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Amended Federal Tax Form

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Amended Federal Tax Form

Amended federal tax form Publication 556 - Main Content Table of Contents Examination of ReturnsIf Your Return Is Examined Interest Netting Abatement of Interest Due to Error or Delay by the IRS Abatement of Interest for Individuals Affected by Presidentially Declared Disasters or Military or Terrorist Actions Offer in Compromise Appeal RightsAppeal Within the IRS Appeals to the Courts Refund or Credit of Overpayments Before Final Determination Claims for RefundTime for Filing a Claim for Refund Limit on Amount of Refund Processing Claims for Refund Reduced Refund How To Get Tax Help Examination of Returns Your return may be examined for a variety of reasons, and the examination may take place in any one of several ways. Amended federal tax form After the examination, if any changes to your tax are proposed, you can either agree with those changes and pay any additional tax you may owe, or you can disagree with the changes and appeal the decision. Amended federal tax form Examination selection criteria. Amended federal tax form   Your return may be selected for examination on the basis of computer scoring. Amended federal tax form A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. Amended federal tax form If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability. Amended federal tax form   Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that does not match the information reported on your return. Amended federal tax form Or, your return may be selected to address both the questionable treatment of an item and to study the behavior of similar taxpayers (a market segment) in handling a tax issue. Amended federal tax form   In addition, your return may be selected as a result of information received from other sources on potential noncompliance with the tax laws or inaccurate filing. Amended federal tax form This information can come from a number of sources, including newspapers, public records, and individuals. Amended federal tax form The information is evaluated for reliability and accuracy before it is used as the basis of an examination or investigation. Amended federal tax form Notice of IRS contact of third parties. Amended federal tax form    The IRS must give you reasonable notice before contacting other persons about your tax matters. Amended federal tax form You must be given reasonable notice in advance that, in examining or collecting your tax liability, the IRS may contact third parties such as your neighbors, banks, employers, or employees. Amended federal tax form The IRS must also give you notice of specific contacts by providing you with a record of persons contacted on both a periodic basis and upon your request. Amended federal tax form    This provision does not apply: To any pending criminal investigation, When providing notice would jeopardize collection of any tax liability, Where providing notice may result in reprisal against any person, or When you authorized the contact. Amended federal tax form Taxpayer Advocate Service. Amended federal tax form   The Taxpayer Advocate Service is an independent organization within the IRS whose goal is to help taxpayers resolve problems with the IRS. Amended federal tax form If you have an ongoing issue with the IRS that has not been resolved through normal processes, or your problems with the IRS are causing financial difficulty, contact the Taxpayer Advocate Service. Amended federal tax form    Before contacting the Taxpayer Advocate Service, you should first discuss any problem with a supervisor. Amended federal tax form Your local Taxpayer Advocate will assist you if you are unable to resolve the problem with the supervisor. Amended federal tax form   For more information, see Publication 1546. Amended federal tax form See How To Get Tax Help , near the end of this publication, for more information about contacting the Taxpayer Advocate Service. Amended federal tax form Comments from small business. Amended federal tax form    The Small Business and Agricultural Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards have been established to receive comments from small business about federal agency enforcement actions. Amended federal tax form The Ombudsman will annually evaluate the enforcement activities of each agency and rate their responsiveness to small business. Amended federal tax form If you wish to comment on the enforcement actions of the IRS, you can take any of the following steps. Amended federal tax form Fax your comments to 1-202-481-5719. Amended federal tax form Write to the following address: Office of the National Ombudsman U. Amended federal tax form S. Amended federal tax form Small Business Administration 409 3rd Street, SW Washington, DC 20416 Call 1-888-734-3247. Amended federal tax form Send an email to ombudsman@sba. Amended federal tax form gov. Amended federal tax form File a comment or complaint online at www. Amended federal tax form sba. Amended federal tax form gov/ombudsman. Amended federal tax form If Your Return Is Examined Some examinations are handled entirely by mail. Amended federal tax form Examinations not handled by mail can take place in your home, your place of business, an Internal Revenue office, or the office of your authorized representative. Amended federal tax form If the time, place, or method is not convenient for you, the examiner will try to work out something more suitable. Amended federal tax form However, the IRS makes the final determination of when, where, and how the examination will take place. Amended federal tax form Throughout the examination, you can act on your own behalf or have someone represent you or accompany you. Amended federal tax form If you filed a joint return, either you or your spouse, or both, can meet with the IRS. Amended federal tax form The person representing you can be any federally authorized practitioner, including an attorney, a certified public accountant, an enrolled agent (a person enrolled to practice before the IRS), an enrolled actuary, or the person who prepared the return and signed it as the preparer. Amended federal tax form If you want someone to represent you in your absence, you must furnish that person with proper written authorization. Amended federal tax form You can use Form 2848 or any other properly written authorization. Amended federal tax form If you want to consult with an attorney, a certified public accountant, an enrolled agent, or any other person permitted to represent a taxpayer during an interview for examining a tax return or collecting tax, you should make arrangements with that person to be available for the interview. Amended federal tax form In most cases, the IRS must suspend the interview and reschedule it. Amended federal tax form The IRS cannot suspend the interview if you are there because of an administrative summons. Amended federal tax form Third party authorization. Amended federal tax form   If you checked the box in the signature area of your income tax return (Form 1040, Form 1040A, or Form 1040EZ) to allow the IRS to discuss your return with another person (a third party designee), this authorization does not replace Form 2848. Amended federal tax form The box you checked on your return only authorizes the other person to receive information about the processing of your return and the status of your refund during the period your return is being processed. Amended federal tax form For more information, see the instructions for your return. Amended federal tax form Confidentiality privilege. Amended federal tax form   Generally, the same confidentiality protection that you have with an attorney also applies to certain communications that you have with federally authorized practitioners. Amended federal tax form   Confidential communications are those that: Advise you on tax matters within the scope of the practitioner's authority to practice before the IRS, Would be confidential between an attorney and you, and Relate to noncriminal tax matters before the IRS, or Relate to noncriminal tax proceedings brought in federal court by or against the United States. Amended federal tax form   In the case of communications in connection with the promotion of a person's participation in a tax shelter, the confidentiality privilege does not apply to written communications between a federally authorized practitioner and that person, any director, officer, employee, agent, or representative of that person, or any other person holding a capital or profits interest in that person. Amended federal tax form   A tax shelter is any entity, plan, or arrangement, a significant purpose of which is the avoidance or evasion of income tax. Amended federal tax form Recordings. Amended federal tax form    You can make an audio recording of the examination interview. Amended federal tax form Your request to record the interview should be made in writing. Amended federal tax form You must notify the examiner 10 days in advance and bring your own recording equipment. Amended federal tax form The IRS also can record an interview. Amended federal tax form If the IRS initiates the recording, you must be notified 10 days in advance and you can get a copy of the recording at your expense. Amended federal tax form Transfers to another area. Amended federal tax form    Generally, your return is examined in the area where you live. Amended federal tax form But if your return can be examined more quickly and conveniently in another area, such as where your books and records are located, you can ask to have the case transferred to that area. Amended federal tax form Repeat examinations. Amended federal tax form    The IRS tries to avoid repeat examinations of the same items, but sometimes this happens. Amended federal tax form If your tax return was examined for the same items in either of the 2 previous years and no change was proposed to your tax liability, please contact the IRS as soon as possible to see if the examination should be discontinued. Amended federal tax form The Examination An examination usually begins when you are notified that your return has been selected. Amended federal tax form The IRS will tell you which records you will need. Amended federal tax form The examination can proceed more easily if you gather your records before any interview. Amended federal tax form Any proposed changes to your return will be explained to you or your authorized representative. Amended federal tax form It is important that you understand the reasons for any proposed changes. Amended federal tax form You should not hesitate to ask about anything that is unclear to you. Amended federal tax form The IRS must follow the tax laws set forth by Congress in the Internal Revenue Code. Amended federal tax form The IRS also follows Treasury Regulations, other rules, and procedures that were written to administer the tax laws and court decisions. Amended federal tax form However, the IRS can lose cases that involve taxpayers with the same issue and still apply its interpretation of the law to your situation. Amended federal tax form Most taxpayers agree to changes proposed by examiners, and the examinations are closed at this level. Amended federal tax form If you do not agree, you can appeal any proposed change by following the procedures provided to you by the IRS. Amended federal tax form A more complete discussion of appeal rights is found later under Appeal Rights . Amended federal tax form If You Agree If you agree with the proposed changes, you can sign an agreement form and pay any additional tax you may owe. Amended federal tax form You must pay interest on any additional tax. Amended federal tax form If you pay when you sign the agreement, the interest is generally figured from the due date of your return (excluding any extension of time to file) to the date of your payment. Amended federal tax form If you do not pay the additional tax when you sign the agreement, you will receive a bill that includes interest. Amended federal tax form If you pay the amount due within 10 business days of the billing date, you will not have to pay more interest or penalties. Amended federal tax form This period is extended to 21 calendar days if the amount due is less than $100,000. Amended federal tax form If you are due a refund, you will receive it sooner if you sign the agreement form. Amended federal tax form You will be paid interest on the refund. Amended federal tax form If the IRS accepts your tax return as filed, you will receive a letter in a few weeks stating that the examiner proposed no changes to your return. Amended federal tax form You should keep this letter with your tax records. Amended federal tax form If You Do Not Agree If you do not agree with the proposed changes, the examiner will explain your appeal rights. Amended federal tax form If your examination takes place in an IRS office, you can request an immediate meeting with the examiner's supervisor to explain your position. Amended federal tax form If an agreement is reached, your case will be closed. Amended federal tax form If you cannot reach an agreement with the supervisor at this meeting, or if the examination took place outside of an IRS office, the examiner will write up your case explaining your position and the IRS's position. Amended federal tax form The examiner will forward your case for processing. Amended federal tax form Fast track mediation. Amended federal tax form   The IRS offers fast track mediation services to help taxpayers resolve many disputes resulting from: Examinations (audits), Offers in compromise, Trust fund recovery penalties, and Other collection actions. Amended federal tax form   Most cases that are not docketed in any court qualify for fast track mediation. Amended federal tax form Mediation can take place at a conference you request with a supervisor, or later. Amended federal tax form The process involves an Appeals Officer who has been trained in mediation. Amended federal tax form You may represent yourself at the mediation session, or someone else can act as your representative. Amended federal tax form For more information, see Publication 3605. Amended federal tax form 30-day letter and 90-day letter. Amended federal tax form   Within a few weeks after your closing conference with the examiner and/or supervisor, you will receive a package with: A letter (known as a 30-day letter) notifying you of your right to appeal the proposed changes within 30 days, A copy of the examination report explaining the examiner's proposed changes, An agreement or waiver form, and A copy of Publication 5. Amended federal tax form You generally have 30 days from the date of the 30-day letter to tell the IRS whether you will accept or appeal the proposed changes. Amended federal tax form The letter will explain what steps you should take, depending on which action you choose. Amended federal tax form Be sure to follow the instructions carefully. Amended federal tax form Appeal Rights are explained later. Amended federal tax form 90-day letter. Amended federal tax form   If you do not respond to the 30-day letter, or if you later do not reach an agreement with an Appeals Officer, the IRS will send you a 90-day letter, which is also known as a notice of deficiency. Amended federal tax form You will have 90 days (150 days if it is addressed to you outside the United States) from the date of this notice to file a petition with the Tax Court. Amended federal tax form Filing a petition with the Tax Court is discussed later under Appeals to the Courts and Tax Court . Amended federal tax form The notice will show the 90th (or 150th) day by which you must file your petition with the Tax Court. Amended federal tax form Suspension of interest and penalties. Amended federal tax form   Generally, the IRS has 3 years from the date you filed your return (or the date the return was due, if later) to assess any additional tax. Amended federal tax form However, if you file your return timely (including extensions), interest and certain penalties will be suspended if the IRS does not mail a notice to you, stating your liability and