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2005 Tax Filing

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2005 Tax Filing

2005 tax filing Publication 926 - Main Content Table of Contents Do You Have a Household Employee? Can Your Employee Legally Work in the United States? Do You Need To Pay Employment Taxes?Social Security and Medicare Taxes Federal Unemployment (FUTA) Tax Do You Need To Withhold Federal Income Tax? What Do You Need To Know About the Earned Income Credit? How Do You Make Tax Payments? What Forms Must You File?Employee who leaves during the year. 2005 tax filing Filing options when no return is required. 2005 tax filing What Records Must You Keep? Can You Claim a Credit for Child and Dependent Care Expenses? How Can You Correct Schedule H?Adjust the overpayment. 2005 tax filing Claim for refund process. 2005 tax filing How To Get Tax HelpLow Income Taxpayer Clinics Do You Have a Household Employee? You have a household employee if you hired someone to do household work and that worker is your employee. 2005 tax filing The worker is your employee if you can control not only what work is done, but how it is done. 2005 tax filing If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. 2005 tax filing It also does not matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job. 2005 tax filing Example. 2005 tax filing You pay Betty Shore to babysit your child and do light housework 4 days a week in your home. 2005 tax filing Betty follows your specific instructions about household and child care duties. 2005 tax filing You provide the household equipment and supplies that Betty needs to do her work. 2005 tax filing Betty is your household employee. 2005 tax filing Household work. 2005 tax filing   Household work is work done in or around your home. 2005 tax filing Some examples of workers who do household work are: Babysitters, Caretakers, House cleaning workers, Domestic workers, Drivers, Health aides, Housekeepers, Maids, Nannies, Private nurses, and Yard workers. 2005 tax filing Workers who are not your employees. 2005 tax filing   If only the worker can control how the work is done, the worker is not your employee but is self-employed. 2005 tax filing A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business. 2005 tax filing   A worker who performs child care services for you in his or her home generally is not your employee. 2005 tax filing   If an agency provides the worker and controls what work is done and how it is done, the worker is not your employee. 2005 tax filing Example. 2005 tax filing You made an agreement with John Peters to care for your lawn. 2005 tax filing John runs a lawn care business and offers his services to the general public. 2005 tax filing He provides his own tools and supplies, and he hires and pays any helpers he needs. 2005 tax filing Neither John nor his helpers are your household employees. 2005 tax filing More information. 2005 tax filing   More information about who is an employee is in Publication 15-A, Employer's Supplemental Tax Guide. 2005 tax filing Can Your Employee Legally Work in the United States? It is unlawful for you knowingly to hire or continue to employ an alien who cannot legally work in the United States. 2005 tax filing When you hire a household employee to work for you on a regular basis, you and the employee must complete the U. 2005 tax filing S. 2005 tax filing Citizenship and Immigration Services (USCIS) Form I-9, Employment Eligibility Verification. 2005 tax filing No later than the first day of work, the employee must complete the employee section of the form by providing certain required information and attesting to his or her current work eligibility status in the United States. 2005 tax filing You must complete the employer section by examining documents presented by the employee as evidence of his or her identity and employment eligibility. 2005 tax filing Acceptable documents to establish identity and employment eligibility are listed on Form I-9. 2005 tax filing You should keep the completed Form I-9 in your own records. 2005 tax filing Do not submit it to the IRS, the USCIS, or any other government or other entity. 2005 tax filing The form must be kept available for review upon notice by an authorized U. 2005 tax filing S. 2005 tax filing Government official. 2005 tax filing Two copies of Form I-9 are contained in the Handbook for Employers (Form M-274) published by the USCIS. 2005 tax filing Call the USCIS at 1-800-870-3676 to order the Handbook for Employers; or you may download the handbook at www. 2005 tax filing uscis. 2005 tax filing gov. 2005 tax filing If you have questions about the employment eligibility verification process or other immigration-related employment matters, contact the USCIS Office of Business Liaison at 1-800-357-2099. 2005 tax filing You also can visit the USCIS website at www. 2005 tax filing uscis. 2005 tax filing gov to get Form I-9. 2005 tax filing For more information, see Employee's Social Security Number (SSN) in Publication 15 (Circular E), Employer's Tax Guide. 2005 tax filing Do You Need To Pay Employment Taxes? If you have a household employee, you may need to withhold and pay social security and Medicare taxes, pay federal unemployment tax, or both. 2005 tax filing To find out, read Table 1. 2005 tax filing You do not need to withhold federal income tax from your household employee's wages. 2005 tax filing But if your employee asks you to withhold it, you can. 2005 tax filing See Do You Need To Withhold Federal Income Tax, later. 2005 tax filing If you need to pay social security, Medicare, or federal unemployment tax or choose to withhold federal income tax, read Table 2 for an overview of what you may need to do. 2005 tax filing If you do not need to pay social security, Medicare, or federal unemployment tax and do not choose to withhold federal income tax, read State employment taxes, next. 2005 tax filing The rest of this publication does not apply to you. 2005 tax filing State employment taxes. 2005 tax filing   You should contact your state unemployment tax agency to find out whether you need to pay state unemployment tax for your household employee. 2005 tax filing For a list of state unemployment tax agencies, visit the U. 2005 tax filing S. 2005 tax filing Department of Labor's website at www. 2005 tax filing workforcesecurity. 2005 tax filing doleta. 2005 tax filing gov/unemploy/agencies. 2005 tax filing asp. 2005 tax filing You should also determine if you need to pay or collect other state employment taxes or carry workers' compensation insurance. 2005 tax filing    Table 1. 2005 tax filing Do You Need To Pay Employment Taxes? IF you . 2005 tax filing . 2005 tax filing . 2005 tax filing THEN you need to . 2005 tax filing . 2005 tax filing . 2005 tax filing A– Pay cash wages of $1,900 or more in 2014 to any one household employee. 2005 tax filing Withhold and pay social security and Medicare taxes. 2005 tax filing The taxes are 15. 2005 tax filing 3%1 of cash wages. 2005 tax filing Your employee's share is 7. 2005 tax filing 65%1. 2005 tax filing   (You can choose to pay it yourself and not withhold it. 2005 tax filing ) Your share is 7. 2005 tax filing 65%. 2005 tax filing   Do not count wages you pay to— Your spouse, Your child under the age of 21, Your parent (see Wages not counted, later, for an exception), or Any employee under the age of 18 at any time in 2014 (see Wages not counted, later, for an exception). 2005 tax filing B– Pay total cash wages of $1,000 or more in any calendar quarter of 2013 or 2014 to household employees. 2005 tax filing Pay federal unemployment tax. 2005 tax filing The tax is 6% of cash wages. 2005 tax filing Wages over $7,000 a year per employee are not taxed. 2005 tax filing You also may owe state unemployment tax. 2005 tax filing   Do not count wages you pay to— Your spouse, Your child under the age of 21, or Your parent. 2005 tax filing 1In addition to withholding Medicare tax at 1. 2005 tax filing 45%, you must withhold a 0. 2005 tax filing 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2005 tax filing You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 2005 tax filing Additional Medicare Tax is only imposed on the employee. 2005 tax filing There is no employer share of Additional Medicare Tax. 2005 tax filing All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 2005 tax filing Note. 2005 tax filing If neither A nor B above applies, you do not need to pay any federal employment taxes. 2005 tax filing But you may still need to pay state employment taxes. 2005 tax filing Table 2. 2005 tax filing Household Employer's Checklist You may need to do the following things when you have a household employee. 2005 tax filing   When you hire a household employee: □ Find out if the person can legally work in the United States. 2005 tax filing  □ Find out if you need to pay state taxes. 2005 tax filing When you pay your household employee: □ Withhold social security and Medicare taxes. 2005 tax filing  □ Withhold federal income tax. 2005 tax filing  □ Decide how you will make tax payments. 2005 tax filing  □ Keep records. 2005 tax filing By February 2, 2015: □ Get an employer identification number (EIN). 2005 tax filing  □ Give your employee Copies B, C, and 2 of Form W-2, Wage and Tax Statement. 2005 tax filing By March 2, 2015 (March 31, 2015, if you file Form W-2 electronically): □ Send Copy A of Form W-2 to the Social Security Administration (SSA). 2005 tax filing By April 15, 2015: □ File Schedule H (Form 1040), Household Employment Taxes, with your 2014 federal income tax return (Form 1040, 1040NR, 1040-SS, or Form 1041). 2005 tax filing  If you do not have to file a return, file Schedule H by itself. 2005 tax filing Social Security and Medicare Taxes The social security tax pays for old-age, survivors, and disability benefits for workers and their families. 2005 tax filing The Medicare tax pays for hospital insurance. 2005 tax filing Both you and your household employee may owe social security and Medicare taxes. 2005 tax filing Your share is 7. 2005 tax filing 65% (6. 2005 tax filing 2% for social security tax and 1. 2005 tax filing 45% for Medicare tax) of the employee's social security and Medicare wages. 2005 tax filing Your employee's share is also 7. 2005 tax filing 65% (6. 2005 tax filing 2% for social security tax and 1. 2005 tax filing 45% for Medicare tax). 2005 tax filing In addition to withholding Medicare tax at 1. 2005 tax filing 45%, you must withhold a 0. 2005 tax filing 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2005 tax filing You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 2005 tax filing Additional Medicare Tax is only imposed on the employee. 2005 tax filing There is no employer share of Additional Medicare Tax. 2005 tax filing All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 2005 tax filing For more information on Additional Medicare Tax, visit IRS. 2005 tax filing gov and enter “Additional Medicare Tax” in the search box. 2005 tax filing Generally, you can use Table 3 to figure the amount of social security and Medicare taxes to withhold from each wage payment. 2005 tax filing You are responsible for payment of your employee's share of the taxes as well as your own. 2005 tax filing You can either withhold your employee's share from the employee's wages or pay it from your own funds. 2005 tax filing If you decide to pay the employee's share from your own funds, see Not withholding the employee's share, later. 2005 tax filing Pay the taxes as discussed under How Do You Make Tax Payments, later. 2005 tax filing Also, see What Forms Must You File, later. 2005 tax filing Social security and Medicare wages. 2005 tax filing   You figure social security and Medicare taxes on the social security and Medicare wages you pay your employee. 2005 tax filing   If you pay your household employee cash wages of $1,900 or more in 2014, all cash wages you pay to that employee in 2014 (regardless of when the wages were earned) up to $117,000 are social security wages and all cash wages are Medicare wages. 2005 tax filing However, any noncash wages you pay do not count as social security and Medicare wages. 2005 tax filing   If you pay the employee less than $1,900 in cash wages in 2014, none of the wages you pay the employee are social security or Medicare wages and neither you nor your employee will owe social security or Medicare tax on those wages. 2005 tax filing Cash wages. 2005 tax filing   Cash wages include wages you pay by check, money order, etc. 2005 tax filing Cash wages do not include the value of food, lodging, clothing, and other noncash items you give your household employee. 2005 tax filing However, cash you give your employee in place of these items is included in cash wages. 