlement payment rights does not for not paying tax when due is 1/2 of 1% of Notice. We ask for the information on this
contravene any federal or state statute or the the unpaid amount, up to a maximum of 25%, form to carry out the Internal Revenue laws of
order of any court or responsible for each month or part of a month the tax the United States. We need it to figure and
administrative authority, and is in the best remains unpaid. The penalty is imposed on collect the right amount of tax. If you do not
interest of the payee, taking into account the the net amount due. This penalty will not be file a return, do not provide the information we
welfare and support of the payee’s imposed if you have reasonable cause for not ask for, or provide fraudulent information, you
dependents; and paying on time. may be subject to penalties.
• Is issued under the authority of an Our legal right to ask for information is
applicable state statute by an applicable state Additional Information sections 6001, 6011, and 6012(a) and their
court, or by the responsible administrative For more details, see section 5891 and regulations, which require you to file a return
authority (if any) that has exclusive jurisdiction Regulations section 157.5891-1. or statement with us for any tax for which you
over the underlying action or proceeding that are liable. Your response is mandatory under
was resolved by means of the structured Specific Instructions these sections. Section 6109 requires you to
provide your identifying number. You must fill
settlement. Name and address. Enter the name shown in all parts of the form that apply to you.
Who Must File on your most recently filed federal income tax
return. If the Post Office does not deliver mail You are not required to provide the
Generally, you must file Form 8876 if you to the street address and you have a P.O. information requested on a form that is
acquire directly or indirectly structured box, show the box number instead of the subject to the Paperwork Reduction Act
settlement payment rights in a structured street address. unless the form displays a valid OMB control
settlement factoring transaction entered into number. Books or records relating to a form
after February 21, 2002. However, do not file Foreign Address. Follow the country's or its instructions must be retained as long as
Form 8876 if the transfer of structured practice for entering the postal code. In some their contents may become material in the
settlement payment rights was approved in countries the postal code may come before administration of any Internal Revenue law.
advance in a qualified order, as no excise tax the city or town name. Enter the full name of We ask for the information on this form to
is due. the country using uppercase letters in English. carry out the tax laws of the United States.
Identifying number. If you are an individual,
When To File enter your social security number. Other filers Generally, tax returns and return
File Form 8876 by the 90th day following the should enter their employer identification information are confidential, as required by
receipt of structured settlement payment number. section 6103. However, section 6103 allows
or requires the IRS to disclose or give the
rights in a structured settlement factoring Line 5. Tax paid with Form 7004.If you filed information shown on your tax return to
transaction. Form 7004 for the payment rights received on others as described there. For example, we
If you need more time, file Form 7004, the date shown on the top of this Form 8876, may disclose your tax information to the
Application for Automatic Extension of Time enter the amount of tax paid, if any, when you Department of Justice to enforce the tax laws,
To File Certain Business Income Tax, filed that extension application. both civil and criminal, and to cities, states,
Information, and Other Returns, by the due Line 6. Tax due. Make your check or money the District of Columbia, and U.S.
date of Form 8876. Form 7004 does not order payable to “United States Treasury.” commonwealths or possessions to administer
extend the time for payment of tax. Write your name, address, identifying number, their tax laws. We may also disclose this
Where To File and “Form 8876” on the check or money information to other countries under a tax
order. treaty, to federal and state agencies to
Send Form 8876 to the following address: enforce federal nontax criminal laws, or to
Line 7. Overpayment. The IRS will refund the federal law enforcement and intelligence
Internal Revenue Service Center amount on line 7 (to the extent you owe no agencies to combat terrorism.
Cincinnati, OH 45999 other taxes).
The time needed to complete and file this
Rounding Off to Whole Dollars Signature. For information on who must sign form will vary depending on individual
You can round off cents to whole dollars on Form 8876, see the instructions for the circumstances. The estimated average time is:
your return and schedules. If you do round to signature section of your federal income tax
whole dollars, you must round all amounts. To return. Recordkeeping . . . . 3 hr., 6 min.
round, drop amounts under 50 cents and Learning about the law
increase amounts from 50 to 99 cents to the Paid Preparer Use Only or the form . . . . . 1 hr., 12 min.
next dollar. For example, $1.39 becomes $1 A paid preparer must sign Form 8876 and Preparing, copying,
and $2.50 becomes $3. provide the information in the Paid Preparer assembling, and sending
If you have to add two or more amounts to Use Only section at the end of the form if the the form to the IRS . . . 1 hr., 17 min.
figure the amount to enter on a line, include preparer was paid to prepare the form and is If you have comments concerning the
cents when adding the amounts and round off not an employee of the filing entity. The accuracy of these time estimates or
only the total. preparer must give you a copy of the form in suggestions for making this form simpler, we
addition to the copy to be filed with the IRS.
Amended Return would be happy to hear from you. You can
To amend a previously filed Form 8876, file a If you are a paid preparer, enter your send your comments from www.irs.gov/
corrected Form 8876 and write “Amended” at Preparer Tax Identification Number (PTIN) in formspubs/. Click on “More Information” and
the top of the form. the space provided. If you work for a tax then on “Comment on Tax Forms and
preparation firm, you must also enter the Publications.” You can also write to:
Interest and Penalties firm's name, address, and EIN. However, you Internal Revenue Service
cannot use the PTIN of the tax preparation Tax Forms and Publications
Interest. Interest is charged on taxes not paid firm in place of your PTIN. 1111 Constitution Ave. NW
by the due date at a rate determined under IR-6526
section 6621. You can apply for a PTIN online or by filing Washington, DC 20224
Late filing of return. Generally, a penalty of Form W-12, IRS Paid Preparer Tax Do not send the tax form to this address.
5% a month or part of a month, up to a Identification Number (PTIN) Application and Instead, see Where To File, earlier.
maximum of 25%, is imposed on the net Renewal. For more information about applying
amount due if Form 8876 is not filed when for a PTIN online, visit the IRS website at
due. This penalty will not be imposed if you www.irs.gov/ptin.
have reasonable cause for not filing on time.
If you do, attach an explanation.

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