the basis for that liability, within a 36-month period beginning on the later of: The date on which you filed your tax return, or The due date (without extensions) of your tax return. Amended federal tax form If the IRS mails a notice after the 36-month period, interest and certain penalties applicable to the suspension period will be suspended. Amended federal tax form   The suspension period begins the day after the close of the 36-month period and ends 21 days after the IRS mails a notice to you stating your liability and the basis for that liability. Amended federal tax form Also, the suspension period applies separately to each notice stating your liability and the basis for that liability received by you. Amended federal tax form    The suspension does not apply to a: Failure-to-pay penalty, Fraudulent tax return, Penalty, interest, addition to tax, or additional amount with respect to any tax liability shown on your return or with respect to any gross misstatement, Penalty, interest, addition to tax, or additional amount with respect to any reportable transaction that is not adequately disclosed or any listed transaction, or Criminal penalty. Amended federal tax form Seeking relief from improperly assessed interest. Amended federal tax form   You can seek relief if interest is assessed for periods during which interest should have been suspended because the IRS did not mail a notice to you in a timely manner. Amended federal tax form   If you believe that interest was assessed with respect to a period during which interest should have been suspended, submit Form 843, writing “Section 6404(g) Notification” at the top of the form, with the IRS Service Center where you filed your return. Amended federal tax form The IRS will review the Form 843 and notify you whether interest will be abated. Amended federal tax form If the IRS does not abate interest, you can pay the disputed interest assessment and file a claim for refund. Amended federal tax form If your claim is denied or not acted upon within 6 months from the date you filed it, you can file suit for a refund in your United States District Court or in the United States Court of Federal Claims. Amended federal tax form   If you believe that an IRS officer or employee has made an unreasonable error or delay in performing a ministerial or managerial act (discussed later under Abatement of Interest Due to Error or Delay by the IRS ), file Form 843 with the IRS Service Center where you filed the tax return. Amended federal tax form If the IRS denies your claim, the Tax Court may be able to review that determination. Amended federal tax form See Tax Court can review failure to abate interest later under Abatement of Interest Due to Error or Delay by the IRS . Amended federal tax form If you later agree. Amended federal tax form    If you agree with the examiner's changes after receiving the examination report or the 30-day letter, sign and return either the examination report or the waiver form. Amended federal tax form Keep a copy for your records. Amended federal tax form You can pay any additional amount you owe without waiting for a bill. Amended federal tax form Include interest on the additional tax at the applicable rate. Amended federal tax form This interest rate is usually for the period from the due date of the return (excluding any extension of time to file) to the date of payment. Amended federal tax form The examiner can tell you the interest rate(s) or help you figure the amount. Amended federal tax form   You must pay interest on penalties and additions to tax for failing to file returns, for overstating valuations, for understating valuations on estate and gift tax returns, and for substantially understating tax liability. Amended federal tax form Interest is generally figured from the date (including extensions) the tax return is required to be filed to the date you pay the penalty and/or additions to tax. Amended federal tax form   If you pay the amount due within 10 business days after the date of notice and demand for immediate payment, you will not have to pay any additional penalties and interest. Amended federal tax form This period is extended to 21 calendar days if the amount due is less than $100,000. Amended federal tax form How To Stop Interest From Accruing If you think that you will owe additional tax at the end of the examination, you can stop the further accrual of interest by sending money to the IRS to cover all or part of the amount you think you will owe. Amended federal tax form Interest on part or all of any amount you owe will stop accruing on the date the IRS receives your money. Amended federal tax form You can send an amount either in the form of a deposit in the nature of a cash bond or as a payment of tax. Amended federal tax form Both a deposit and a payment stop any further accrual of interest. Amended federal tax form However, making a deposit or payment will stop the accrual of interest on only the amount you sent. Amended federal tax form Because of compounding rules, interest will continue to accrue on accrued interest, even though you have paid the underlying tax. Amended federal tax form To stop the accrual of interest on both tax and interest, you must make a deposit or payment for both the tax and interest that has accrued as of the date of deposit or payment. Amended federal tax form Payment or Deposit Deposits differ from payments in two ways: You can have all or part of your deposit returned to you without filing for a refund. Amended federal tax form However, if you request and receive your deposit and the IRS later assesses a deficiency for that period and type of tax, interest will be figured as if the funds were never on deposit. Amended federal tax form Also, your deposit will not be returned if one of the following situations applies: The IRS assesses a tax liability. Amended federal tax form The IRS determines that, by returning the deposit, it may not be able to collect a future deficiency. Amended federal tax form The IRS determines that the deposit should be applied against another tax liability. Amended federal tax form Deposits returned to you will include interest based on the Federal short-term rate determined under section 6621(b). Amended federal tax form The deposit returned will be treated as a tax payment to the extent of the disputed tax. Amended federal tax form A disputed tax means the amount of tax specified at the time of deposit as a reasonable estimate of the maximum amount of any tax owed by you, such as the deficiency proposed in the 30-day letter. Amended federal tax form Notice not mailed. Amended federal tax form    If you send money before the IRS mails you a notice of deficiency, you can ask the IRS to treat it as a deposit. Amended federal tax form You must make your request in writing. Amended federal tax form   If, after being notified of a proposed liability but before the IRS mails you a notice of deficiency, you send an amount large enough to cover the proposed liability, it will be considered a payment unless you request in writing that it be treated as a deposit. Amended federal tax form Keep copies of all correspondence you send to the IRS. Amended federal tax form   If the amount you send is at least as much as the proposed liability and you do not request that it be treated as a deposit, the IRS will not send you a notice of deficiency. Amended federal tax form If you do not receive a notice of deficiency, you cannot take your case to the Tax Court. Amended federal tax form See Tax Court , later under Appeal Rights . Amended federal tax form Notice mailed. Amended federal tax form    If, after the IRS mails the notice of deficiency, you send money without written instructions, it will be treated as a payment. Amended federal tax form You will still be able to petition the Tax Court. Amended federal tax form   If you send money after receiving a notice of deficiency and you have specified in writing that it is a “deposit in the nature of a cash bond,” the IRS will treat it as a deposit if you send it before either: The close of the 90-day or 150-day period for filing a petition with the Tax Court to appeal the deficiency, or The date the Tax Court decision is final, if you have filed a petition. Amended federal tax form Using a Deposit To Pay the Tax If you agree with the examiner's proposed changes after the examination, your deposit will be applied against any amount you may owe. Amended federal tax form The IRS will not mail you a notice of deficiency and you will not have the right to take your case to the Tax Court. Amended federal tax form If you do not agree to the full amount of the deficiency after the examination, the IRS will mail you a notice of deficiency. Amended federal tax form Your deposit will be applied against the proposed deficiency unless you write to the IRS before the end of the 90-day or 150-day period stating that you still want the money to be treated as a deposit. Amended federal tax form You will still have the right to take your case to the Tax Court. Amended federal tax form Installment Agreement Request You can request a monthly installment plan if you cannot pay the full amount you owe. Amended federal tax form To be valid, your request must be approved by the IRS. Amended federal tax form However, if you owe $10,000 or less in tax and you meet certain other criteria, the IRS must accept your request. Amended federal tax form Before you request an installment agreement, you should consider other less costly alternatives, such as a bank loan. Amended federal tax form You will continue to be charged interest and penalties on the amount you owe until it is paid in full. Amended federal tax form Unless your income is below a certain level, the fee for an approved installment agreement has increased to $105 ($52 if you make your payments by electronic funds withdrawal). Amended federal tax form If your income is below a certain level, you may qualify to pay a reduced fee of $43. Amended federal tax form For more information about installment agreements, see Form 9465, Installment Agreement Request. Amended federal tax form Interest Netting If you owe interest to the IRS on an underpayment for the same period the IRS owes you interest on an overpayment, the IRS will figure interest on the underpayment and overpayment at the same interest rate (up to the amount of the overpayment). Amended federal tax form As a result, the net rate is zero for that period. Amended federal tax form Abatement of Interest Due to Error or Delay by the IRS The IRS may abate (reduce) the amount of interest you owe if the interest is due to an unreasonable error or delay by an IRS officer or employee in performing a ministerial or managerial act (discussed later). Amended federal tax form Only the amount of interest on income, estate, gift, generation-skipping, and certain excise taxes can be reduced. Amended federal tax form The amount of interest will not be reduced if you or anyone related to you contributed significantly to the error or delay. Amended federal tax form Also, the interest will be reduced only if the error or delay happened after the IRS contacted you in writing about the deficiency or payment on which the interest is based. Amended federal tax form An audit notification letter is such a contact. Amended federal tax form The IRS cannot reduce the amount of interest due to a general administrative decision, such as a decision on how to organize the processing of tax returns. Amended federal tax form Ministerial act. Amended federal tax form    This is a procedural or mechanical act, not involving the exercise of judgment or discretion, during the processing of a case after all prerequisites (for example, conferences and review by supervisors) have taken place. Amended federal tax form A decision concerning the proper application of federal tax law (or other federal or state law) is not a ministerial act. Amended federal tax form Example 1. Amended federal tax form You move from one state to another before the IRS selects your tax return for examination. Amended federal tax form A letter stating that your return has been selected is sent to your old address and then forwarded to your new address. Amended federal tax form When you get the letter, you respond with a request that the examination be transferred to the area office closest to your new address. Amended federal tax form The examination group manager approves your request. Amended federal tax form After your request has been approved, the transfer is a ministerial act. Amended federal tax form The IRS can reduce the interest because of any unreasonable delay in transferring the case. Amended federal tax form Example 2. Amended federal tax form An examination of your return reveals tax due for which a notice of deficiency (90-day letter) will be issued. Amended federal tax form After you and the IRS discuss the issues, the notice is prepared and reviewed. Amended federal tax form After the review process, issuing the notice of deficiency is a ministerial act. Amended federal tax form If there is an unreasonable delay in sending the notice of deficiency to you, the IRS can reduce the interest resulting from the delay. Amended federal tax form Managerial act. Amended federal tax form    This is an administrative act during the processing of a case that involves the loss of records or the exercise of judgment or discretion concerning the management of personnel. Amended federal tax form A decision concerning the proper application of federal tax law (or other federal or state law) is not a managerial act. Amended federal tax form Example. Amended federal tax form A revenue agent is examining your tax return. Amended federal tax form During the middle of the examination, the agent is sent to an extended training course. Amended federal tax form The agent's supervisor decides not to reassign your case, so the work is unreasonably delayed until the agent returns. Amended federal tax form Interest from the unreasonable delay can be abated since both the decision to send the agent to the training class and not to reassign the case are managerial acts. Amended federal tax form How to request abatement of interest. Amended federal tax form    You request an abatement (reduction) of interest on Form 843. Amended federal tax form You should file the claim with the IRS Service Center where you filed the tax return that was affected by the error or delay. Amended federal tax form   If you have already paid the interest and you would like a credit or refund of interest paid, you must file Form 843 within 3 years from the date you filed your original return or 2 years from the date you paid the interest, whichever is later. Amended federal tax form If you have not paid any of the interest, these time limitations for filing Form 843 do not apply. Amended federal tax form   Generally, you should file a separate Form 843 for each tax period and each type of tax. Amended federal tax form However, complete only one Form 843 if the interest is from an IRS error or delay that affected your tax for more than one tax period or for more than one type of tax (for example, where 2 or more tax years were being examined). Amended federal tax form   If your request for abatement of interest is denied, you can appeal the decision to the IRS Appeals Office. Amended federal tax form Tax Court can review failure to abate interest. Amended federal tax form    The Tax Court can review the IRS's refusal to abate (reduce) interest if all of the following requirements are met: You filed a request for abatement of interest (Form 843) with the IRS after July 30,1996. Amended federal tax form The IRS has mailed you a notice of final determination or a notice of disallowance. Amended federal tax form You file a petition with the Tax Court within 180 days of the mailing of the notice of final determination or the notice of disallowance. Amended federal tax form   The following requirements must also be met: For individual and estate taxpayers — your net worth must not exceed $2 million as of the filing date of your petition for review. Amended federal tax form For this purpose, individuals filing a joint return shall be treated as separate