2005 tax filing State disability payments treated as wages. 2005 tax filing   Certain state disability plan payments that your household employee may receive are treated as social security and Medicare wages. 2005 tax filing For more information about these payments, see the Instructions for Schedule H (Form 1040) and the notice issued by the state. 2005 tax filing Wages not counted. 2005 tax filing   Do not count wages you pay to any of the following individuals as social security or Medicare wages, even if these wages are $1,900 or more during the year. 2005 tax filing Your spouse. 2005 tax filing Your child who is under the age of 21. 2005 tax filing Your parent. 2005 tax filing Exception: Count these wages if both the following conditions apply. 2005 tax filing Your parent cares for your child who is either of the following. 2005 tax filing Under the age of 18, or Has a physical or mental condition that requires the personal care of an adult for at least 4 continuous weeks in the calendar quarter services were performed. 2005 tax filing Your marital status is one of the following. 2005 tax filing You are divorced and have not remarried, You are a widow or widower, or You are living with a spouse whose physical or mental condition prevents him or her from caring for your child for at least 4 continuous weeks in the calendar quarter services were performed. 2005 tax filing An employee who is under the age of 18 at any time during the year. 2005 tax filing Exception: Count these wages if providing household services is the employee's principal occupation. 2005 tax filing If the employee is a student, providing household services is not considered to be his or her principal occupation. 2005 tax filing Also, if your employee's cash wages reach $117,000 (maximum wages subject to social security tax) in 2014, do not count any wages you pay that employee during the rest of the year as social security wages to figure social security tax. 2005 tax filing Continue to count the employee's cash wages as Medicare wages to figure Medicare tax. 2005 tax filing If you provide your employee transit passes to commute to your home, do not count the value of the transit passes (up to $130 per month for 2014) as wages. 2005 tax filing A transit pass includes any pass, token, fare card, voucher, or similar item entitling a person to ride on mass transit, such as a bus or train. 2005 tax filing If you provide your employee parking at or near your home or at or near a location from which your employee commutes to your home, do not count the value of parking (up to $250 per month for 2014) as wages. 2005 tax filing If you reimburse your employee for transit passes or parking, you may be able to exclude the reimbursement amounts. 2005 tax filing See Publication 15-B, Employer's Tax Guide to Fringe Benefits, for special requirements for this exclusion. 2005 tax filing Withholding the employee's share. 2005 tax filing   You should withhold the employee's share of social security and Medicare taxes if you expect to pay your household employee cash wages of $1,900 or more in 2014. 2005 tax filing However, if you prefer to pay the employee's share yourself, see Not withholding the employee's share, later. 2005 tax filing   You can withhold the employee's share of the taxes even if you are not sure your employee's cash wages will be $1,900 or more in 2014. 2005 tax filing If you withhold the taxes but then actually pay the employee less than $1,900 in cash wages for the year, you should repay the employee. 2005 tax filing   Withhold 7. 2005 tax filing 65% (6. 2005 tax filing 2% for social security tax and 1. 2005 tax filing 45% for Medicare tax) from each payment of social security and Medicare wages. 2005 tax filing Generally, you can use Table 3 to figure the proper amount to withhold. 2005 tax filing You will pay the amount withheld to the IRS with your share of the taxes. 2005 tax filing Do not withhold any social security tax after your employee's social security wages for the year reach $117,000. 2005 tax filing Table 3. 2005 tax filing Employee Social Security (6. 2005 tax filing 2%) and Medicare (1. 2005 tax filing 45%1) Tax Withholding Table (See Publication 15 (Circular E) for income tax withholding tables. 2005 tax filing ) Use this table to figure the amount of social security and Medicare taxes to withhold from each wage payment. 2005 tax filing For example, on a wage payment of $180, the employee social security tax is $11. 2005 tax filing 16 ($6. 2005 tax filing 20 tax on $100 plus $4. 2005 tax filing 96 on $80 wages). 2005 tax filing The employee Medicare tax is $2. 2005 tax filing 61 ($1. 2005 tax filing 45 tax on $100 plus $1. 2005 tax filing 16 on $80 wages). 2005 tax filing If wage payment is: The social security tax to be withheld is: The Medicare tax to be withheld is: If wage payment is: The social security tax to be withheld is: The Medicare tax to be withheld is: $ 1. 2005 tax filing 00 . 2005 tax filing $ . 2005 tax filing 06 $ . 2005 tax filing 01 $ 51. 2005 tax filing 00 . 2005 tax filing $ 3. 2005 tax filing 16 $ . 2005 tax filing 74 2. 2005 tax filing 00 . 2005 tax filing . 2005 tax filing 12 . 2005 tax filing 03 52. 2005 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filing 00 . 2005 tax filing 3. 2005 tax filing 10 . 2005 tax filing 73 100. 2005 tax filing 00 . 2005 tax filing 6. 2005 tax filing 20 1. 2005 tax filing 45 1In addition to withholding Medicare tax at 1. 2005 tax filing 45%, you must withhold a 0. 2005 tax filing 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2005 tax filing You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 2005 tax filing Additional Medicare Tax is only imposed on the employee. 2005 tax filing There is no employer share of Additional Medicare Tax. 2005 tax filing All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 2005 tax filing   If you make an error by withholding too little, you should withhold additional taxes from a later payment. 2005 tax filing If you withhold too much, you should repay the employee. 2005 tax filing    In addition to withholding Medicare tax at 1. 2005 tax filing 45%, you must withhold a 0. 2005 tax filing 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. 2005 tax filing You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. 2005 tax filing Additional Medicare Tax is only imposed on the employee. 2005 tax filing There is no employer share of Additional Medicare Tax. 2005 tax filing All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. 2005 tax filing For more information on Additional Medicare Tax, visit IRS. 2005 tax filing gov and enter “Additional Medicare Tax” in the search box. 2005 tax filing Example. 2005 tax filing On February 13, 2014, Mary Brown hired Jane R. 2005 tax filing Oak (who is an unrelated individual over age 18) to care for her child and agreed to pay cash wages of $50 every Friday. 2005 tax filing Jane worked for the remainder of the year (a total of 46 weeks). 2005 tax filing Mary did not give Jane a Form W-4 to request federal or state tax withholding. 2005 tax filing The following is the information Mary will need to complete Schedule H, Form W-2, and Form W-3. 2005 tax filing See the completed examples of Form W-2 and Form W-3 for 2014 at the end of this publication. 2005 tax filing Total cash wages paid to Jane $2,300. 2005 tax filing 00 ($50 x 46 weeks)       Jane's share of:     Social security tax $142. 2005 tax filing 60 ($2,300 x 6. 2005 tax filing 2% (. 2005 tax filing 062))         Medicare tax $33. 2005 tax filing 35       ($2,300 x 1. 2005 tax filing 45% (. 2005 tax filing 0145)) Mary's share of:     Social security tax $142. 2005 tax filing 60  ($2,300 x 6. 2005 tax filing 2% (. 2005 tax filing 062))           Medicare tax $33. 2005 tax filing 35  ($2,300 x 1. 2005 tax filing 45% (. 2005 tax filing 0145)) Amount reported on Form W-2 and Form W-3:   Box 1:Wages, tips $2,300. 2005 tax filing 00   Box 4: Social security tax withheld 142. 2005 tax filing 60   Box 6: Medicare tax withheld 33. 2005 tax filing 35 For information on withholding and reporting federal income taxes, see Publication 15 (Circular E). 2005 tax filing Not withholding the employee's share. 2005 tax filing   If you prefer to pay your employee's social security and Medicare taxes from your own funds, do not withhold them from your employee's wages. 2005 tax filing The social security and Medicare taxes you pay to cover your employee's share must be included in the employee's wages for income tax purposes. 2005 tax filing However, they are not counted as social security and Medicare wages or as federal unemployment (FUTA) wages. 2005 tax filing Example. 2005 tax filing In 2014 you hire a household employee (who is an unrelated individual over age 18) to care for your child and agree to pay cash wages of $100 every Friday. 2005 tax filing You expect to pay your employee $1,900 or more for the year. 2005 tax filing You decide to pay your employee's share of social security and Medicare taxes from your own funds. 2005 tax filing You pay your employee $100 every Friday without withholding any social security or Medicare taxes. 2005 tax filing For social security and Medicare tax purposes, your employee's wages each payday are $100. 2005 tax filing For each wage payment, you will pay $15. 2005 tax filing 30 when you pay the taxes. 2005 tax filing This is $7. 2005 tax filing 65 ($6. 2005 tax filing 20 for social security tax + $1. 2005 tax filing 45 for Medicare tax) to cover your employee's share plus $7. 2005 tax filing 65 ($6. 2005 tax filing 20 for social security tax + $1. 2005 tax filing 45 for Medicare tax) for your share. 2005 tax filing For income tax purposes, your employee's wages each payday are $107. 2005 tax filing 65 ($100 + the $7. 2005 tax filing 65 you will pay to cover your employee's share of social security and Medicare taxes). 2005 tax filing Federal Unemployment (FUTA) Tax The federal unemployment tax is part of the federal and state program under the Federal Unemployment Tax Act (FUTA) that pays unemployment compensation to workers who lose their jobs. 2005 tax filing Like most employers, you may owe both the federal unemployment tax (the FUTA tax) and a state unemployment tax. 2005 tax filing Or, you may owe only the FUTA tax or only the state unemployment tax. 2005 tax filing To find out whether you will owe state unemployment tax, contact your state's unemployment tax agency. 2005 tax filing For a list of state unemployment tax agencies, visit the U. 2005 tax filing S. 2005 tax filing Department of Labor's website at www. 2005 tax filing workforcesecurity. 2005 tax filing doleta. 2005 tax filing gov/unemploy/agencies. 2005 tax filing asp. 2005 tax filing You should also find out if you need to pay or collect other state employment taxes or carry workers' compensation insurance. 2005 tax filing The FUTA tax is 6. 2005 tax filing 0% of your employee's FUTA wages. 2005 tax filing However, you may be able to take a credit of up to 5. 2005 tax filing 4% against the FUTA tax, resulting in a net tax rate of 0. 2005 tax filing 6%. 2005 tax filing Your credit for 2014 is limited unless you pay all the required contributions for 2014 to your state unemployment fund by April 15, 2015. 2005 tax filing The credit you can take for any contributions for 2014 that you pay after April 15, 2015, is limited to 90% of the credit that would have been allowable if the contributions were paid by April 15, 2015. 2005 tax filing (If you did not pay all the required contributions for 2013 by April 15, 2014, see Credit for 2013, later. 2005 tax filing ) Note. 2005 tax filing   If a due date falls on a Saturday, Sunday, or legal holiday, payments are considered timely if made by the next business day. 2005 tax filing The term “legal holiday” means any legal holiday in the District of Columbia. 2005 tax filing Pay the tax as discussed under How Do You Make Tax Payments, later. 2005 tax filing Also, see What Forms Must You File, later. 2005 tax filing Note. 2005 tax filing   The 5. 2005 tax filing 4% credit is reduced for wages paid in a credit reduction state. 2005 tax filing See the Instructions for Schedule H (Form 1040). 2005 tax filing Do not withhold the FUTA tax from your employee's wages. 2005 tax filing You must pay it from your own funds. 2005 tax filing FUTA wages. 2005 tax filing   Figure the FUTA tax on the FUTA wages you pay. 2005 tax filing If you pay cash wages to all of your household employees totaling $1,000 or more in any calendar quarter of 2013 or 2014, the first $7,000 of cash wages you pay to each household employee in 2014 is FUTA wages. 2005 tax filing (A calendar quarter is January through March, April through June, July through September, or October through December. 