IRS Instruction 8038 – IRS Forms, Instructions, Pubs 2026

IRS Instruction 8038 – IRS Forms, Instructions, Pubs 2026 – Issuers of tax-exempt private activity bonds must file Form 8038 to report bond issues to the IRS and demonstrate compliance with Internal Revenue Code sections 141–150. The latest instructions (Revision September 2025) include updates for spaceport financing and other clarifications. This comprehensive guide explains who must file, deadlines, filing location, line-by-line details, and best practices—based directly on official IRS sources.

What Is Form 8038?

Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, is an information return filed by the issuer of certain tax-exempt private activity bonds issued after 1986. It supplies the IRS with required data under section 149 and helps monitor compliance with the private activity bond rules in sections 141–150.

Purpose: The form tracks bond details, uses of proceeds, financed property, refunded bonds, volume cap compliance, and other requirements to ensure the bonds qualify for tax-exempt status.

Note: This form is not used for governmental bonds (use Form 8038-G or 8038-GC) or for arbitrage rebate payments (use Form 8038-T).

Who Must File Form 8038?

A separate Form 8038 is required for each issue of the following tax-exempt private activity bonds issued after 1986:

  • Exempt facility bonds (including airports, spaceports, docks, sewage facilities, solid waste, qualified residential rental projects, etc.)
  • Qualified mortgage bonds
  • Qualified veterans’ mortgage bonds
  • Qualified small issue bonds
  • Qualified student loan bonds
  • Qualified redevelopment bonds
  • Qualified hospital bonds
  • Qualified 501(c)(3) bonds
  • Nongovernmental output property bonds
  • All other tax-exempt private activity bonds

Issuers include state and local governments or other authorized entities issuing these bonds.

When and Where to File?

Deadline: File by the 15th day of the second calendar month after the close of the calendar quarter in which the bond was issued (e.g., bonds issued in January–March are due May 15).

  • You cannot file before the issue date.
  • Complete the form using facts as of the issue date.

Late filing relief: If the late filing was not due to willful neglect, request relief under Rev. Proc. 2002-48 by writing “Request for Relief under section 3 of Rev. Proc. 2002-48” at the top of the form and attaching an explanation letter (include whether the issue is under IRS examination).

Mailing address:

  • Department of the Treasury
    Internal Revenue Service Center
    Ogden, UT 84201

Private delivery services (PDS) may be used for timely filing—check the current list at IRS.gov/PDS. PDS cannot deliver to P.O. boxes.

Recent Updates (Rev. September 2025)

  • Spaceport bonds (added by P.L. 119-21) are now reported on Line 11q (Other). Write “Spaceport” in the description box and enter the issue price. Airport bonds remain on Line 11a.
  • Minor clarifications on percentage tests, volume cap exceptions, and reporting for certain exempt facilities.

Always check IRS.gov/Form8038 for the latest developments.

Step-by-Step Guide to Completing Form 8038

Part I – Reporting Authority

  • Line 1: Issuer’s legal name
  • Line 2: Employer Identification Number (EIN)
  • Lines 3–6: Contact person (must be an individual, not an issuer employee) and address
  • Line 7: Date of issue
  • Line 8: Issue name or description
  • Line 9: CUSIP number (or “None”)
  • Line 10: Officer or representative for IRS questions

Part II – Type of Issue

Enter the issue price in the appropriate box and check any required boxes:

  • Line 11a: Airport (spaceports go on 11q)
  • Line 11f: Qualified residential rental project (check percentage test or deep rent skewing election)
  • Line 11i / 11j: Enterprise zone / empowerment zone facility bonds
  • Line 11q: Other (including spaceports—write “Spaceport”)
  • Line 14: Qualified small issue bonds ≤ $10 million with election
  • Line 17–18: 501(c)(3) organizations and hospital/non-hospital limits
  • Line 19: Nongovernmental output property
  • Line 20b: Reissuance of prior bonds

Part III – Description of Bonds

Provide maturity date, issue price, stated redemption price at maturity, weighted average maturity, and yield (to four decimal places or “VR” for variable rate).

Part IV – Uses of Proceeds

Detail allocations for:

  • Issuance costs
  • Credit enhancement
  • Capitalized interest
  • Refunded bonds (tax-exempt or taxable)
  • Other uses

Part V – Description of Property Financed

  • Line 31: Non-refunding proceeds used for real or depreciable property
  • Line 32: NAICS code and amount for each major project (attach schedule if needed)

Important restrictions: Limits on land acquisition, used property, and farmland under section 147.

Part VI – Description of Refunded Bonds (if applicable)

Details on the refunded issues, remaining maturity, and call date.

Part VII – Miscellaneous

  • Public approval (section 147(f))
  • Construction issue with 1½% penalty election in lieu of rebate
  • Hedges and guaranteed investment contracts (GICs)
  • Written remedial action and monitoring procedures
  • Reimbursement of pre-issuance expenditures
  • Primary private user (for certain facility types)

Part VIII – Volume Cap

  • Allocation of volume cap (attach certification)
  • Amount subject to unified state volume cap
  • Carryforward election (attach Form 8328 if applicable)
  • Exemptions and transitional rules

Key Definitions (from the Instructions)

  • Issue price: Generally the first price at which a substantial amount of the bonds are sold to the public (Reg. §1.148-1(f)).
  • Private activity bond: Meets the private business use test or private security/payment test (section 141).
  • Exempt facility bond: 95% or more of net proceeds finance a facility listed in section 142(a).

Tips for Accurate Filing and Common Pitfalls

  • Use whole-dollar rounding (drop <50¢, round up ≥50¢).
  • Attach required schedules (e.g., 501(c)(3) organizations, multiple projects, volume cap certification).
  • Do not attach trust indentures or full bond documents.
  • For amended returns: Check the box and attach a full explanation.
  • Maintain written procedures for remedial actions and arbitrage monitoring (Lines 43–44).

Electronic filing: While paper filing is still accepted for Form 8038, many related forms (e.g., 8038-CP) now require e-filing. Check IRS e-file options for future updates.

  • Form 8038-G / 8038-GC → Governmental bonds
  • Form 8038-T → Arbitrage rebate
  • Form 8328 → Carryforward of unused volume cap
  • Publication 4077 → Tax-Exempt Bonds for 501(c)(3) Organizations
  • Publication 4078 → Tax-Exempt Private Activity Bonds Compliance Guide

Download the Official Documents (2025)

Frequently Asked Questions (FAQs)

  1. Can I file Form 8038 electronically?
    Paper filing is the standard method; check IRS.gov for any future e-file mandates.
  2. What if the bond issue is a reissuance?
    Report on Line 20b and describe the original issue.
  3. Are spaceport bonds treated differently?
    Yes—report the issue price on Line 11q and write “Spaceport” in the description box.
  4. What is the volume cap?
    Most private activity bonds are subject to a state volume cap under section 146. Carryforwards are reported on Form 8328.

Stay Compliant – Consult a Professional

Bond compliance is complex and errors can jeopardize tax-exempt status. Issuers should work with qualified bond counsel and review the full instructions carefully.

For the most current information, always visit the official IRS page: IRS.gov/Form8038 or the Form 8038 Corner at IRS.gov/tax-exempt-bonds.

Last updated: Based on IRS materials revised September 2025 and reviewed in 2026. Tax rules can change—verify the latest version before filing.

This guide is for informational purposes only and is not a substitute for the official IRS instructions or professional tax advice.