individuals. Amended federal tax form For charities and certain cooperatives — you must not have more than 500 employees as of the filing date of your petition for review. Amended federal tax form For all other taxpayers — your net worth must not exceed $7 million, and you must not have more than 500 employees as of the filing date of your petition for review. Amended federal tax form Abatement of Interest for Individuals Affected by Presidentially Declared Disasters or Military or Terrorist Actions If you are (or were) affected by a Presidentially declared disaster occurring after 1996 or a terrorist or military action occurring after September 10, 2001, the IRS may abate (reduce) the amount of interest you owe on certain taxes. Amended federal tax form The IRS may abate interest for the period of any additional time to file or pay that the IRS provides on account of the disaster or the terrorist or military action. Amended federal tax form The IRS will issue a notice or news release indicating who are affected taxpayers and stating the period of relief. Amended federal tax form If you are eligible for relief from interest, but were charged interest for the period of relief, the IRS may retroactively abate your interest. Amended federal tax form To the extent possible, the IRS can take the following actions: Make appropriate adjustments to your account. Amended federal tax form Notify you when the adjustments are made. Amended federal tax form Refund any interest paid by you where appropriate. Amended federal tax form For more information on disaster area losses, see Disaster Area Losses in Publication 547. Amended federal tax form For more information on other tax relief for victims of terrorist attacks, see Publication 3920. Amended federal tax form Offer in Compromise In certain circumstances, the IRS will allow you to pay less than the full amount you owe. Amended federal tax form If you think you may qualify, you should submit your offer by filing Form 656, Offer in Compromise. Amended federal tax form The IRS may accept your offer for any of the following reasons: There is doubt about the amount you owe (or whether you owe it). Amended federal tax form There is doubt as to whether you can pay the amount you owe based on your financial situation. Amended federal tax form An economic hardship would result if you had to pay the full amount owed. Amended federal tax form Your case presents compelling reasons that the IRS determines are a sufficient basis for compromise. Amended federal tax form If your offer is rejected, you have 30 days to ask the Appeals Office of the IRS to reconsider your offer. Amended federal tax form The IRS offers fast track mediation services to help taxpayers resolve many issues including a dispute regarding an offer in compromise. Amended federal tax form For more information, see Publication 3605. Amended federal tax form Generally, if you submit an offer in compromise, the IRS will delay certain collection activities. Amended federal tax form The IRS usually will not levy (take) your property to settle your tax bill during the following periods: While the IRS is evaluating your offer in compromise. Amended federal tax form The 30 days immediately after the offer is rejected. Amended federal tax form While your timely-filed appeal is being considered by Appeals. Amended federal tax form Also, if the IRS rejects your original offer and you submit a revised offer within 30 days of the rejection, the IRS generally will not levy your property while it considers your revised offer. Amended federal tax form For more information about submitting an offer in compromise, see Form 656. Amended federal tax form Appeal Rights Because people sometimes disagree on tax matters, the IRS has an appeals system. Amended federal tax form Most differences can be settled within this system without expensive and time-consuming court trials. Amended federal tax form However, your reasons for disagreeing must come within the scope of the tax laws. Amended federal tax form For example, you cannot appeal your case based only on moral, religious, political, constitutional, conscientious, or similar grounds. Amended federal tax form In most instances, you may be eligible to take your case to court if you do not reach an agreement at your appeals conference, or if you do not want to appeal your case to the IRS Office of Appeals. Amended federal tax form See Appeals to the Courts , later, for more information. Amended federal tax form Appeal Within the IRS You can appeal an IRS tax decision to a local Appeals Office, which is separate from and independent of the IRS office taking the action you disagree with. Amended federal tax form The Appeals Office is the only level of appeal within the IRS. Amended federal tax form Conferences with Appeals Office personnel are held in an informal manner by correspondence, by telephone, or at a personal conference. Amended federal tax form If you want an appeals conference, follow the instructions in the letter you received. Amended federal tax form Your request will be sent to the Appeals Office to arrange a conference at a convenient time and place. Amended federal tax form You or your representative should be prepared to discuss all disputed issues at the conference. Amended federal tax form Most differences are settled at this level. Amended federal tax form If agreement is not reached at your appeals conference, you may be eligible to take your case to court. Amended federal tax form See Appeals to the Courts , later. Amended federal tax form Protests and Small Case Requests When you request an Appeals conference, you may also need to file either a formal written protest or a small case request with the office named in the letter you received. Amended federal tax form Also, see the special appeal request procedures in Publication 1660. Amended federal tax form Written protest. Amended federal tax form   You need to file a written protest in the following cases: All employee plan and exempt organization cases without regard to the dollar amount at issue. Amended federal tax form All partnership and S corporation cases without regard to the dollar amount at issue. Amended federal tax form All other cases, unless you qualify for the small case request procedure, or other special appeal procedures such as requesting Appeals consideration of liens, levies, seizures, or installment agreements. Amended federal tax form   If you must submit a written protest, see the instructions in Publication 5 about the information you need to provide. Amended federal tax form The IRS urges you to provide as much information as you can, as it will help speed up your appeal. Amended federal tax form That will save you both time and money. Amended federal tax form    Be sure to send the protest within the time limit specified in the letter you received. Amended federal tax form Small case request. Amended federal tax form   If the total amount for any tax period is not more than $25,000, you may make a small case request instead of filing a formal written protest. Amended federal tax form In figuring the total amount, include a proposed increase or decrease in tax (including penalties), or claimed refund. Amended federal tax form If you are making an offer in compromise, include total unpaid tax, penalty, and interest due. Amended federal tax form For a small case request, follow the instructions in our letter to you by sending a letter: Requesting Appeals consideration, Indicating the changes you do not agree with, and Indicating the reasons why you do not agree. Amended federal tax form Representation You can represent yourself at your appeals conference, or you can be represented by any federally authorized practitioner, including an attorney, a certified public accountant, an enrolled actuary, or an enrolled agent. Amended federal tax form If your representative attends a conference without you, he or she can receive or inspect confidential information only if you have filed a power of attorney or a tax information authorization. Amended federal tax form You can use a Form 2848 or any other properly written power of attorney or authorization. Amended federal tax form You can also bring witnesses to support your position. Amended federal tax form Confidentiality privilege. Amended federal tax form   Generally, the same confidentiality protection that you have with an attorney also applies to certain communications that you have with federally authorized practitioners. Amended federal tax form See Confidentiality privilege under If Your Return Is Examined , earlier. Amended federal tax form Appeals to the Courts If you and the IRS still disagree after the appeals conference, you may be entitled to take your case to the United States Tax Court, the United States Court of Federal Claims, or a United States District Court. Amended federal tax form These courts are independent of the IRS. Amended federal tax form If you elect to bypass the IRS's appeals system, you may be able to take your case to one of the courts listed above. Amended federal tax form However, a case petitioned to the United States Tax Court will normally be considered for settlement by an Appeals Officer before the Tax Court hears the case. Amended federal tax form If you unreasonably fail to pursue the IRS's appeals system, or if your case is intended primarily to cause a delay, or your position is frivolous or groundless, the Tax Court may impose a penalty of up to $25,000. Amended federal tax form See Appeal Within the IRS, earlier. Amended federal tax form Prohibition on requests to taxpayers to give up rights to bring civil action. Amended federal tax form   The Government cannot ask you to waive your right to sue the United States or a Government officer or employee for any action taken in connection with the tax laws. Amended federal tax form However, your right to sue can be waived if: You knowingly and voluntarily waive that right, The request to waive that right is made in writing to your attorney or other federally authorized practitioner, or The request is made in person and your attorney or other representative is present. Amended federal tax form Burden of proof. Amended federal tax form   For court proceedings resulting from examinations started after July 22, 1998, the IRS generally has the burden of proof for any factual issue if you have met the following requirements: You introduced credible evidence relating to the issue. Amended federal tax form You complied with all substantiation requirements of the Internal Revenue Code. Amended federal tax form You maintained all records required by the Internal Revenue Code. Amended federal tax form You cooperated with all reasonable requests by the IRS for information regarding the preparation and related tax treatment of any item reported on your tax return. Amended federal tax form You had a net worth of $7 million or less and not more than 500 employees at the time your tax liability is contested in any court proceeding if your tax return is for a corporation, partnership, or trust. Amended federal tax form    The burden of proof does not change on an issue when another provision of the tax laws requires a specific burden of proof with respect to that issue. Amended federal tax form Use of statistical information. Amended federal tax form   In the case of an individual, the IRS has the burden of proof in court proceedings based on any IRS reconstruction of income solely through the use of statistical information on unrelated taxpayers. Amended federal tax form Penalties. Amended federal tax form   The IRS has the burden of initially producing evidence in court proceedings with respect to the liability of any individual taxpayer for any penalty, addition to tax, or additional amount imposed by the tax laws. Amended federal tax form Recovering litigation or administrative costs. Amended federal tax form   These are the expenses that you pay to defend your position to the IRS or the courts. Amended federal tax form You may be able to recover reasonable litigation or administrative costs if all of the following conditions apply: You are the prevailing party. Amended federal tax form You exhaust all administrative remedies within the IRS. Amended federal tax form Your net worth is below a certain limit (see Net worth requirements , later). Amended federal tax form You do not unreasonably delay the proceeding. Amended federal tax form You apply for administrative costs within 90 days of the date on which the final decision of the IRS Office of Appeals as to the determination of the tax, interest, or penalty was mailed to you. Amended federal tax form You apply for litigation costs within the time frames provided by Tax Court Rule 231, found at http://www. Amended federal tax form ustaxcourt. Amended federal tax form gov  www. Amended federal tax form ustaxcourt. Amended federal tax form gov . Amended federal tax form   Prevailing party, reasonable litigation costs, and reasonable administrative costs are explained later. Amended federal tax form Note. Amended federal tax form If the IRS denies your award of administrative costs, and you want to appeal, you must petition the Tax Court within 90 days of the date on which the IRS mails the denial notice. Amended federal tax form Prevailing party. Amended federal tax form   Generally, you are the prevailing party if: You substantially prevail with respect to the amount in controversy or on the most significant tax issue or set of issues in question, and You meet the net worth requirements, discussed later. Amended federal tax form   You will not be treated as the prevailing party if the United States establishes that its position was substantially justified. Amended federal tax form The position of the United States is presumed not to be substantially justified if the IRS: Did not follow its applicable published guidance (such as regulations, revenue rulings, notices, announcements, private letter rulings, technical advice memoranda, and determination letters issued to the taxpayer) in the proceeding (This presumption can be overcome by evidence. Amended federal tax form ), or Has lost in courts of appeal for other circuits on substantially similar issues. Amended federal tax form   The court will generally decide who is the prevailing party. Amended federal tax form Reasonable litigation costs. Amended federal tax form   These include the following costs: Reasonable court costs. Amended federal tax form The reasonable costs of studies, analyses, engineering reports, tests, or projects found by the court to be necessary for the preparation of your case. Amended federal tax form The reasonable costs of expert witnesses. Amended federal tax form Attorney fees that generally may not exceed $125 maximum hourly rate as set by statute and indexed for inflation. Amended federal tax form See Attorney fees , later. Amended federal tax form Reasonable administrative costs. Amended federal tax form   These include the following costs: Any administrative fees or similar charges imposed by the IRS. Amended federal tax form The reasonable costs of studies, analyses, engineering reports, tests, or projects. Amended federal tax form The reasonable costs of expert witnesses. Amended federal tax form Attorney fees that generally may not exceed $125 per hour. Amended federal tax form See Attorney fees , later. Amended federal tax form Timing of costs. Amended federal tax form    Administrative costs can be awarded for costs incurred after the earliest of: The date the first letter of proposed deficiency is sent that allows you an opportunity to request administrative review in the IRS Office of Appeals, The date you receive notice of the IRS Office of Appeals' decision, or The date of the notice of deficiency. Amended federal tax form Net worth requirements. Amended federal tax form   An individual taxpayer may be able to recover litigation or administrative costs if the following requirements are met: For individuals — your net worth does not exceed $2 million as of the filing date of your petition for review. Amended federal tax form For this purpose, individuals filing a joint return are treated as separate individuals. Amended federal tax form