2005 tax filing ) If your employee's cash wages reach $7,000 during the year, do not figure the FUTA tax on any wages you pay that employee during the rest of the year. 2005 tax filing For an explanation of cash wages, see the discussion on Social security and Medicare wages under Social Security and Medicare Taxes, earlier. 2005 tax filing Wages not counted. 2005 tax filing   Do not count wages you pay to any of the following individuals as FUTA wages. 2005 tax filing Your spouse. 2005 tax filing Your child who is under the age of 21. 2005 tax filing Your parent. 2005 tax filing Credit for 2013. 2005 tax filing   The credit you can take for any state unemployment fund contributions for 2013 that you pay after April 15, 2014, is limited to 90% of the credit that would have been allowable if the contributions were paid on or before April 15, 2014. 2005 tax filing Use Worksheet A to figure the credit for late contributions if you paid any state contributions after the due date for filing  Form 1040. 2005 tax filing Worksheet A. 2005 tax filing Worksheet for Credit for Late Contributions 1. 2005 tax filing Enter the amount from Schedule H, line 22   2. 2005 tax filing Enter the amount from Schedule H, line 19   3. 2005 tax filing Subtract line 2 from line 1. 2005 tax filing If zero or less, enter -0-   4. 2005 tax filing Enter total contributions paid to the state(s) after the Form 1040 due date   5. 2005 tax filing Enter the smaller of line 3 or line 4   6. 2005 tax filing Multiply line 5 by . 2005 tax filing 90 (90%)   7. 2005 tax filing Add lines 2 and 6   8. 2005 tax filing Enter the smaller of the amount on line 1 or line 7 here and on Schedule H, line 23   Do You Need To Withhold Federal Income Tax? You are not required to withhold federal income tax from wages you pay a household employee. 2005 tax filing You should withhold federal income tax only if your household employee asks you to withhold it and you agree. 2005 tax filing The employee must give you a completed Form W-4, Employee's Withholding Allowance Certificate. 2005 tax filing If you and your employee have agreed to withholding, either of you may end the agreement by letting the other know in writing. 2005 tax filing If you agree to withhold federal income tax, you are responsible for paying it to the IRS. 2005 tax filing Pay the tax as discussed under How Do You Make Tax Payments, later. 2005 tax filing Also, see What Forms Must You File, later. 2005 tax filing Use the income tax withholding tables in Publication 15 (Circular E) to find out how much to withhold. 2005 tax filing Figure federal income tax withholding on wages before you deduct any amounts for other withheld taxes. 2005 tax filing Withhold federal income tax from each payment of wages based on the filing status and exemptions shown on your employee's Form W-4. 2005 tax filing Publication 15 (Circular E) contains detailed instructions. 2005 tax filing Wages. 2005 tax filing   Figure federal income tax withholding on both cash and noncash wages you pay. 2005 tax filing Measure wages you pay in any form other than cash by the fair market value of the noncash item. 2005 tax filing   Do not count as wages any of the following items. 2005 tax filing Meals provided to your employee at your home for your convenience. 2005 tax filing Lodging provided to your employee at your home for your convenience and as a condition of employment. 2005 tax filing Up to $130 per month for 2014 for transit passes you give your employee (or for any cash reimbursement you make for the amount your employee pays for transit passes used to commute to your home if you qualify for this exclusion). 2005 tax filing A transit pass includes any pass, token, fare card, voucher, or similar item entitling a person to ride on mass transit, such as a bus or train. 2005 tax filing See Publication 15-B for special requirements for this exclusion. 2005 tax filing Up to $250 per month for 2014 for the value of parking you provide your employee or for any cash reimbursement you make for the amount your employee pays and substantiates for parking at or near your home or at or near a location from which your employee commutes to your home. 2005 tax filing   See Publication 15 (Circular E) for more information on cash and noncash wages. 2005 tax filing Paying tax without withholding. 2005 tax filing   Any income tax you pay for your employee without withholding it from the employee's wages must be included in the employee's wages for federal income tax purposes. 2005 tax filing It also must be included in social security and Medicare wages and in federal unemployment (FUTA) wages. 2005 tax filing What Do You Need To Know About the Earned Income Credit? Certain workers can take the earned income credit (EIC) on their federal income tax return. 2005 tax filing This credit reduces their tax or allows them to receive a payment from the IRS. 2005 tax filing You also may have to give your employee a notice about the EIC. 2005 tax filing Notice about the EIC. 2005 tax filing   Copy B of the 2014 Form W-2 has a statement about the EIC on the back. 2005 tax filing If you give your employee that copy by February 2, 2015 (as discussed under Form W-2 under What Forms Must You File, later), you do not have to give the employee any other notice about the EIC. 2005 tax filing   If you do not give your employee Copy B of the Form W-2, your notice about the EIC can be any of the following items. 2005 tax filing A substitute Form W-2 with the same EIC information on the back of the employee's copy that is on Copy B of the Form W-2. 2005 tax filing Notice 797, Possible Federal Tax Refund Due to the Earned Income Credit (EIC). 2005 tax filing Your own written statement with the same wording as in Notice 797. 2005 tax filing If a substitute Form W-2 is given on time but does not have the required EIC information, you must notify the employee within one week of the date the substitute Form W-2 is given. 2005 tax filing If Form W-2 is required but is not given on time, you must give the employee Notice 797 or your written statement about the 2014 EIC by February 2, 2015. 2005 tax filing If Form W-2 is not required, you must notify the employee by February 7, 2015. 2005 tax filing   You must give your household employee a notice about the EIC if you agree to withhold federal income tax from the employee's wages (as discussed earlier under Do You Need To Withhold Federal Income Tax?) and the income tax withholding tables show that no tax should be withheld. 2005 tax filing Even if not required, you are encouraged to give the employee a notice about the EIC if his or her 2014 wages are less than $46,997 ($52,427 if married filing jointly). 2005 tax filing How Do You Make Tax Payments? When you file your 2014 federal income tax return in 2015, attach Schedule H (Form 1040) to your Form 1040, 1040NR, 1040-SS, or 1041. 2005 tax filing Use Schedule H to figure your total household employment taxes (social security, Medicare, FUTA, and withheld federal income taxes). 2005 tax filing Add these household employment taxes to your income tax. 2005 tax filing Pay the amount due by April 15, 2015. 2005 tax filing For more information about using Schedule H, see Schedule H under What Forms Must You File, later. 2005 tax filing You can avoid owing tax with your return if you pay enough tax during the year to cover your household employment taxes, as well as your income tax. 2005 tax filing You can pay the additional tax in any of the following ways. 2005 tax filing Ask your employer to withhold more federal income tax from your wages in 2014. 2005 tax filing Ask the payer of your pension or annuity to withhold more federal income tax from your benefits. 2005 tax filing Make estimated tax payments for 2014 to the IRS. 2005 tax filing Increase your payments if you already make estimated tax payments. 2005 tax filing You may be subject to the estimated tax underpayment penalty if you did not pay enough income and household employment taxes during the year. 2005 tax filing (See Publication 505, Tax Withholding and Estimated Tax, for information about the underpayment penalty. 2005 tax filing ) However, you will not be subject to the penalty if both of the following situations apply to you. 2005 tax filing You will not have federal income tax withheld from wages, pensions, or any other payments you receive. 2005 tax filing Your income taxes, excluding your household employment taxes, would not be enough to require payment of estimated taxes. 2005 tax filing Asking for more federal income tax withholding. 2005 tax filing   If you are employed and want more federal income tax withheld from your wages to cover your household employment taxes, give your employer a new Form W-4. 2005 tax filing Complete it as before, but show the additional amount you want withheld from each paycheck on line 6. 2005 tax filing   If you receive a pension or annuity and want more federal income tax withheld to cover household employment taxes, give the payer a new Form W-4P, Withholding Certificate for Pension or Annuity Payments (or a similar form provided by the payer). 2005 tax filing Complete it as before, but show the additional amount you want withheld from each benefit payment on line 3. 2005 tax filing   See Publication 505 to make sure you will have the right amount withheld. 2005 tax filing It will help you compare your total expected withholding for 2014 with the combined income tax and employment taxes that you can expect to figure on your 2014 tax return. 2005 tax filing Paying estimated tax. 2005 tax filing   If you want to make estimated tax payments to cover household employment taxes, get Form 1040-ES, Estimated Tax for Individuals. 2005 tax filing You can use its payment vouchers to make your payments by check or money order. 2005 tax filing You may be able to pay by Electronic Funds Withdrawal (EFW) or credit card. 2005 tax filing For details, see the form instructions and visit IRS. 2005 tax filing gov. 2005 tax filing    You can pay all the employment taxes at once or you can pay them in installments. 2005 tax filing If you have already made estimated tax payments for 2014, you can increase your remaining payments to cover the employment taxes. 2005 tax filing Estimated tax payments for 2014 are due April 15, June 16, and September 15, 2014, and January 15, 2015. 2005 tax filing Payment option for business employers. 2005 tax filing   If you own a business as a sole proprietor or your home is on a farm operated for profit, you can choose either of two ways to pay your 2014 household employment taxes. 2005 tax filing You can pay them with your federal income tax as previously described, or you can include them with your federal employment tax deposits or other payments for your business or farm employees. 2005 tax filing For information on depositing employment taxes, see Publication 15 (Circular E). 2005 tax filing   If you pay your household employment taxes with your business or farm employment taxes, you must report your household employment taxes with those other employment taxes on Form 941, Employer's QUARTERLY Federal Tax Return, Form 944, Employer's ANNUAL Federal Tax Return, or Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, and on Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. 2005 tax filing See Business employment tax returns, later. 2005 tax filing    The deduction that can be taken on Schedules C and F (Form 1040) for wages and employment taxes applies only to wages and taxes paid for business and farm employees. 2005 tax filing You cannot deduct the wages and employment taxes paid for your household employees on your Schedule C or F. 2005 tax filing More information. 2005 tax filing   For more information about paying taxes through federal income tax withholding and estimated tax payments, and figuring the estimated tax penalty, see Publication 505. 2005 tax filing What Forms Must You File? You must file certain forms to report your household employee's wages and the federal employment taxes for the employee if you pay any of the following wages to the employee. 2005 tax filing Social security and Medicare wages. 2005 tax filing FUTA wages. 2005 tax filing Wages from which you withhold federal income tax. 2005 tax filing For information on ordering employment tax forms, see How To Get Tax Help, later. 2005 tax filing Employer identification number (EIN). 2005 tax filing   You must include your employer identification number (EIN) on the forms you file for your household employee. 2005 tax filing An EIN is a nine-digit number issued by the IRS. 2005 tax filing It is not the same as a social security number. 