For estates — your net worth does not exceed $2 million as of the date of the decedent's death. Amended federal tax form For charities and certain cooperatives — you do not have more than 500 employees as of the filing date of your petition for review. Amended federal tax form For all other taxpayers — as of the filing date of your petition for review, your net worth does not exceed $7 million, and you must not have more than 500 employees. Amended federal tax form Qualified offer rule. Amended federal tax form    You can also receive reasonable costs and fees and be treated as a prevailing party in a civil action or proceeding if: You make a qualified offer to the IRS to settle your case, The IRS does not accept that offer, and The tax liability (not including interest, unless interest is at issue) later determined by the court is equal to or less than the amount of your qualified offer. Amended federal tax form You must also meet the remaining requirements, including the exhaustion of administrative remedies and the net worth requirement, discussed earlier, to get the benefit of the qualified offer rule. Amended federal tax form Qualified offer. Amended federal tax form    This is a written offer made by you during the qualified offer period. Amended federal tax form It must specify both the offered amount of your liability (not including interest) and that it is a qualified offer. Amended federal tax form   To be a qualified offer, it must remain open from the date it is made until the earliest of: The date it is rejected, The date the trial begins, or 90 days from the date it is made. Amended federal tax form Qualified offer period. Amended federal tax form    This period begins on the day the IRS mails you the first letter of proposed deficiency that allows you to request review by the IRS Office of Appeals. Amended federal tax form It ends 30 days before your case is first set for trial. Amended federal tax form Attorney fees. Amended federal tax form   Attorney fees generally may not exceed $125 maximum hourly rate as set by statute and indexed for inflation. Amended federal tax form However, this amount can be higher in certain limited circumstances depending on the level of difficulty of the issues in the case and the local availability of tax expertise. Amended federal tax form See IRS. Amended federal tax form gov for more information. Amended federal tax form    Attorney fees include the fees paid by a taxpayer for the services of anyone who is authorized to practice before the Tax Court or before the IRS. Amended federal tax form In addition, attorney fees can be awarded in civil actions for unauthorized inspection or disclosure of a taxpayer's return or return information. Amended federal tax form   Fees can be awarded in excess of the actual amount charged if: You are represented for no fee, or for a nominal fee, as a pro bono service, and The award is paid to your representative or to your representative's employer. Amended federal tax form Jurisdiction for determination of employment status. Amended federal tax form    The Tax Court can review IRS employment status determinations (for example, whether individuals hired by you are in fact your employees or independent contractors) and the amount of employment tax under such determinations. Amended federal tax form Tax Court review can take place only if, in connection with an audit of any person, there is a controversy involving a determination by the IRS that either: One or more individuals performing services for that person are employees of that person, or That person is not entitled to relief under Section 530(a) of the Revenue Act of 1978 (discussed later). Amended federal tax form   The following rules also apply to a Tax Court review of employment status: A Tax Court petition to review these determinations can be filed only by the person for whom the services are performed, If you receive a Notice of Determination by certified or registered mail, you must file a petition for Tax Court review within 90 days of the date of mailing that notice (150 days if the notice is addressed to you outside the United States), If during the Tax Court proceeding, you begin to treat as an employee an individual whose employment status is at issue, the Tax Court will not consider that change in its decision, Assessment and collection of tax is suspended while the Tax Court review is taking place, Payment of the asserted employment tax deficiency is not required to petition the U. Amended federal tax form S. Amended federal tax form Tax Court for a determination of employment status. Amended federal tax form There can be a de novo review by the Tax Court (a review which does not consider IRS administrative findings), and At your request and with the Tax Court's agreement, small tax case procedures (discussed later) are available to simplify the case resolution process when the amount at issue (including additions to tax and penalties) is $50,000 or less for each tax period involved. Amended federal tax form   For further information, see Publication 3953, Questions and Answers About Tax Court Proceedings for Determination of Employment Status Under IRC Section 7436. Amended federal tax form Section 530(a) of the Revenue Act of 1978. Amended federal tax form   This section relieves an employer of certain employment tax responsibilities for individuals not treated as employees. Amended federal tax form It also provides relief to taxpayers under audit or involved in administrative or judicial proceedings. Amended federal tax form Tax Court review of request for relief from joint and several liability on a joint return. Amended federal tax form    As discussed later, at Relief from joint and several liability on a joint return under Claims for Refund, you can request relief from liability for tax you owe, plus related penalties and interest, that you believe should be paid by your spouse (or former spouse). Amended federal tax form You also can petition (ask) the Tax Court to review your request for innocent spouse relief or separation of liability if either: The IRS sends you a determination notice denying, in whole or in part, your request, or You do not receive a determination notice from the IRS within 6 months from the date you file Form 8857. Amended federal tax form   If you receive a determination notice, you must petition the Tax Court to review your request during the 90-day period that begins on the date the IRS mails the notice. Amended federal tax form See Publication 971 for more information. Amended federal tax form Note. Amended federal tax form Your spouse or former spouse may file a written protest and request an Appeals conference to protest your claim of innocent spouse relief or separation of liability. Amended federal tax form See Rev. Amended federal tax form Proc. Amended federal tax form 2003-19, which is on page 371 of the Internal Revenue Bulletin 2003-5 at  www. Amended federal tax form irs. Amended federal tax form gov/pub/irs-irbs/irb03-05. Amended federal tax form pdf. Amended federal tax form Tax Court You can take your case to the United States Tax Court if you disagree with the IRS over: Income tax, Estate tax, Gift tax, Employment tax involving IRS employment status determinations, or Certain excise taxes of private foundations, public charities, qualified pension and other retirement plans, or real estate investment trusts. Amended federal tax form For information on Tax Court review of a determination of employment status, see Jurisdiction for determination of employment status, earlier. Amended federal tax form For information on Tax Court review of an IRS refusal to abate interest, see Tax Court can review failure to abate interest, earlier under Examination of Returns. Amended federal tax form For information on Tax Court review of Appeals determinations with respect to lien notices and proposed levies, see Publication 1660. Amended federal tax form You cannot take your case to the Tax Court before the IRS sends you a notice of deficiency. Amended federal tax form You can only appeal your case if you file a petition within 90 days from the date the notice is mailed to you (150 days if it is addressed to you outside the United States). Amended federal tax form The notice will show the 90th (or 150th) day by which you must file your petition with the Tax Court. Amended federal tax form Withdrawal of notice of deficiency. Amended federal tax form If you consent, the IRS can withdraw a notice of deficiency. Amended federal tax form A notice of deficiency may be rescinded if the notice was issued as a result of an administrative error; the taxpayer submits information establishing the actual tax due is less than the amount shown in the notice; the taxpayer specifically requests a conference with the appropriate Appeals office for the purpose of entering into settlement negotiations. Amended federal tax form However, the notice may be rescinded only if the appropriate Appeals office first decides that the case is susceptible to agreement. Amended federal tax form See Revenue Procedure 98-54 for a more detailed explanation of the requirements. Amended federal tax form Once withdrawn, the limits on credits, refunds, and assessments concerning the notice are void, and you and the IRS have the rights and obligations that you had before the notice was issued. Amended federal tax form The suspension of any time limitation while the notice of deficiency was issued will not change when the notice is withdrawn. Amended federal tax form After the notice is withdrawn, you cannot file a petition with the Tax Court based on the notice. Amended federal tax form Also, the IRS can later issue a notice of deficiency in a greater or lesser amount than the amount in the withdrawn deficiency. Amended federal tax form Generally, the Tax Court hears cases before any tax has been assessed and paid; however, you can pay the tax after the notice of deficiency has been issued and still petition the Tax Court for review. Amended federal tax form If you do not file your petition on time, the proposed tax will be assessed, a bill will be sent, and you will not be able to take your case to the Tax Court. Amended federal tax form Under the law, you must pay the tax within 21 days (10 business days if the amount is $100,000 or more). Amended federal tax form Collection can proceed even if you think that the amount is excessive. Amended federal tax form Publication 594 explains IRS collection procedures. Amended federal tax form If you filed your petition on time, the court will schedule your case for trial at a location convenient to you. Amended federal tax form You can represent yourself before the Tax Court or you can be represented by anyone admitted to practice before that court. Amended federal tax form Small tax case procedure. Amended federal tax form   If the amount in your case is $50,000 or less for any 1 tax year or period, you can request that your case be handled under the small tax case procedure. Amended federal tax form If the Tax Court approves, you can present your case to the Tax Court for a decision that is final and that you cannot appeal. Amended federal tax form You can get more information regarding the small tax case procedure and other Tax Court matters from the United States Tax Court, 400 Second Street, N. Amended federal tax form W. Amended federal tax form , Washington, DC 20217. Amended federal tax form More information can be found on the Tax Court's website at www. Amended federal tax form ustaxcourt. Amended federal tax form gov. Amended federal tax form Motion to request redetermination of interest. Amended federal tax form   In certain cases, you can file a motion asking the Tax Court to redetermine the amount of interest on either an underpayment or an overpayment. Amended federal tax form You can do this only in a situation that meets all of the following requirements: The IRS has assessed a deficiency that was determined by the Tax Court. Amended federal tax form The assessment included interest. Amended federal tax form You have paid the entire amount of the deficiency plus the interest claimed by the IRS. Amended federal tax form The Tax Court has found that you made an overpayment. Amended federal tax form You must file the motion within one year after the decision of the Tax Court becomes final. Amended federal tax form District Court and Court of Federal Claims Generally, the District Courts and the Court of Federal Claims hear tax cases only after you have paid the entire tax and penalties, and filed a claim for a credit or refund. Amended federal tax form The taxpayer may litigate certain types of employment tax cases in either the United States District Court or the United States Court of Federal Claims. Amended federal tax form Before taxpayers can initiate suit in either of these courts with respect to certain employment taxes, they will have to pay, at a minimum, the employment tax assessment attributable to one employee for any one quarter and file a claim for refund of the tax. Amended federal tax form Once the claim for refund is denied or 6 months elapse without any action by the IRS, the taxpayer may initiate suit. Amended federal tax form As explained later under Claims for Refund, you can file a claim with the IRS for a credit or refund if you think that the tax you paid is incorrect or excessive. Amended federal tax form If your claim is totally or partially disallowed by the IRS, you should receive a notice of claim disallowance. Amended federal tax form If the IRS does not act on your claim within 6 months from the date you filed it, you can then file suit for a refund. Amended federal tax form You generally must file suit for a credit or refund no later than 2 years after the IRS informs you that your claim has been rejected. Amended federal tax form However, you can file suit if it has been 6 months since you filed your claim and the IRS has not yet delivered a decision. Amended federal tax form You can file suit for a credit or refund in your United States District Court or in the United States Court of Federal Claims. Amended federal tax form However, you cannot appeal to the United States Court of Federal Claims if your claim is for credit or refund of a penalty that relates to promoting an abusive tax shelter or to aiding and abetting the understatement of tax liability on someone else's return. Amended federal tax form For information about procedures for filing suit in either court, contact the Clerk of your District Court or of the United States Court of Federal Claims. Amended federal tax form Refund or Credit of Overpayments Before Final Determination Any court with proper jurisdiction, including the Tax Court, can order the IRS to refund any part of a tax deficiency that the IRS collects from you during a period when the IRS is not permitted to assess that deficiency, or to levy or engage in any court proceeding to collect that deficiency. Amended federal tax form In addition, the court can order a refund of any part of an overpayment determined by the Tax Court that is not at issue on appeal to a higher court. Amended federal tax form The court can order these refunds before its decision on the case is final. Amended federal tax form Taxpayers should thoroughly review IRS settlement offers before signing a Tax Court Decision document to ensure that all adjustments are correct, including the inclusion of any tax credits that the taxpayer is allowed to claim. Amended federal tax form Note. Amended federal tax form The court may no longer order a refund of an overpayment after the case is final. Amended federal tax form Generally, the IRS is not permitted to take action on a tax deficiency during: The 90-day (or 150-day if outside the United States) period that you have to petition a notice of deficiency to the Tax Court, or The period that the case is under appeal if a bond is provided. Amended federal tax form Claims for Refund If you believe you have overpaid your tax, you have a limited amount of time in which to file a claim for a credit or refund. Amended federal tax form You can claim a credit or refund by filing Form 1040X. Amended federal tax form See Time for Filing a Claim for Refund , later. Amended federal tax form File your claim by mailing it to the IRS Service Center where you filed your original return. Amended federal tax form File a separate form for each year or period involved. Amended federal tax form Include an explanation of each item of income, deduction, or credit on which you are basing your claim. Amended federal tax form Corporations should file Form 1120X, Amended U. Amended federal tax form S. Amended federal tax form Corporation Income Tax Return, or other form appropriate to the type of credit or refund claimed. Amended federal tax form See Publication 3920 for information on filing claims for tax forgiveness for individuals affected by terrorist attacks. Amended federal tax form Requesting a copy of your tax return. Amended federal tax form   You can obtain a copy of the actual return and all attachments you filed with the IRS for an earlier year. Amended federal tax form This includes a copy of the Form W-2 or Form 1099 filed with your return. Amended federal tax form Use Form 4506 to make your request. Amended federal tax form You will be charged a fee, which you must pay when you submit Form 4506. Amended federal tax form Requesting a copy of your tax account information. Amended federal tax form   Use Form 4506-T, Request for Transcript of Tax Return, to request free copies of your tax return transcript, tax account transcript, record of account, verification of nonfiling, or Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript. Amended federal tax form The tax return transcript contains most of the line items of a tax return. Amended federal tax form A tax account transcript contains information on the financial status of the account, such as payments, penalty assessments, and adjustments. Amended federal tax form A record of account is a combination of line item information and later adjustments to the account. Amended federal tax form Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript contains data from these information returns. Amended federal tax form Penalty for erroneous claim for refund. Amended federal tax form   If you claim an excessive amount of tax refund or credit relating to income tax (other than a claim relating to the earned income credit), you may be liable for a penalty of 20% of the amount that is determined to be excessive. Amended federal tax form An excessive amount is the amount of the claim for refund or credit that is more than the amount of claim allowable for the tax year. Amended federal tax form The penalty may be waived if you can show that you had a reasonable basis for making the claim. Amended federal tax form Time for Filing a Claim for Refund Generally, you must file a claim for a credit or refund within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. Amended federal tax form If you do not file a claim within this period, you may no longer be entitled to a credit or a refund. Amended federal tax form If the due date to file a return or a claim for a credit or refund is a Saturday, Sunday, or legal holiday, it is filed on time if it is filed on the next business day. Amended federal tax form Returns you filed before the due date are considered filed on the due date. Amended federal tax form This is true even when the due date is a Saturday, Sunday, or legal holiday. Amended federal tax form Disaster area claims for refund. Amended federal tax form   If you live in a Presidentially declared disaster area or are affected by terroristic or military action, the deadline to file a claim for a refund may be postponed. Amended federal tax form This section discusses the special rules that apply to Presidentially declared disaster area refunds. Amended federal tax form    A Presidentially declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Disaster Relief and Emergency Assistance Act. Amended federal tax form Postponed refund deadlines. Amended federal tax form   The IRS may postpone for up to 1 year the deadlines for filing a claim for refund. Amended federal tax form The postponement can be used by taxpayers who are affected by a Presidentially declared disaster. Amended federal tax form The IRS may also postpone deadlines for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. Amended federal tax form For more information, see Publication 547. Amended federal tax form   If any deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin. Amended federal tax form A list of the areas eligible for assistance under the Disaster Relief and Emergency Assistance Act is available at the Federal Emergency Management Agency (FEMA) website at www. Amended federal tax form fema. Amended federal tax form gov and at the IRS website at www. Amended federal tax form irs. Amended federal tax form gov. Amended federal tax form Nonfilers can get refund of overpayments paid within 3-year period. Amended federal tax form   The Tax Court can consider taxes paid during the 3-year period preceding the date of a notice of deficiency for determining any refund due to a nonfiler. Amended federal tax form This means that if you do not file your return, and you receive a notice of deficiency in the third year after the due date (with extensions) of your return and file suit with the Tax Court to contest the notice of deficiency, you may be able to receive a refund of excessive amounts paid within the 3-year period preceding the date of the notice of deficiency. Amended federal tax form The IRS may postpone for up to 1 year certain tax deadlines, including the time for filing claims for refund, for taxpayers who are affected by a terrorist attack occurring after September 10, 2001. Amended federal tax form For more information, see Publication 3920. Amended federal tax form Claim for refund by estates electing the installment method of payment. Amended federal tax form   In certain cases where an estate has elected to make tax payments through the installment method, the executor can file a suit for refund with a U. Amended federal tax form S. Amended federal tax form District Court or the U. Amended federal tax form S. Amended federal tax form Court of Federal Claims before all the installment payments have been made. Amended federal tax form However, all the following must be true before a suit can be filed: The estate consists largely of an interest in a closely-held business. Amended federal tax form All installment payments due on or before the date the suit is filed have been made. Amended federal tax form No accelerated installment payments have been made. Amended federal tax form No Tax Court case is pending with respect to any estate tax liability. Amended federal tax form If a notice of deficiency was issued to the estate regarding its liability for estate tax, the time for petitioning the Tax Court has passed. Amended federal tax form No proceeding is pending for a declaratory judgment by the Tax Court on whether the estate is eligible to pay tax in installments. Amended federal tax form The executor has not included any previously litigated issues in the current suit for refund. Amended federal tax form The executor does not discontinue making installment payments timely, while the court considers the suit for refund. Amended federal tax form    If in its final decision on the suit for refund the court redetermines the estate's tax liability, the IRS must refund any part of the estate tax amount that is disallowed. Amended federal tax form This includes any part of the disallowed amount previously collected by the IRS. Amended federal tax form Protective claim for refund. Amended federal tax form   If your right to a refund is contingent on future events and may not be determinable until after the time period for filing a claim for refund expires, you can file a protective claim for refund. Amended federal tax form A protective claim can be either a formal claim or an amended return for credit or refund. Amended federal tax form Protective claims are often based on current litigation or expected changes in the tax law, other legislation, or regulations. Amended federal tax form A protective claim preserves your right to claim a refund when the contingency is resolved. Amended federal tax form A protective claim does not have to state a particular dollar amount or demand an immediate refund. Amended federal tax form However, to be valid, a protective claim must: Be in writing and be signed, Include your name, address, social security number or individual taxpayer identification number, and other contact information, Identify and describe the contingencies affecting the claim, Clearly alert the IRS to the essential nature of the claim, and Identify the specific year(s) for which a refund is sought. Amended federal tax form   Generally, the IRS will delay action on the protective claim until the contingency is resolved. Amended federal tax form Once the contingency is resolved, the IRS may obtain additional information necessary to process the claim and then either allow or disallow the claim. Amended federal tax form   Mail your protective claim for refund to the address listed in the instructions for Form 1040X, under Where To File. Amended federal tax form Exceptions The limits on your claim for refund can be affected by the type of item that forms the basis of your claim. Amended federal tax form Special refunds. Amended federal tax form   If you file a claim for refund based on one of the items listed below, the limits discussed earlier under Time for Filing a Claim for Refund may not apply. Amended federal tax form These special items are: A bad debt, A worthless security, A payment or accrual of foreign tax, A net operating loss carryback, and A carryback of certain tax credits. Amended federal tax form   The limits discussed earlier also may not apply if you have signed an agreement to extend the period of assessment of tax. Amended federal tax form For information on special rules on filing claims for an individual affected by a terrorist attack, see Publication 3920. Amended federal tax form Periods of financial disability. Amended federal tax form   If you are an individual (not a corporation or other taxpaying entity), the period of limitations on credits and refunds can be suspended during periods when you cannot manage your financial affairs because of physical or mental impairment that is medically determinable and either: Has lasted or can be expected to last continuously for at least 12 months, or Can be expected to result in death. Amended federal tax form    The period for filing a claim for refund will not be suspended for any time that someone else, such as your spouse or guardian, was authorized to act for you in financial matters. Amended federal tax form   To claim financial disability, you generally must submit the following statements with your claim for credit or refund: A written statement signed by a physician, qualified to make the determination, that sets forth: The name and a description of your physical or mental impairment, The physician's medical opinion that your physical or mental impairment prevented you from managing your financial affairs, The physician's medical opinion that your physical or mental impairment was or can be expected to result in death, or that it has lasted (or can be expected to last) for a continuous period of not less than 12 months, and To the best of the physician's knowledge, the specific time period during which you were prevented by such physical or mental impairment from managing your financial affairs, and A written statement by the person signing the claim for credit or refund that no person, including your spouse, was authorized to act on your behalf in financial matters during the period described in paragraph (1)(d) of the physician's statement. Amended federal tax form Alternatively, if a person was authorized to act on your behalf in financial matters during any part of the period described in that paragraph, the beginning and ending dates of the period of time the person was so authorized. Amended federal tax form    The period of limitations will not be suspended on any claim for refund that (without regard to this provision) was barred as of July 22, 1998. Amended federal tax form Limit on Amount of Refund If you file your claim within 3 years after filing your return, the credit or refund cannot be more than the part of the tax paid wi
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The Amended Federal Tax Form

Amended federal tax form 1. Amended federal tax form   Investment Income Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: General InformationSSN for joint account. Amended federal tax form Custodian account for your child. Amended federal tax form Penalty for failure to supply SSN. Amended federal tax form Certification. Amended federal tax form Underreported interest and dividends. Amended federal tax form How to stop backup withholding due to underreporting. Amended federal tax form How to stop backup withholding due to an incorrect identification number. Amended federal tax form Reporting backup withholding. Amended federal tax form Nonresident aliens. Amended federal tax form Penalties. Amended federal tax form Savings account with parent as trustee. Amended federal tax form Interest IncomeInterest not reported on Form 1099-INT. Amended federal tax form Nominees. Amended federal tax form Incorrect amount. Amended federal tax form Information reporting requirement. Amended federal tax form Taxable Interest — General Below-Market Loans U. Amended federal tax form S. Amended federal tax form Savings Bonds U. Amended federal tax form S. Amended federal tax form Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Discount on Debt InstrumentsOriginal Issue Discount (OID) Market Discount Bonds Discount on Short-Term Obligations Election To Report All Interest as OID When To Report Interest IncomeConstructive receipt. Amended federal tax form How To Report Interest IncomeSchedule B (Form 1040A or 1040). Amended federal tax form Worksheet for savings bonds distributed from a retirement or profit-sharing plan. Amended federal tax form File Form 1099-INT with the IRS. Amended federal tax form Dividends and Other DistributionsDividends not reported on Form 1099-DIV. Amended federal tax form Nominees. Amended federal tax form Ordinary Dividends Capital Gain Distributions Nondividend Distributions Liquidating Distributions Distributions of Stock and Stock Rights Other Distributions How To Report Dividend IncomeElection. Amended federal tax form Independent contractor. Amended federal tax form Investment interest deducted. Amended federal tax form Exception 1. Amended federal tax form Exception 2. Amended federal tax form Undistributed capital gains. Amended federal tax form File Form 1099-DIV with the IRS. Amended federal tax form Stripped Preferred Stock REMICs, FASITs, and Other CDOsREMICs Collateralized Debt Obligations (CDOs) FASITs S CorporationsLimit on losses and deductions. Amended federal tax form Passive activity losses. Amended federal tax form Form 8582. Amended federal tax form Investment ClubsInvestments in name of member. Amended federal tax form Tax Treatment of the Club Topics - This chapter discusses: Interest Income , Discount on Debt Instruments , When To Report Interest Income , How To Report Interest Income , Dividends and Other Distributions , How To Report Dividend Income , Stripped Preferred Stock , Real estate mortgage investment conduits (REMICs), financial asset securitization investment trusts (FASITs), and other collateralized debt obligations (CDOs) , S Corporations , and Investment Clubs . Amended federal tax form Useful Items - You may want to see: Publication 525 Taxable and Nontaxable Income 537 Installment Sales 590 Individual Retirement Arrangements (IRAs) 925 Passive Activity and At-Risk Rules 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends Schedule D (Form 1040) Capital Gains and Losses 1040 U. Amended federal tax form S. Amended federal tax form Individual Income Tax Return 1040A U. Amended federal tax form S. Amended federal tax form Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1099 General Instructions for Certain Information Returns 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains 3115 Application