2005 tax filing    You ordinarily will have an EIN if you previously paid taxes for employees, either as a household employer or as a sole proprietor of a business you own. 2005 tax filing If you already have an EIN, use that number. 2005 tax filing   If you do not have an EIN, you may apply for one online. 2005 tax filing Go to IRS. 2005 tax filing gov and click on the Apply for an EIN Online link under Tools. 2005 tax filing You may also apply for an EIN by calling 1-800-829-4933, or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. 2005 tax filing Form W-2. 2005 tax filing   File a separate 2014 Form W-2, for each household employee to whom you pay either of the following wages during the year. 2005 tax filing Social security and Medicare wages of $1,900 or more. 2005 tax filing Wages from which you withhold federal income tax. 2005 tax filing You must complete Form W-2 and give Copies B, C, and 2 to your employee by February 2, 2015. 2005 tax filing You must send Copy A of Form W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the SSA by March 2, 2015 (March 31, 2015, if you file your Form W-2 electronically). 2005 tax filing Electronic filing is available to all employers and is free, fast, secure, and offers a later filing deadline. 2005 tax filing Visit the SSA's Employer W-2 Filing Instructions & Information website at www. 2005 tax filing socialsecurity. 2005 tax filing gov/employer for guidelines on filing electronically. 2005 tax filing Employee who leaves during the year. 2005 tax filing   If an employee stops working for you before the end of 2014, you can file Form W-2 and provide copies to your employee immediately after you make your final payment of wages. 2005 tax filing You do not need to wait until 2015. 2005 tax filing If the employee asks you for Form W-2, give it to him or her within 30 days after the request or the last wage payment, whichever is later. 2005 tax filing Schedule H. 2005 tax filing   Use Schedule H to report household employment taxes if you pay any of the following wages to the employee. 2005 tax filing Social security and Medicare wages of $1,900 or more. 2005 tax filing FUTA wages. 2005 tax filing Wages from which you withhold federal income tax. 2005 tax filing File Schedule H with your 2014 federal income tax return by April 15, 2015. 2005 tax filing If you get an extension to file your return, the extension also will apply to your Schedule H. 2005 tax filing Filing options when no return is required. 2005 tax filing   If you are not required to file a 2014 tax return, you have the following two options. 2005 tax filing You can file Schedule H by itself. 2005 tax filing See the Schedule H instructions for details. 2005 tax filing If, besides your household employee, you have other employees for whom you report employment taxes on Form 941, Form 944, or Form 943 and on Form 940, you can include your taxes for your household employee on those forms. 2005 tax filing See Business employment tax returns, next. 2005 tax filing   Employers having the options listed above include certain tax-exempt organizations that do not have to file a tax return, such as churches that pay a household worker to take care of a minister's home. 2005 tax filing Business employment tax returns. 2005 tax filing   Do not use Schedule H if you choose to pay the employment taxes for your household employee with business or farm employment taxes. 2005 tax filing (See Payment option for business employers, earlier. 2005 tax filing ) Instead, include the social security, Medicare, and withheld federal income taxes for the employee on the Form 941 or Form 944 you file for your business or on the Form 943 you file for your farm. 2005 tax filing Include the FUTA tax for the employee on your Form 940. 2005 tax filing   If you report the employment taxes for your household employee on Form 941, Form 944, or Form 943, file Form W-2 for that employee with the Forms W-2 and Form W-3 for your business or farm employees. 2005 tax filing   For information on filing Form 941 or Form 944, see Publication 15 (Circular E). 2005 tax filing For information on filing Form 943, see Publication 51 (Circular A), Agricultural Employer's Tax Guide. 2005 tax filing Both of these publications also provide information about filing Form 940. 2005 tax filing What Records Must You Keep? Keep your copies of Schedule H or other employment tax forms you file and related Forms W-2, W-3, and W-4. 2005 tax filing You must also keep records to support the information you enter on the forms you file. 2005 tax filing If you must file Form W-2, you will need to keep a record of your employee's name, address, and social security number. 2005 tax filing Wage and tax records. 2005 tax filing   On each payday, you should record the date and amounts of all the following items. 2005 tax filing Your employee's cash and noncash wages. 2005 tax filing Any employee social security tax you withhold or agree to pay for your employee. 2005 tax filing Any employee Medicare tax you withhold or agree to pay for your employee. 2005 tax filing Any federal income tax you withhold. 2005 tax filing Any state employment taxes you withhold. 2005 tax filing Employee's social security number. 2005 tax filing   You must keep a record of your employee's name and social security number exactly as they appear on his or her social security card if you pay the employee either of the following. 2005 tax filing Social security and Medicare wages of $1,900 or more. 2005 tax filing Wages from which you withhold federal income tax. 2005 tax filing You must ask for your employee's social security number no later than the first day on which you pay the wages. 2005 tax filing You may wish to ask for it when you hire your employee. 2005 tax filing You should ask your employee to show you his or her social security card. 2005 tax filing The employee may show the card if it is available. 2005 tax filing You may, but are not required to, photocopy the card if the employee provides it. 2005 tax filing   An employee who does not have a social security number must apply for one on Form SS-5, Application for a Social Security Card. 2005 tax filing An employee who has lost his or her social security card or whose name is not correctly shown on the card may apply for a replacement card. 2005 tax filing    Employees can get Form SS-5 from any Social Security Administration office or by calling 1-800-772-1213. 2005 tax filing    You also can download Form SS-5 from the Social Security Administration website at  www. 2005 tax filing socialsecurity. 2005 tax filing gov/online/ss-5. 2005 tax filing pdf. 2005 tax filing How long to keep records. 2005 tax filing   Keep your employment tax records for at least 4 years after the due date of the return on which you report the taxes or the date the taxes were paid, whichever is later. 2005 tax filing Can You Claim a Credit for Child and Dependent Care Expenses? If your household employee cares for your dependent who is under age 13 or for your spouse or dependent who is not capable of self-care, you may be able to take an income tax credit against some of your expenses. 2005 tax filing To qualify, you must pay these expenses so you can work or look for work. 2005 tax filing If you can take the credit, you can include in your qualifying expenses your share of the federal and state employment taxes you pay, as well as the employee's wages. 2005 tax filing For information about the credit, see Publication 503, Child and Dependent Care Expenses. 2005 tax filing How Can You Correct Schedule H? If you discover that you made an error on a Schedule H (or Anexo H-PR), the forms used to correct the error depend on whether the Schedule H was attached to another form or whether it was filed by itself. 2005 tax filing Schedule H attached to another form. 2005 tax filing    If you discover an error on a Schedule H that you previously filed with Form 1040, Form 1040NR, or Form 1040-SS, file Form 1040X, Amended U. 2005 tax filing S. 2005 tax filing Individual Income Tax Return, and attach a corrected Schedule H. 2005 tax filing If you filed Formulario 1040-PR, file a Form 1040X and attach a corrected Anexo H-PR. 2005 tax filing If you discover an error on a Schedule H that you previously filed with Form 1041, U. 2005 tax filing S. 2005 tax filing Income Tax Return for Estates and Trusts, file an “amended” Form 1041 and attach a corrected Schedule H. 2005 tax filing You discovered (that is, ascertained) the error when you had enough information to be able to correct the error. 2005 tax filing Write “CORRECTED” (or “CORREGIDO”) and the date you discovered the error in the top margin of your corrected Schedule H (or Anexo H-PR), in dark, bold letters. 2005 tax filing In addition, explain the reason for your correction and the date the error was discovered in Part III of Form 1040X or in a statement attached to the amended Form 1041. 2005 tax filing Schedule H filed by itself. 2005 tax filing   If you discover an error on a Schedule H (or Anexo H-PR) that you filed as a stand-alone return, file another stand-alone Schedule H with the corrected information. 2005 tax filing You discovered (that is, ascertained) the error when you had enough information to be able to correct the error. 2005 tax filing Write “CORRECTED” (or “CORREGIDO”) and the date you discovered the error in the top margin of your corrected Schedule H (or Anexo H-PR), in dark, bold letters. 2005 tax filing In addition, explain the reason for your correction and the date the error was discovered in a statement attached to the corrected Schedule H. 2005 tax filing If you have an overpayment, also write “ADJUSTED” (or “CORREGIDO”) or “REFUND” (or “REEMBOLSO”) in the top margin, depending on whether you want to adjust your overpayment or claim a refund. 2005 tax filing (See Overpayment of tax, later. 2005 tax filing ) When to file. 2005 tax filing   File a corrected Schedule H when you discover an error on a previously filed Schedule H. 2005 tax filing If you are correcting an underpayment, file a corrected Schedule H no later than the due date of your next tax return (generally, April 15 of the following calendar year) after you discover the error. 2005 tax filing If you are correcting an overpayment, file a corrected Schedule H within the refund period of limitations (generally 3 years from the date your original form was filed or within 2 years from the date you paid the tax, whichever is later). 2005 tax filing Underpayment of tax. 2005 tax filing   You must pay any underpayment of social security and Medicare taxes by the time you file the corrected Schedule H. 2005 tax filing Generally, by filing on time and paying by the time you file the return, you will not be charged interest (and will not be subject to failure-to-pay or estimated tax penalties) on the balance due. 2005 tax filing However, underreported FUTA taxes will be subject to interest. 2005 tax filing Overpayment of tax. 2005 tax filing    You may either adjust or claim a refund of an overpayment of social security and Medicare taxes on a previously filed Schedule H. 2005 tax filing However, if you are correcting an overpayment and are filing the corrected Schedule H within 90 days of the expiration of the period of limitations, you can only claim a refund of the overpayment. 2005 tax filing Adjust the overpayment. 2005 tax filing   If the corrected Schedule H is filed with a Form 1040X or an amended Form 1041, adjust your return by indicating on line 22 of the Form 1040X or on line 29a of the Form 1041 that you would like the overpayment applied to your estimated taxes on Form 1040, Form 1040NR, Form 1040-PR, Form 1040-SS, or Form 1041 for the year in which you are filing the corrected Schedule H. 2005 tax filing If the corrected Schedule H is filed as a stand-alone return, adjust your return by writing “ADJUSTED” (or “CORREGIDO”) in the top margin (in dark, bold letters). 2005 tax filing If you adjust your return, you will not receive interest on your overpayment. 2005 tax filing If the corrected Schedule H will be filed within 90 days of the expiration of the refund period of limitations, you may not adjust the return and must claim a refund for the overpayment. 2005 tax filing You may not adjust your return to correct overpayments of FUTA tax. 2005 tax filing Claim for refund process. 2005 tax filing   If the corrected Schedule H is filed with a Form 1040X or an amended Form 1041, claim a refund by indicating that you would like the overpayment refunded to you on line 21 of the Form 1040X or line 29b of the Form 1041. 2005 tax filing If the corrected Schedule H is filed as a stand-alone return, claim a refund by writing “REFUND” (or “REEMBOLSO”) in the top margin (in dark, bold letters). 