for Change in Accounting Method 6251 Alternative Minimum Tax — Individuals 8582 Passive Activity Loss Limitations 8615 Tax for Certain Children Who Have Unearned Income 8814 Parents' Election To Report Child's Interest and Dividends 8815 Exclusion of Interest From Series EE and I U. Amended federal tax form S. Amended federal tax form Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. Amended federal tax form S. Amended federal tax form Savings Bonds Issued After 1989 8824 Like-Kind Exchanges 8949 Sales and Other Dispositions of Capital Assets 8960 Net Investment Income Tax—Individuals, Estates, and Trusts See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Amended federal tax form General Information A few items of general interest are covered here. Amended federal tax form Recordkeeping. Amended federal tax form You should keep a list showing sources and investment income amounts you receive during the year. Amended federal tax form Also keep the forms you receive showing your investment income (Forms 1099-INT, Interest Income, and 1099-DIV, Dividends and Distributions, for example) as an important part of your records. Amended federal tax form Net investment income tax (NIIT). Amended federal tax form   Beginning in 2013, you may be subject to the NIIT. Amended federal tax form The NIIT is a 3. Amended federal tax form 8% tax on the lesser of your net investment income or the amount of your modified adjusted gross income (MAGI) that is over a threshold amount based on your filing status. Amended federal tax form    Filing Status Threshold Amount Married filing jointly $250,000 Married filing separately $125,000 Single $200,000 Head of household (with qualifying person) $200,000 Qualifying Widow(er) with dependent child $250,000    For more information, see Form 8960 and Instructions for Form 8960. Amended federal tax form Tax on unearned income of certain children. Amended federal tax form   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Amended federal tax form This may happen if all of the following are true. Amended federal tax form The child had more than $2,000 of unearned income. Amended federal tax form The child is required to file a tax return. Amended federal tax form The child was: Under age 18 at the end of 2013, Age 18 at the end of 2013 and did not have earned income that was more than half of the child's support, or A full-time student over age 18 and under age 24 at the end of 2013 and did not have earned income that was more than half of the child's support. Amended federal tax form At least one of the child's parents was alive at the end of 2013. Amended federal tax form The child does not file a joint return for 2013. Amended federal tax form A child born on January 1, 1996, is considered to be age 18 at the end of 2013; a child born on January 1, 1995, is considered to be age 19 at the end of 2013; a child born on January 1, 1990, is considered to be age 24 at the end of 2013. Amended federal tax form   If all of these statements are true, Form 8615 must be completed and attached to the child's tax return. Amended federal tax form If any of these statements is not true, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Amended federal tax form    However, the parent can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Amended federal tax form Use Form 8814 for this purpose. Amended federal tax form   For more information about the tax on unearned income of children and the parents' election, see Publication 929, Tax Rules for Children and Dependents. Amended federal tax form Beneficiary of an estate or trust. Amended federal tax form   Interest, dividends, and other investment income you receive as a beneficiary of an estate or trust is generally taxable income. Amended federal tax form You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Amended federal tax form , from the fiduciary. Amended federal tax form Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Amended federal tax form Social security number (SSN). Amended federal tax form   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. Amended federal tax form This includes payers of interest and dividends. Amended federal tax form If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. Amended federal tax form SSN for joint account. Amended federal tax form   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. Amended federal tax form (For information on who owns the funds in a joint account, see Joint accounts , later. Amended federal tax form ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. Amended federal tax form This is because only one name and SSN can be shown on Form 1099. Amended federal tax form   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. Amended federal tax form For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. Amended federal tax form Custodian account for your child. Amended federal tax form   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. Amended federal tax form For example, you must give your child's SSN to the payer of dividends on stock owned by your child, even though the dividends are paid to you as custodian. Amended federal tax form Penalty for failure to supply SSN. Amended federal tax form   You will be subject to a penalty if, when required, you fail to: Include your SSN on any return, statement, or other document, Give your SSN to another person who must include it on any return, statement, or other document, or Include the SSN of another person on any return, statement, or other document. Amended federal tax form The penalty is $50 for each failure up to a maximum penalty of $100,000 for any calendar year. Amended federal tax form   You will not be subject to this penalty if you can show that your failure to provide the SSN was due to reasonable cause and not to willful neglect. Amended federal tax form   If you fail to supply an SSN, you may also be subject to backup withholding. Amended federal tax form Backup withholding. Amended federal tax form   Your investment income is generally not subject to regular withholding. Amended federal tax form However, it may be subject to backup withholding to ensure that income tax is collected on the income. Amended federal tax form Under backup withholding, the bank, broker, or other payer of interest, original issue discount (OID), dividends, cash patronage dividends, or royalties must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Amended federal tax form   Backup withholding applies if: You do not give the payer your identification number (either a social security number or an employer identification number) in the required manner, The IRS notifies the payer that you gave an incorrect identification number, The IRS notifies the payer that you are subject to backup withholding on interest or dividends because you have underreported interest or dividends on your income tax return, or You are required, but fail, to certify that you are not subject to backup withholding for the reason described in (3). Amended federal tax form Certification. Amended federal tax form   For new accounts paying interest or dividends, you must certify under penalties of perjury that your SSN is correct and that you are not subject to backup withholding. Amended federal tax form Your payer will give you a Form W-9, Request for Taxpayer Identification Number and Certification, or similar form, to make this certification. Amended federal tax form If you fail to make this certification, backup withholding may begin immediately on your new account or investment. Amended federal tax form Underreported interest and dividends. Amended federal tax form   You will be considered to have underreported your interest and dividends if the IRS has determined for a tax year that: You failed to include any part of a reportable interest or dividend payment required to be shown on your return, or You were required to file a return and to include a reportable interest or dividend payment on that return, but you failed to file the return. Amended federal tax form How to stop backup withholding due to underreporting. Amended federal tax form   If you have been notified that you underreported interest or dividends, you can request a determination from the IRS to prevent backup withholding from starting or to stop backup withholding once it has begun. Amended federal tax form You must show that at least one of the following situations applies. Amended federal tax form No underreporting occurred. Amended federal tax form You have a bona fide dispute with the IRS about whether underreporting occurred. Amended federal tax form Backup withholding will cause or is causing an undue hardship, and it is unlikely that you will underreport interest and dividends in the future. Amended federal tax form You have corrected the underreporting by filing a return if you did not previously file one and by paying all taxes, penalties, and interest due for any underreported interest or dividend payments. Amended federal tax form   If the IRS determines that backup withholding should stop, it will provide you with a certification and will notify the payers who were sent notices earlier. Amended federal tax form How to stop backup withholding due to an incorrect identification number. Amended federal tax form   If you have been notified by a payer that you are subject to backup withholding because you have provided an incorrect SSN or employer identification number, you can stop it by following the instructions the payer gives you. Amended federal tax form Reporting backup withholding. Amended federal tax form   If backup withholding is deducted from your interest or dividend income or other reportable payment, the bank or other business must give you an information return for the year (for example, a Form 1099-INT) indicating the amount withheld. Amended federal tax form The information return will show any backup withholding as “Federal income tax withheld. Amended federal tax form ” Nonresident aliens. Amended federal tax form    Generally, payments made to nonresident aliens are not subject to backup withholding. Amended federal tax form You can use Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, to certify exempt status. Amended federal tax form However, this does not exempt you from the 30% (or lower treaty) withholding rate that may apply to your investment income. Amended federal tax form For information on the 30% rate, see Publication 519, U. Amended federal tax form S. Amended federal tax form Tax Guide for Aliens. Amended federal tax form Penalties. Amended federal tax form   There are civil and criminal penalties for giving false information to avoid backup withholding. Amended federal tax form The civil penalty is $500. Amended federal tax form The criminal penalty, upon conviction, is a fine of up to $1,000, or imprisonment of up to 1 year, or both. Amended federal tax form Where to report investment income. Amended federal tax form   Table 1-1 gives an overview of the forms and schedules to use to report some common types of investment income. Amended federal tax form But see the rest of this publication for detailed information about reporting investment income. Amended federal tax form Joint accounts. Amended federal tax form   If two or more persons hold property (such as a savings account, bond, or stock) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest or dividends from the property is determined by local law. Amended federal tax form Community property states. Amended federal tax form   If you are married and receive a distribution that is community income, one-half of the distribution is generally considered to be received by each spouse. Amended federal tax form If you file separate returns, you must each report one-half of any taxable distribution. Amended federal tax form See Publication 555, Community Property, for more information on community income. Amended federal tax form   If the distribution is not considered community property and you and your spouse file separate returns, each of you must report your separate taxable distributions. Amended federal tax form Example. Amended federal tax form You and your spouse have a joint money market account. Amended federal tax form Under state law, half the income from the account belongs to you, and half belongs to your spouse. Amended federal tax form If you file separate returns, you each report half the income. Amended federal tax form Income from property given to a child. Amended federal tax form   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. Amended federal tax form   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. Amended federal tax form Savings account with parent as trustee. Amended federal tax form   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. Amended federal tax form The savings account legally belongs to the child. Amended federal tax form The parents are not legally permitted to use any of the funds to support the child. Amended federal tax form Table 1-1. Amended federal tax form Where To Report Common Types of Investment Income (For detailed information about reporting investment income, see the rest of this publication, especially How To Report Interest Income and How To Report Dividend Income in chapter 1. Amended federal tax form ) Type of Income If you file Form 1040, report on . Amended federal tax form . Amended federal tax form . Amended federal tax form If you can file Form 1040A, report on . Amended federal tax form . Amended federal tax form . Amended federal tax form If you can file Form 1040EZ, report on . Amended federal tax form . Amended federal tax form . Amended federal tax form Tax-exempt interest (Form 1099-INT, box 8) Line 8b Line 8b Space to the left of line 2 (enter “TEI” and the amount) Taxable interest that totals $1,500 or less Line 8a (You may need to file Schedule B as well. Amended federal tax form ) Line 8a (You may need to file Schedule B as well. Amended federal tax form ) Line 2 Taxable interest that totals more than $1,500 Line 8a; also use Schedule B, line 1 Line 8a; also use Schedule B, line 1   Savings bond interest you will exclude because of higher education expenses Schedule B; also use Form 8815 Schedule B; also use Form 8815   Ordinary dividends that total $1,500 or less Line 9a (You may need to file Schedule B as well. Amended federal tax form ) Line 9a (You may need to file Schedule B as well. Amended federal tax form )   Ordinary dividends that total more than $1,500 Line 9a; also use Schedule B, line 5 Line 9a; also use Schedule B, line 5   Qualified dividends (if you do not have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2 Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 2   Qualified dividends (if you have to file Schedule D) Line 9b; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, line 2 You cannot use Form 1040A    You cannot use Form 1040EZ Capital gain distributions (if you do not have to file Schedule D) Line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3 Line 10; also use the Qualified Dividends and Capital Gain Tax Worksheet, line 3   Capital gain distributions (if you have to file Schedule D) Schedule D, line 13; also use the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     Section 1250, 1202, or collectibles gain (Form 1099-DIV, box 2b, 2c, or 2d) Form 8949 and Schedule D     Nondividend distributions (Form 1099-DIV, box 3) Generally not reported*     Undistributed capital gains (Form 2439, boxes 1a - 1d) Schedule D     Gain or loss from sales of stocks or bonds Line 13; also use Form 8949, Schedule D, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet You cannot use Form 1040A   Gain or loss from exchanges of like-kind investment property Line 13; also use Schedule D, Form 8824, and the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet     *Report any amounts in excess of your basis in your mutual fund shares on Form 8949. Amended federal tax form Use Part II if you held the shares more than 1 year. Amended federal tax form Use Part I if you held your mutual fund shares 1 year or less. Amended federal tax form For details on Form 8949, see Reporting Capital Gains and Losses in chapter 4, and the Instructions for Form 8949. Amended federal tax form Accuracy-related penalty. Amended federal tax form   An accuracy-related penalty of 20% can be charged for underpayments of tax due to negligence or disregard of rules or regulations or substantial understatement of tax. Amended federal tax form For information on the penalty and any interest that applies, see Penalties in chapter 2. Amended federal tax form Interest Income This section discusses the tax treatment of different types of interest income. Amended federal tax form In general, any interest that you receive or that is credited to your account and can be withdrawn is taxable income. Amended federal tax form (It does not have to be entered in your passbook. Amended federal tax form ) Exceptions to this rule are discussed later. Amended federal tax form Form 1099-INT. Amended federal tax form   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. Amended federal tax form This form shows you the interest you received during the year. Amended federal tax form Keep this form for your records. Amended federal tax form You do not have to attach it to your tax return. Amended federal tax form   Report on your tax return the total interest income you receive for the tax year. Amended federal tax form Interest not reported on Form 1099-INT. Amended federal tax form   Even if you do not receive Form 1099-INT, you must still report all of your interest income. Amended federal tax form For example, you may receive distributive shares of interest from partnerships or S corporations. Amended federal tax form This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Amended federal tax form , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Amended federal tax form Nominees. Amended federal tax form   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. Amended federal tax form   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on Nominee distributions , later, under How To Report Interest Income. Amended federal tax form Incorrect amount. Amended federal tax form   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Amended federal tax form The new Form 1099-INT you receive will be marked “Corrected. Amended federal tax form ” Form 1099-OID. Amended federal tax form   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. Amended federal tax form For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. Amended federal tax form Exempt-interest dividends. Amended federal tax form   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Amended federal tax form (However, see Information reporting requirement , next. Amended federal tax form ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Amended federal tax form You do not reduce your basis for distributions that are exempt-interest dividends. Amended federal tax form Information reporting requirement. Amended federal tax form   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. Amended federal tax form This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. Amended federal tax form See How To Report Interest Income , later. Amended federal tax form Note. Amended federal tax form Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Amended federal tax form The exempt-interest dividends subject to the alternative minimum tax are shown in box 11 of Form 1099-DIV. Amended federal tax form See Form 6251 and its instructions for more information about this tax. Amended federal tax form Private activity bonds are discussed later under State or Local Government Obligations. Amended federal tax form Interest on VA dividends. Amended federal tax form   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. Amended federal tax form This includes interest paid on dividends on converted United States Government Life Insurance policies and on National Service Life Insurance policies. Amended federal tax form Individual retirement arrangements (IRAs). Amended federal tax form   Interest on a Roth IRA generally is not taxable. Amended federal tax form Interest on a traditional IRA is tax deferred. Amended federal tax form You generally do not include it in your income until you make withdrawals from the IRA. Amended federal tax form See Publication 590 for more information. Amended federal tax form Taxable Interest — General Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. Amended federal tax form The following are some sources of taxable interest. Amended federal tax form Dividends that are actually interest. Amended federal tax form   Certain distributions commonly called dividends are actually interest. Amended federal tax form You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. Amended federal tax form  The “dividends” will be shown as interest income on Form 1099-INT. Amended federal tax form Money market funds. Amended federal tax form   Money market funds are offered by nonbank financial institutions such as mutual funds and stock brokerage houses, and pay dividends. Amended federal tax form Generally, amounts you receive from money market funds should be reported as dividends, not as interest. Amended federal tax form Certificates of deposit and other deferred interest accounts. Amended federal tax form   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. Amended federal tax form You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. Amended federal tax form The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. Amended federal tax form If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. Amended federal tax form Interest subject to penalty for early withdrawal. Amended federal tax form   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. Amended federal tax form You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. Amended federal tax form See Penalty on early withdrawal of savings under How To Report Interest Income, later, for more information on how to report the interest and deduct the penalty. Amended federal tax form Money borrowed to invest in certificate of deposit. Amended federal tax form   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. Amended federal tax form You must report the total interest you earn on the certificate in your income. Amended federal tax form If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. Amended federal tax form See Interest Expenses in chapter 3. Amended federal tax form Example. Amended federal tax form You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. Amended federal tax form The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. Amended federal tax form The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. Amended federal tax form The bank also gives you a statement showing that you paid $310 interest for 2013. Amended federal tax form You must include the $575 in your income. Amended federal tax form If you itemize your deductions on Schedule A (Form 1040), Itemized Deductions, you can deduct $310, subject to the net investment income limit. Amended federal tax form Gift for opening account. Amended federal tax form   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. Amended federal tax form   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. Amended federal tax form For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. Amended federal tax form The value is determined by the cost to the financial institution. Amended federal tax form Example. Amended federal tax form You open a savings account at your local bank and deposit $800. Amended federal tax form The account earns $20 interest. Amended federal tax form You also receive a $15 calculator. Amended federal tax form If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. Amended federal tax form You must report $35 interest income on your tax return. Amended federal tax form Interest on insurance dividends. Amended federal tax form   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. Amended federal tax form However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. Amended federal tax form Prepaid insurance premiums. Amended federal tax form   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. Amended federal tax form U. Amended federal tax form S. Amended federal tax form obligations. Amended federal tax form   Interest on U. Amended federal tax form S. Amended federal tax form obligations, such as U. Amended federal tax form S. Amended federal tax form Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. Amended federal tax form Interest on tax refunds. Amended federal tax form   Interest you receive on tax refunds is taxable income. Amended federal tax form Interest on condemnation award. Amended federal tax form   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. Amended federal tax form Installment sale payments. Amended federal tax form   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. Amended federal tax form That interest is taxable when you receive it. Amended federal tax form If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. Amended federal tax form See Unstated Interest and Original Issue Discount (OID) in Publication 537. Amended federal tax form Interest on annuity contract. Amended federal tax form   Accumulated interest on an annuity contract you sell before its maturity date is taxable. Amended federal tax form Usurious interest. Amended federal tax form   Usurious interest is interest charged at an illegal rate. Amended federal tax form This is taxable as interest unless state law automatically changes it to a payment on the principal. Amended federal tax form Interest income on frozen deposits. Amended federal tax form   Exclude from your gross income interest on frozen deposits. Amended federal tax form A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state in which the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. Amended federal tax form   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). Amended federal tax form If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income for information about reporting this interest income exclusion on your tax return. Amended federal tax form   The interest you exclude is treated as credited to your account in the following year. Amended federal tax form You must include it in income in the year you can withdraw it. Amended federal tax form Example. Amended federal tax form $100 of interest was credited on your frozen deposit during the year. Amended federal tax form You withdrew $80 but could not withdraw any more as of the end of the year. Amended federal tax form You must include $80 in your income and exclude $20 from your income for the year. Amended federal tax form You must include the $20 in your income for the year you can withdraw it. Amended federal tax form Bonds traded flat. Amended federal tax form    If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. Amended federal tax form The defaulted or unpaid interest is not income and is not taxable as interest if paid later. Amended federal tax form When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. Amended federal tax form Interest that accrues after the date of purchase, however, is taxable interest income for the year received or accrued. Amended federal tax form See Bonds Sold Between Interest Dates , later in this chapter. Amended federal tax form Below-Market Loans If you make a below-market gift or demand loan, you must report as interest income any forgone interest (defined later) from that loan. Amended federal tax form The below-market loan rules and exceptions are described in this section. Amended federal tax form For more information, see section 7872 of the Internal Revenue Code and its regulations. Amended federal tax form If you receive a below-market loan, you may be able to deduct the forgone interest as well as any interest you actually paid, but not if it is personal interest. Amended federal tax form Loans subject to the rules. Amended federal tax form   The rules for below-market loans apply to: Gift loans, Pay-related loans, Corporation-shareholder loans, Tax avoidance loans, and Certain loans made to qualified continuing care facilities under a continuing care contract. Amended federal tax form A pay-related loan is any below-market loan between an employer and an employee or between an independent contractor and a person for whom the contractor provides services. Amended federal tax form A tax avoidance loan is any below-market loan where the avoidance of federal tax is one of the main purposes of the interest arrangement. Amended federal tax form Forgone interest. Amended federal tax form   For any period, forgone interest is: The amount of interest that would be payable for that period if interest accrued on the loan at the applicable federal rate and was payable annually on December 31, minus Any interest actually payable on the loan for the period. Amended federal tax form Applicable federal rate. Amended federal tax form   Applicable federal rates are published by the IRS each month in the Internal Revenue Bulletin. Amended federal tax form Some IRS offices have these bulletins available for research. Amended federal tax form See chapter 5, How To Get Tax Help , for other ways to get this information. Amended federal tax form Rules for below-market loans. Amended federal tax form   The rules that apply to a below-market loan depend on whether the loan is a gift loan, demand loan, or term loan. Amended federal tax form Gift and demand loans. Amended federal tax form   A gift loan is any below-market loan where the forgone interest is in the nature of a gift. Amended federal tax form   A demand loan is a loan payable in full at any time upon demand by the lender. Amended federal tax form A demand loan is a below-market loan if no interest is charged or if interest is charged at a rate below the applicable federal rate. Amended federal tax form   A demand loan or gift loan that is a below-market loan is generally treated as an arm's-length transaction in which the lender is treated as having made: A loan to the borrower in exchange for a note that requires the payment of interest at the applicable federal rate, and An additional payment to the borrower in an amount equal to the forgone interest. Amended federal tax form The borrower is generally treated as transferring the additional payment back to the lender as interest. Amended federal tax form The lender must report that amount as interest income. Amended federal tax form   The lender's additional payment to the borrower is treated as a gift, dividend, contribution to capital, pay for services, or other payment, depending on the substance of the transaction. Amended federal tax form The borrower may have to report this payment as taxable income, depending on its classification. Amended federal tax form These transfers are considered to occur annually, generally on December 31. Amended federal tax form Term loans. Amended federal tax form   A term loan is any loan that is not a demand loan. Amended federal tax form A term loan is a below-market loan if the amount of the loan is more than the present value of all payments due under the loan. Amended federal tax form   A lender who makes a below-market term loan other than a gift loan is treated as transferring an additional lump-sum cash payment to the borrower (as a dividend, contribution to capital, etc. Amended federal tax form ) on the date the loan is made. Amended federal tax form The amount of this payment is the amount of the loan minus the present value, at the applicable federal rate, of all payments due under the loan. Amended federal tax form An equal amount is treated as original issue discount (OID). Amended federal tax form The lender must report the annual part of the OID as interest income. Amended federal tax form The borrower may be able to deduct the OID as interest expense. Amended federal tax form See Original Issue Discount (OID) , later. Amended federal tax form Exceptions to the below-market loan rules. Amended federal tax form   Exceptions to the below-market loan rules are discussed here. Amended federal tax form Exception for loans of $10,000 or less. Amended federal tax form   The rules for below-market loans do not apply to any day on which the total outstanding amount of loans between the borrower and lender is $10,000 or less. Amended federal tax form This