2005 tax filing You will receive interest on any overpayment refunded, unless the overpayment is for FUTA tax because you were entitled to increased credits for state contributions. 2005 tax filing Required repayment or consent. 2005 tax filing   If you previously overreported social security and Medicare taxes, you may adjust your overpayment only after you have repaid or reimbursed your employees in the amount of the overcollection of employee tax. 2005 tax filing You reimburse your employees by applying the overwithheld amount against taxes to be withheld on future wages. 2005 tax filing You may claim a refund for the overpayment only after you have repaid or reimbursed your employees in the amount of the overcollection or you have obtained consents from your employees to file the claim for refund for the employee tax. 2005 tax filing Include a statement that you repaid or reimbursed your employees, or obtained their written consents in the case of a claim for refund, in Part III of Form 1040X or in a statement attached to the amended Form 1041 or the stand-alone corrected Schedule H. 2005 tax filing Filing required Forms W-2 or Forms W-2c. 2005 tax filing   Whether you previously underreported tax or overreported tax, you will generally be required to file Form W-2, or their territorial equivalents (if none was previously filed), or Form W-2c, Corrected Wage and Tax Statement, to reflect the changes reported on your corrected Schedule H. 2005 tax filing Additional Medicare Tax. 2005 tax filing   Generally, you may not correct an error in Additional Medicare Tax withholding for wages paid to employees in a prior year unless it is an administrative error. 2005 tax filing An administrative error occurs if the amount you entered on Schedule H is not the amount you actually withheld. 2005 tax filing For example, if the Additional Medicare Tax actually withheld was incorrectly reported on Schedule H due to a mathematical or transposition error, this would be an administrative error. 2005 tax filing   Any underwithheld Additional Medicare Tax must be recovered from employees on or before the last day of the calendar year in which the underwithholding occurred. 2005 tax filing Any excess Additional Medicare Tax withholding must be repaid or reimbursed to employees before the end of the calendar year in which it was withheld. 2005 tax filing Additional information. 2005 tax filing   For more information about correcting errors on a previously filed Schedule H, see page 4 of Form 944-X, Form 944-X: Which process should you use? (substitute “Schedule H” for “Form 944-X”) and the Instructions for Form 944-X (or Formulario 944-X (PR)). 2005 tax filing Also, visit IRS. 2005 tax filing gov. 2005 tax filing How To Get Tax Help Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. 2005 tax filing Free help with your tax return. 2005 tax filing   You can get free help preparing your return nationwide from IRS-certified volunteers. 2005 tax filing The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. 2005 tax filing The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2005 tax filing Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 2005 tax filing In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. 2005 tax filing To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. 2005 tax filing gov, download the IRS2Go app, or call 1-800-906-9887. 2005 tax filing   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2005 tax filing To find the nearest AARP Tax-Aide site, visit AARP's website at www. 2005 tax filing aarp. 2005 tax filing org/money/taxaide or call 1-888-227-7669. 2005 tax filing For more information on these programs, go to IRS. 2005 tax filing gov and enter “VITA” in the search box. 2005 tax filing Internet. 2005 tax filing    IRS. 2005 tax filing gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. 2005 tax filing Download the free IRS2Go app from the iTunes app store or from Google Play. 2005 tax filing Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 2005 tax filing Check the status of your 2013 refund with the Where's My Refund? application on IRS. 2005 tax filing gov or download the IRS2Go app and select the Refund Status option. 2005 tax filing The IRS issues more than 9 out of 10 refunds in less than 21 days. 2005 tax filing Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. 2005 tax filing You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2005 tax filing The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2005 tax filing Use the Interactive Tax Assistant (ITA) to research your tax questions. 2005 tax filing No need to wait on the phone or stand in line. 2005 tax filing The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. 2005 tax filing When you reach the response screen, you can print the entire interview and the final response for your records. 2005 tax filing New subject areas are added on a regular basis. 2005 tax filing  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. 2005 tax filing gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. 2005 tax filing You can use the IRS Tax Map, to search publications and instructions by topic or keyword. 2005 tax filing The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 2005 tax filing When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. 2005 tax filing Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. 2005 tax filing You can also ask the IRS to mail a return or an account transcript to you. 2005 tax filing Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. 2005 tax filing gov or by calling 1-800-908-9946. 2005 tax filing Tax return and tax account transcripts are generally available for the current year and the past three years. 2005 tax filing Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. 2005 tax filing Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. 2005 tax filing If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. 2005 tax filing Check the status of your amended return using Where's My Amended Return? Go to IRS. 2005 tax filing gov and enter Where's My Amended Return? in the search box. 2005 tax filing You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2005 tax filing It can take up to 3 weeks from the date you mailed it to show up in our system. 2005 tax filing Make a payment using one of several safe and convenient electronic payment options available on IRS. 2005 tax filing gov. 2005 tax filing Select the Payment tab on the front page of IRS. 2005 tax filing gov for more information. 2005 tax filing Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. 2005 tax filing Figure your income tax withholding with the IRS Withholding Calculator on IRS. 2005 tax filing gov. 2005 tax filing Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 2005 tax filing Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 2005 tax filing gov. 2005 tax filing Request an Electronic Filing PIN by going to IRS. 2005 tax filing gov and entering Electronic Filing PIN in the search box. 2005 tax filing Download forms, instructions and publications, including accessible versions for people with disabilities. 2005 tax filing Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. 2005 tax filing gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. 2005 tax filing An employee can answer questions about your tax account or help you set up a payment plan. 2005 tax filing Before you visit, check the Office Locator on IRS. 2005 tax filing gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. 2005 tax filing If you have a special need, such as a disability, you can request an appointment. 2005 tax filing Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 2005 tax filing Apply for an Employer Identification Number (EIN). 2005 tax filing Go to IRS. 2005 tax filing gov and enter Apply for an EIN in the search box. 2005 tax filing Read the Internal Revenue Code, regulations, or other official guidance. 2005 tax filing Read Internal Revenue Bulletins. 2005 tax filing Sign up to receive local and national tax news and more by email. 2005 tax filing Just click on “subscriptions” above the search box on IRS. 2005 tax filing gov and choose from a variety of options. 2005 tax filing Phone. 2005 tax filing    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 2005 tax filing Download the free IRS2Go app from the iTunes app store or from Google Play. 2005 tax filing Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. 2005 tax filing gov, or download the IRS2Go app. 2005 tax filing Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 2005 tax filing The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. 2005 tax filing Most VITA and TCE sites offer free electronic filing. 2005 tax filing Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 2005 tax filing Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 2005 tax filing Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. 2005 tax filing If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 2005 tax filing The IRS issues more than 9 out of 10 refunds in less than 21 days. 2005 tax filing Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2005 tax filing Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. 2005 tax filing The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. 2005 tax filing Note, the above information is for our automated hotline. 2005 tax filing Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. 2005 tax filing Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 2005 tax filing You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. 2005 tax filing It can take up to 3 weeks from the date you mailed it to show up in our system. 2005 tax filing Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). 2005 tax filing You should receive your order within 10 business days. 2005 tax filing Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. 2005 tax filing If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. 2005 tax filing Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 2005 tax filing The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 2005 tax filing These individuals can also contact the IRS through relay services such as the Federal Relay Service. 2005 tax filing Walk-in. 2005 tax filing   You can find a selection of forms, publications and services — in-person. 2005 tax filing Products. 2005 tax filing You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 2005 tax filing Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 2005 tax filing Services. 2005 tax filing You can walk in to your local TAC for face-to-face tax help. 2005 tax filing An employee can answer questions about your tax account or help you set up a payment plan. 2005 tax filing Before visiting, use the Office Locator tool on IRS. 2005 tax filing gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. 2005 tax filing Mail. 2005 tax filing   You can send your order for forms, instructions, and publications to the address below. 2005 tax filing You should receive a response within 10 business days after your request is received. 2005 tax filing Internal Revenue Service 1201 N. 2005 tax filing Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. 2005 tax filing The Taxpayer Advocate Service (TAS) is your voice at the IRS. 2005 tax filing Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 2005 tax filing   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. 2005 tax filing We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 2005 tax filing You face (or your business is facing) an immediate threat of adverse action. 2005 tax filing You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 2005 tax filing   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 2005 tax filing Here's why we can help: TAS is an independent organization within the IRS. 2005 tax filing Our advocates know how to work with the IRS. 2005 tax filing Our services are free and tailored to meet your needs. 2005 tax filing We have offices in every state, the District of Columbia, and Puerto Rico. 2005 tax filing   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. 2005 tax filing   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 2005 tax filing If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. 2005 tax filing Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. 2005 tax filing Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 2005 tax filing Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. 2005 tax filing Sample W-2 Form This image is too large to be displayed in the current screen. 2005 tax filing Please click the link to view the image. 2005 tax filing Webtitle: Form W-2 Wage and Tax Statement and Form W-3 Transmitttal of Wage and Tax Statemtents Prev  Up  Next   Home   More Online Publications
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IRS Letters and Visits to Return Preparers

The Internal Revenue Service sends many letters annually to federal tax return preparers. Beginning in November 2013, the agency began its fifth year of a hands-on effort to improve the accuracy and quality of filed tax returns and to heighten awareness of preparer responsibilities. Approximately 12,000 letters will be sent to tax return preparers nationwide. Types of letters sent include:

Letter 4810 - Sent in November 2013 advising the recipient that an IRS representative will contact them to schedule an educational visit to review their responsibilities in correctly preparing the Schedule C.

Letter 5105 - Sent in December 2013 recommending the recipient review all Schedule C and preparer due diligence rules, as well as pay special attention to Schedule C accuracy in 2014.

Letter 5271 - Sent in December 2013 recommending the recipient review all Additional Child Tax Credit (ACTC) and preparer due diligence rules, as well as pay special attention to ACTC accuracy in 2014.

Letter 5272 - Sent in December 2013 recommending the recipient review all Additional Child Tax Credit (ACTC) and preparer due diligence rules, as well as pay special attention to ACTC accuracy in 2014 on returns where dependents have an Individual Tax Identification Number (ITIN).

Letter 5292 - Sent in November 2013 advising the recipient that an IRS representative will contact them to schedule an educational visit to review their responsibilities in correctly following preparer tax identification number (PTIN) rules.

The IRS also regularly checks whether federal tax return preparers are compliant with their own tax filing and payment responsibilities.

Letter 4911 - Sent to notify paid tax return preparers that they are not compliant with their personal tax responsibilities and should resolve the matter to avoid affecting their status as a preparer tax identification number (PTIN) holder.

IRS Letters and Visits to Return Preparers: FAQs

 

 

Page Last Reviewed or Updated: 19-Dec-2013

The 2005 Tax Filing

2005 tax filing Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. 2005 tax filing Proc. 2005 tax filing 2009-37 Table of Contents SECTION 1. 2005 tax filing PURPOSE SECTION 2. 2005 tax filing BACKGROUND SECTION 3. 2005 tax filing SCOPE SECTION 4. 2005 tax filing ELECTION PROCEDURES SECTION 5. 2005 tax filing REQUIRED INFORMATION STATEMENT SECTION 6. 2005 tax filing EFFECTIVE DATE SECTION 7. 2005 tax filing TRANSITION RULE SECTION 8. 2005 tax filing PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. 2005 tax filing PURPOSE . 2005 tax filing 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. 2005 tax filing . 2005 tax filing 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. 2005 tax filing This revenue procedure describes the time and manner of providing this additional information. 2005 tax filing . 2005 tax filing 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. 2005 tax filing Taxpayers should be aware that these regulations may be retroactive. 2005 tax filing See § 7805(b)(2). 2005 tax filing This revenue procedure may be modified to provide procedures consistent with additional guidance. 2005 tax filing SECTION 2. 2005 tax filing BACKGROUND . 2005 tax filing 01 Section 108(i), Generally. 2005 tax filing Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. 2005 tax filing L. 2005 tax filing No. 2005 tax filing 111-5, 123 Stat. 2005 tax filing 338. 2005 tax filing In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. 2005 tax filing Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). 2005 tax filing The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. 2005 tax filing 1273-1(d) of the Income Tax Regulations. 2005 tax filing The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. 2005 tax filing For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). 2005 tax filing A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). 2005 tax filing See § 108(i)(5)(D). 2005 tax filing The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. 2005 tax filing Section 108(i)(5)(D)(ii). 2005 tax filing For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. 2005 tax filing . 2005 tax filing 02 Applicable Debt Instrument. 2005 tax filing Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. 2005 tax filing The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). 2005 tax filing Section 108(i)(3)(B). 2005 tax filing For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. 2005 tax filing 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. 2005 tax filing 1502-13(g)(5). 2005 tax filing . 2005 tax filing 03 Reacquisition. 2005 tax filing Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). 2005 tax filing The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. 2005 tax filing See § 108(i)(4)(B). 2005 tax filing The term “acquisition” also includes an indirect acquisition within the meaning of § 1. 2005 tax filing 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). 2005 tax filing For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. 2005 tax filing . 2005 tax filing 04 General Requirements for the Section 108(i) Election. 2005 tax filing Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. 2005 tax filing (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. 2005 tax filing ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. 2005 tax filing Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. 2005 tax filing . 2005 tax filing 05 Section 108(i) Elections Made by Pass-through Entities. 2005 tax filing In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. 2005 tax filing Section 108(i)(5)(B)(iii). 2005 tax filing . 2005 tax filing 06 Additional Information on Subsequent Years’ Returns. 2005 tax filing Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. 2005 tax filing . 2005 tax filing 07 Exclusivity. 2005 tax filing Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). 2005 tax filing . 2005 tax filing 08 Allocation of Deferred COD Income on Partnership Indebtedness. 2005 tax filing Section 4. 2005 tax filing 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. 2005 tax filing If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. 2005 tax filing 704-1(b)(2)(iii). 2005 tax filing Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). 2005 tax filing The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). 2005 tax filing The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). 2005 tax filing . 2005 tax filing 09 Partner’s Deferred § 752 Amount. 2005 tax filing A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). 2005 tax filing A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). 2005 tax filing To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. 2005 tax filing 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). 2005 tax filing See Rev. 2005 tax filing Rul. 2005 tax filing 92-97, 1992-2 C. 2005 tax filing B. 2005 tax filing 124, and Rev. 2005 tax filing Rul. 2005 tax filing 94-4, 1994-1 C. 2005 tax filing B. 2005 tax filing 195. 2005 tax filing A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). 2005 tax filing . 2005 tax filing 10 Allocation of Deferred COD Income on S Corporation Indebtedness. 2005 tax filing For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. 2005 tax filing . 2005 tax filing 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. 2005 tax filing (1) In general. 2005 tax filing The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). 2005 tax filing These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. 2005 tax filing OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). 2005 tax filing COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. 2005 tax filing See § 1. 2005 tax filing 56(g)-1(c)(1). 2005 tax filing (2) Exceptions for certain special status corporations. 2005 tax filing The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. 2005 tax filing OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. 2005 tax filing . 2005 tax filing 12 Extension of Time to Make Election. 2005 tax filing Under § 301. 2005 tax filing 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. 2005 tax filing An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. 2005 tax filing Section 301. 2005 tax filing 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. 2005 tax filing SECTION 3. 2005 tax filing SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). 2005 tax filing SECTION 4. 2005 tax filing ELECTION PROCEDURES . 2005 tax filing 01 In General. 2005 tax filing (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. 2005 tax filing 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. 2005 tax filing 07, 4. 2005 tax filing 08, 4. 2005 tax filing 09, or 4. 2005 tax filing 10 of this revenue procedure. 2005 tax filing (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. 2005 tax filing 01(1)(a) of this revenue procedure for making the § 108(i) election. 2005 tax filing The rules that apply to an automatic extension under § 301. 2005 tax filing 9100-2(a) apply to this automatic extension. 2005 tax filing . 2005 tax filing 02 Section 108(i) Elections Made by Members of Consolidated Groups. 2005 tax filing The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. 2005 tax filing See § 1. 2005 tax filing 1502-77(a). 2005 tax filing . 2005 tax filing 03 Aggregation Rule. 2005 tax filing A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. 2005 tax filing A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. 2005 tax filing 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. 2005 tax filing . 2005 tax filing 04 Partial Elections. 2005 tax filing (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. 2005 tax filing Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. 2005 tax filing The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. 2005 tax filing (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). 2005 tax filing Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. 2005 tax filing (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. 2005 tax filing Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). 2005 tax filing A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. 2005 tax filing The provisions of this section 4. 2005 tax filing 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. 2005 tax filing . 2005 tax filing 05 Contents of Election Statement. 2005 tax filing A statement meets the requirements of this section 4. 2005 tax filing 05 if the statement— (1) Label. 2005 tax filing States “Section 108(i) Election” across the top. 2005 tax filing (2) Required information. 2005 tax filing Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. 2005 tax filing 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. 2005 tax filing . 2005 tax filing 06 Supplemental information. 2005 tax filing The statement described in section 4. 2005 tax filing 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. 2005 tax filing 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. 2005 tax filing 05(2)(d) of this revenue procedure. 2005 tax filing This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. 2005 tax filing If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. 2005 tax filing If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. 2005 tax filing In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. 2005 tax filing 08, 2. 2005 tax filing 10 and, if applicable, 4. 2005 tax filing 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. 2005 tax filing . 2005 tax filing 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. 2005 tax filing The rules of this section 4. 2005 tax filing 07 apply to partnerships other than partnerships described in section 4. 2005 tax filing 10 of this revenue procedure. 2005 tax filing (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). 2005 tax filing For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. 2005 tax filing , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. 2005 tax filing Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). 2005 tax filing (2) Election information statement provided to partners. 2005 tax filing The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. 2005 tax filing 07(2). 2005 tax filing The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. 2005 tax filing A statement meets the requirements of this section 4. 2005 tax filing 07(2) if the statement— (a) Label. 2005 tax filing States “Section 108(i) Election Information Statement for Partners” across the top. 2005 tax filing (b) Required information. 2005 tax filing Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. 2005 tax filing 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. 2005 tax filing 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. 2005 tax filing 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. 2005 tax filing (c) If a partner fails to provide the written statement required by section 4. 2005 tax filing 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. 2005 tax filing 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. 2005 tax filing (3) Partner reporting requirements. 2005 tax filing The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. 2005 tax filing 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. 2005 tax filing Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. 2005 tax filing A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. 2005 tax filing If a partner provides its written statement under this section 4. 2005 tax filing 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. 2005 tax filing 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. 2005 tax filing . 2005 tax filing 08 Additional Requirements for an S Corporation Making a § 108(i) Election. 2005 tax filing (1) Information filing on Schedule K-1 (Form 1120S). 2005 tax filing For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. 2005 tax filing , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. 2005 tax filing S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. 2005 tax filing (2) Election information statement provided to shareholders. 2005 tax filing The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. 2005 tax filing 08(2). 2005 tax filing The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. 2005 tax filing A statement meets the requirements of this section 4. 2005 tax filing 08(2) if the statement— (a) Label. 2005 tax filing States “Section 108(i) Election Information Statement for Shareholders” across the top. 2005 tax filing (b) Required information. 2005 tax filing Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. 2005 tax filing 06 of this revenue procedure. 2005 tax filing . 2005 tax filing 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. 2005 tax filing The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. 2005 tax filing 964-1(c)(3). 2005 tax filing Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. 2005 tax filing 05 of this revenue procedure and, if applicable, section 4. 2005 tax filing 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. 2005 tax filing . 2005 tax filing 10 Section 108(i) Elections Made By Certain Foreign Partnerships. 2005 tax filing The rules of this section 4. 2005 tax filing 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). 2005 tax filing See § 1. 2005 tax filing 6031(a)-1(b). 2005 tax filing (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. 2005 tax filing 05 of this revenue procedure and, if applicable, section 4. 2005 tax filing 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. 2005 tax filing 6031(a)-1(b)(5) it files with the Service. 2005 tax filing In addition, a nonfiling foreign partnership must include in the information required in section 4. 2005 tax filing 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. 2005 tax filing S. 2005 tax filing persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). 2005 tax filing (2) The nonfiling foreign partnership must make the election, in accordance with § 1. 2005 tax filing 6031(a)-1(b)(5), by the date provided in section 4. 2005 tax filing 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. 2005 tax filing (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. 2005 tax filing 07(1) of this revenue procedure. 2005 tax filing Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 2005 tax filing The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. 2005 tax filing 07(2) of this revenue procedure by the date provided in section 4. 2005 tax filing 01(1)(a) of this revenue procedure. 2005 tax filing The partnership should not attach any statement described in section 4. 2005 tax filing 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. 2005 tax filing However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. 2005 tax filing (4) The partnership and each affected partner must satisfy the requirements of section 4. 2005 tax filing 07(3) of this revenue procedure. 2005 tax filing . 2005 tax filing 11 Protective § 108(i) Election. 2005 tax filing (1) In general. 2005 tax filing A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. 2005 tax filing If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). 2005 tax filing Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. 2005 tax filing A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. 2005 tax filing 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. 2005 tax filing 01(1)(a) of this revenue procedure. 2005 tax filing The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. 2005 tax filing A statement meets the requirements of this section 4. 2005 tax filing 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. 2005 tax filing 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. 2005 tax filing 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. 2005 tax filing 06 of this revenue procedure. 2005 tax filing (2) Statements provided to shareholders and partners. 2005 tax filing (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. 2005 tax filing 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. 2005 tax filing 11(1)(d) of this revenue procedure. 2005 tax filing (b) The partnership or S corporation should not attach the statements described in this section 4. 2005 tax filing 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2005 tax filing . 2005 tax filing 12 Election-Year Reporting by Tiered Pass-Through Entities. 2005 tax filing (1) A partnership required to file a U. 2005 tax filing S. 2005 tax filing partnership return other than under § 1. 2005 tax filing 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. 2005 tax filing 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. 2005 tax filing 07(1)(a) through (d) of this revenue procedure). 2005 tax filing (2) If a partnership described in section 4. 2005 tax filing 12(1) of this revenue procedure receives a statement described in sections 4. 2005 tax filing 07(2) or 4. 2005 tax filing 10(3) of this revenue procedure or this section 4. 2005 tax filing 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. 2005 tax filing 07(2)(b)(x) of this revenue procedure. 2005 tax filing If an S corporation receives a statement described in sections 4. 2005 tax filing 07(2) or 4. 2005 tax filing 10(3) of this revenue procedure or this section 4. 2005 tax filing 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. 2005 tax filing 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. 2005 tax filing The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. 2005 tax filing The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2005 tax filing (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. 2005 tax filing 704-1(b)(2)(iii). 2005 tax filing The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. 2005 tax filing No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. 2005 tax filing The partnership allocates amounts described in section 4. 2005 tax filing 06 of this revenue procedure under this section 4. 2005 tax filing 12(3) as if the additional COD income was realized. 2005 tax filing (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. 2005 tax filing No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. 2005 tax filing (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. 2005 tax filing (6) This paragraph 4. 2005 tax filing 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. 2005 tax filing S. 2005 tax filing Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. 2005 tax filing 07(1) of this revenue procedure, or a statement described in sections 4. 2005 tax filing 07(2) or 4. 2005 tax filing 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). 2005 tax filing (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. 2005 tax filing 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. 2005 tax filing 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. 2005 tax filing (b) A Category 2 filer must include its share of the information described in section 4. 2005 tax filing 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 2005 tax filing Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 2005 tax filing (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. 2005 tax filing 12(6)(a)(ii) and 4. 2005 tax filing 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 2005 tax filing However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 2005 tax filing (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. 2005 tax filing 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. 2005 tax filing 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. 2005 tax filing 12(1) and (2) of this revenue procedure. 2005 tax filing Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 2005 tax filing 12(6) of this revenue procedure. 2005 tax filing (8) The provisions of section 4. 2005 tax filing 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. 2005 tax filing 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. 2005 tax filing 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. 2005 tax filing 11(1)(d) of this revenue procedure. 2005 tax filing SECTION 5. 2005 tax filing REQUIRED INFORMATION STATEMENT . 2005 tax filing 01 Annual Information Statements. 2005 tax filing Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. 2005 tax filing 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. 2005 tax filing 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. 2005 tax filing . 2005 tax filing 02 Contents of Statement. 2005 tax filing A statement meets the requirements of this section 5. 2005 tax filing 02 if the statement— (1) Label. 2005 tax filing States “Section 108(i) Information Statement” across the top; (2) Required information. 2005 tax filing Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. 2005 tax filing (3) Election attached. 2005 tax filing Includes a copy of the election statement described in section 4. 2005 tax filing 05 of this revenue procedure. 2005 tax filing . 2005 tax filing 03 Additional Annual Reporting Requirements for Certain Partnerships. 2005 tax filing The rules of this section 5. 2005 tax filing 03 apply to partnerships other than partnerships described in section 5. 2005 tax filing 05 of this revenue procedure. 2005 tax filing (1) In general. 2005 tax filing A partnership that makes an election under § 108(i) (except for a protective election under section 4. 2005 tax filing 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 2005 tax filing 01 of this revenue procedure. 2005 tax filing In addition, for each taxable year in which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. 2005 tax filing 07(1) of this revenue procedure. 2005 tax filing (2) Annual information statements provided to partners. 2005 tax filing The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure, a statement meeting the requirements of this section 5. 2005 tax filing 03(2). 2005 tax filing The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. 2005 tax filing A statement meets the requirements of this section 5. 2005 tax filing 03(2) if the statement— (a) Label. 2005 tax filing States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. 2005 tax filing (b) Required information. 2005 tax filing Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. 2005 tax filing If a partner fails to provide the written statement required by section 4. 2005 tax filing 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. 2005 tax filing 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. 2005 tax filing . 2005 tax filing 04 Additional Annual Reporting Requirements for an S Corporation. 2005 tax filing (1) In general. 2005 tax filing An S corporation that makes an election under § 108(i) (except for a protective election under section 4. 2005 tax filing 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 2005 tax filing 01 of this revenue procedure. 2005 tax filing In addition, for each taxable year in which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. 2005 tax filing 08(1) of this revenue procedure. 2005 tax filing (2) Annual information statements provided to shareholders. 2005 tax filing The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure a statement meeting the requirements of this section 5. 2005 tax filing 04(2). 2005 tax filing The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. 2005 tax filing A statement meets the requirements of this section 5. 2005 tax filing 04(2) if the statement— (a) Label. 2005 tax filing States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. 2005 tax filing Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. 2005 tax filing . 2005 tax filing 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. 2005 tax filing (1) The rules of this section 5. 2005 tax filing 05 apply to nonfiling foreign partnerships. 2005 tax filing (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. 2005 tax filing 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. 2005 tax filing 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. 2005 tax filing 01 of this revenue procedure. 2005 tax filing (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. 2005 tax filing 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. 2005 tax filing (4) For each taxable year in which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. 2005 tax filing 07(1) of this revenue procedure. 2005 tax filing Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 2005 tax filing The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. 2005 tax filing 6031(b)-1T(b). 2005 tax filing The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. 2005 tax filing 05(2) of this revenue procedure. 2005 tax filing (5) For each taxable year for which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. 2005 tax filing 03(2) of this revenue procedure. 2005 tax filing The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. 2005 tax filing . 2005 tax filing 06 Information Statements Made on Behalf of Certain Foreign Corporations. 2005 tax filing Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. 2005 tax filing 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. 2005 tax filing 01 of this revenue procedure. 2005 tax filing . 2005 tax filing 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. 2005 tax filing (1) A partnership required to file a U. 2005 tax filing S. 2005 tax filing partnership return other than under § 1. 2005 tax filing 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. 2005 tax filing 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. 2005 tax filing 07(1)(a) through (d) of this revenue procedure). 2005 tax filing (2) If a partnership described in section 5. 2005 tax filing 07(1) of this revenue procedure receives a statement described in sections 5. 2005 tax filing 03(2) or 5. 2005 tax filing 05(5) of this revenue procedure or this section 5. 2005 tax filing 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. 2005 tax filing If an S corporation receives a statement described in sections 5. 2005 tax filing 03(2) or 5. 2005 tax filing 05(5) of this revenue procedure or this section 5. 2005 tax filing 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. 2005 tax filing 03(2)(b)(i) through (viii) of this revenue procedure. 2005 tax filing The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. 2005 tax filing The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. 2005 tax filing (3) This paragraph 5. 2005 tax filing 07(3) provides the rules for persons described in section 4. 2005 tax filing 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. 2005 tax filing 03(1) of this revenue procedure, or a statement described in sections 5. 2005 tax filing 03(2) or 5. 2005 tax filing 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). 2005 tax filing (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. 2005 tax filing 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. 2005 tax filing 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. 2005 tax filing (b) A Category 2 filer must include its share of the information described in section 4. 2005 tax filing 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 2005 tax filing Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 2005 tax filing (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. 2005 tax filing 07(3)(a)(ii) and 5. 2005 tax filing 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 2005 tax filing However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 2005 tax filing (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. 2005 tax filing 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. 2005 tax filing 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. 2005 tax filing 07(1) and (2) of this revenue procedure. 2005 tax filing Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 2005 tax filing 12(6) of this revenue procedure. 2005 tax filing SECTION 6. 2005 tax filing EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. 2005 tax filing SECTION 7. 2005 tax filing TRANSITION RULE . 2005 tax filing 01 Noncomplying Election. 2005 tax filing Except as otherwise provided in this section 7. 2005 tax filing 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. 2005 tax filing However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. 2005 tax filing . 2005 tax filing 02 Modification of Election. 2005 tax filing A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). 2005 tax filing To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. 2005 tax filing . 2005 tax filing 03 Notations. 2005 tax filing A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. 2005 tax filing A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. 2005 tax filing See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. 2005 tax filing SECTION 8. 2005 tax filing PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. 2005 tax filing S. 2005 tax filing C. 2005 tax filing 3507) under control number 1545-2147. 2005 tax filing An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. 2005 tax filing The collection of information in this revenue procedure is in sections 4, 5 and 7. 2005 tax filing This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. 2005 tax filing This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. 2005 tax filing The collection of information is required to obtain a benefit. 2005 tax filing The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. 2005 tax filing The estimated total annual reporting burden is 300,000 hours. 2005 tax filing The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. 2005 tax filing The estimated number of respondents is 50,000. 2005 tax filing Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. 2005 tax filing Generally, tax returns and return information are confidential, as required by § 6103. 2005 tax filing DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. 2005 tax filing Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). 2005 tax filing For further information regarding this revenue procedure, contact Megan A. 2005 tax filing Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. 2005 tax filing Blanchard at (202) 622-3950 for questions involving OID, Ronald M. 2005 tax filing Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). 2005 tax filing Prev  Up  Next   Home   More Internal Revenue Bulletins