exception applies only to: Gift loans between individuals if the gift loan is not directly used to buy or carry income-producing assets, and Pay-related loans or corporation-shareholder loans if the avoidance of federal tax is not a principal purpose of the interest arrangement. Amended federal tax form This exception does not apply to a term loan described in (2) earlier that previously has been subject to the below-market loan rules. Amended federal tax form Those rules will continue to apply even if the outstanding balance is reduced to $10,000 or less. Amended federal tax form Exception for loans to continuing care facilities. Amended federal tax form   Loans to qualified continuing care facilities under continuing care contracts are not subject to the rules for below-market loans for the calendar year if the lender or the lender's spouse is age 62 or older at the end of the year. Amended federal tax form For the definitions of qualified continuing care facility and continuing care contract, see Internal Revenue Code section 7872(h). Amended federal tax form Exception for loans without significant tax effect. Amended federal tax form   Loans are excluded from the below-market loan rules if their interest arrangements do not have a significant effect on the federal tax liability of the borrower or the lender. Amended federal tax form These loans include: Loans made available by the lender to the general public on the same terms and conditions that are consistent with the lender's customary business practice; Loans subsidized by a federal, state, or municipal government that are made available under a program of general application to the public; Certain employee-relocation loans; Certain loans from a foreign person, unless the interest income would be effectively connected with the conduct of a U. Amended federal tax form S. Amended federal tax form trade or business and would not be exempt from U. Amended federal tax form S. Amended federal tax form tax under an income tax treaty; Gift loans to a charitable organization, contributions to which are deductible, if the total outstanding amount of loans between the organization and lender is $250,000 or less at all times during the tax year; and Other loans on which the interest arrangement can be shown to have no significant effect on the federal tax liability of the lender or the borrower. Amended federal tax form For a loan described in (6) above, all the facts and circumstances are used to determine if the interest arrangement has a significant effect on the federal tax liability of the lender or borrower. Amended federal tax form Some factors to be considered are: Whether items of income and deduction generated by the loan offset each other; The amount of these items; The cost to you of complying with the below-market loan rules, if they were to apply; and Any reasons other than taxes for structuring the transaction as a below-market loan. Amended federal tax form If you structure a transaction to meet this exception and one of the principal purposes of that structure is the avoidance of federal tax, the loan will be considered a tax-avoidance loan, and this exception will not apply. Amended federal tax form Limit on forgone interest for gift loans of $100,000 or less. Amended federal tax form   For gift loans between individuals, if the outstanding loans between the lender and borrower total $100,000 or less, the forgone interest to be included in income by the lender and deducted by the borrower is limited to the amount of the borrower's net investment income for the year. Amended federal tax form If the borrower's net investment income is $1,000 or less, it is treated as zero. Amended federal tax form This limit does not apply to a loan if the avoidance of federal tax is one of the main purposes of the interest arrangement. Amended federal tax form Effective dates. Amended federal tax form    These rules apply to term loans made after June 6, 1984, and to demand loans outstanding after that date. Amended federal tax form U. Amended federal tax form S. Amended federal tax form Savings Bonds This section provides tax information on U. Amended federal tax form S. Amended federal tax form savings bonds. Amended federal tax form It explains how to report the interest income on these bonds and how to treat transfers of these bonds. Amended federal tax form U. Amended federal tax form S. Amended federal tax form savings bonds currently offered to individuals include Series EE bonds and Series I bonds. Amended federal tax form For other information on U. Amended federal tax form S. Amended federal tax form savings bonds, write to:  For Series HH/H: Bureau of the Fiscal Service Division of Customer Assistance P. Amended federal tax form O. Amended federal tax form Box 2186 Parkersburg, WV 26106-2186  For Series EE and I paper savings bonds: Bureau of the Fiscal Service Division of Customer Assistance P. Amended federal tax form O. Amended federal tax form Box 7012 Parkersburg, WV 26106-7012  For Series EE and I electronic bonds: Bureau of the Fiscal Service  Division of Customer Assistance P. Amended federal tax form O. Amended federal tax form Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. Amended federal tax form treasurydirect. Amended federal tax form gov/indiv/indiv. Amended federal tax form htm. Amended federal tax form Accrual method taxpayers. Amended federal tax form   If you use an accrual method of accounting, you must report interest on U. Amended federal tax form S. Amended federal tax form savings bonds each year as it accrues. Amended federal tax form You cannot postpone reporting interest until you receive it or until the bonds mature. Amended federal tax form Cash method taxpayers. Amended federal tax form   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. Amended federal tax form S. Amended federal tax form savings bonds when you receive it. Amended federal tax form But see Reporting options for cash method taxpayers , later. Amended federal tax form Series HH bonds. Amended federal tax form   These bonds were issued at face value. Amended federal tax form Interest is paid twice a year by direct deposit to your bank account. Amended federal tax form If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. Amended federal tax form   Series HH bonds were first offered in 1980 and last offered in August 2004. Amended federal tax form Before 1980, series H bonds were issued. Amended federal tax form Series H bonds are treated the same as series HH bonds. Amended federal tax form If you are a cash method taxpayer, you must report the interest when you receive it. Amended federal tax form   Series H bonds have a maturity period of 30 years. Amended federal tax form Series HH bonds mature in 20 years. Amended federal tax form The last series H bonds matured in 2009. Amended federal tax form The last series HH bonds will mature in 2024. Amended federal tax form Series EE and series I bonds. Amended federal tax form   Interest on these bonds is payable when you redeem the bonds. Amended federal tax form The difference between the purchase price and the redemption value is taxable interest. Amended federal tax form Series EE bonds. Amended federal tax form   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. Amended federal tax form Before July 1980, series E bonds were issued. Amended federal tax form The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. Amended federal tax form Paper series EE and series E bonds are issued at a discount. Amended federal tax form The face value is payable to you at maturity. Amended federal tax form Electronic series EE bonds are issued at their face value. Amended federal tax form The face value plus accrued interest is payable to you at maturity. Amended federal tax form As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. Amended federal tax form    Owners of paper series EE bonds can convert them to electronic bonds. Amended federal tax form These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). Amended federal tax form Series I bonds. Amended federal tax form   Series I bonds were first offered in 1998. Amended federal tax form These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. Amended federal tax form The face value plus all accrued interest is payable to you at maturity. Amended federal tax form Reporting options for cash method taxpayers. Amended federal tax form   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. Amended federal tax form Method 1. Amended federal tax form Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. Amended federal tax form (However, see Savings bonds traded , later. Amended federal tax form )  Note. Amended federal tax form Series EE bonds issued in 1983 matured in 2013. Amended federal tax form If you have used method 1, you generally must report the interest on these bonds on your 2013 return. Amended federal tax form The last series E bonds were issued in 1980 and matured in 2010. Amended federal tax form If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. Amended federal tax form Method 2. Amended federal tax form Choose to report the increase in redemption value as interest each year. Amended federal tax form  You must use the same method for all series EE, series E, and series I bonds you own. Amended federal tax form If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. Amended federal tax form If you plan to cash your bonds in the same year you will pay for higher educational expenses, you may want to use method 1 because you may be able to exclude the interest from your income. Amended federal tax form To learn how, see Education Savings Bond Program, later. Amended federal tax form Change from method 1. Amended federal tax form   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. Amended federal tax form In the year of change, you must report all interest accrued to date and not previously reported for all your bonds. Amended federal tax form   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. Amended federal tax form Change from method 2. Amended federal tax form   To change from method 2 to method 1, you must request permission from the IRS. Amended federal tax form Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. Amended federal tax form You have typed or printed the following number at the top: “131. Amended federal tax form ” It includes your name and social security number under “131. Amended federal tax form ” It includes the year of change (both the beginning and ending dates). Amended federal tax form It identifies the savings bonds for which you are requesting this change. Amended federal tax form It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. Amended federal tax form   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). Amended federal tax form   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. Amended federal tax form On the statement, type or print “Filed pursuant to section 301. Amended federal tax form 9100-2. Amended federal tax form ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). Amended federal tax form    By the date you file the original statement with your return, you must also send a signed copy to the address below. Amended federal tax form    Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. Amended federal tax form O. Amended federal tax form Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. Amended federal tax form Internal Revenue Service Attention: CC:IT&A  (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW Washington, DC 20224    Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115. Amended federal tax form In that case, follow the form instructions for an automatic change. Amended federal tax form No user fee is required. Amended federal tax form Co-owners. Amended federal tax form   If a U. Amended federal tax form S. Amended federal tax form savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. Amended federal tax form One co-owner's funds used. Amended federal tax form   If you used your funds to buy the bond, you must pay the tax on the interest. Amended federal tax form This is true even if you let the other co-owner redeem the bond and keep all the proceeds. Amended federal tax form Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. Amended federal tax form The co-owner who redeemed the bond is a “nominee. Amended federal tax form ” See Nominee distributions under How To Report Interest Income, later, for more information about how a person who is a nominee reports interest income belonging to another person. Amended federal tax form Both co-owners' funds used. Amended federal tax form   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. Amended federal tax form Community property. Amended federal tax form   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. Amended federal tax form If you file separate returns, each of you generally must report one-half of the bond interest. Amended federal tax form For more information about community property, see Publication 555. Amended federal tax form Table 1-2. Amended federal tax form   These rules are also shown in Table 1-2. Amended federal tax form Child as only owner. Amended federal tax form   Interest on U. Amended federal tax form S. Amended federal tax form savings bonds bought for and registered only in the name of your child is income to your child, even if you paid for the bonds and are named as beneficiary. Amended federal tax form If the bonds are series EE, series E, or series I bonds, the interest on the bonds is income to your child in the earlier of the year the bonds are cashed or disposed of or the year the bonds mature, unless your child chooses to report the interest income each year. Amended federal tax form Choice to report interest each year. Amended federal tax form   The choice to report the accrued interest each year can be made either by your child or by you for your child. Amended federal tax form This choice is made by filing an income tax return that shows all the interest earned to date, and by stating on the return that your child chooses to report the interest each year. Amended federal tax form Either you or your child should keep a copy of this return. Amended federal tax form   Unless your child is otherwise required to file a tax return for any year after making this choice, your child does not have to file a return only to report the annual accrual of U. Amended federal tax form S. Amended federal tax form savings bond interest under this choice. Amended federal tax form However, see Tax on unearned income of certain children , earlier, under General Information. Amended federal tax form Neither you nor your child can change the way you report the interest unless you request permission from the IRS, as discussed earlier under Change from method 2 . Amended federal tax form Ownership transferred. Amended federal tax form   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. Amended federal tax form But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. Amended federal tax form   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. Amended federal tax form Example. Amended federal tax form You bought series EE bonds entirely with your own funds. Amended federal tax form You did not choose to report the accrued interest each year. Amended federal tax form Later, you transfer the bonds to your former spouse under a divorce agreement. Amended federal tax form You must include the deferred accrued interest, from the date of the original issue of the bonds to the date of transfer, in your income in the year of transfer. Amended federal tax form Your former spouse includes in income the interest on the bonds from the date of transfer to the date of redemption. Amended federal tax form Table 1-2. Amended federal tax form Who Pays the Tax on U. Amended federal tax form S. Amended federal tax form Savings Bond Interest IF . Amended federal tax form . Amended federal tax form . Amended federal tax form THEN the interest must be reported by . Amended federal tax form . Amended federal tax form . Amended federal tax form you buy a bond in your name and the name of another person as co-owners, using only your own funds you. Amended federal tax form you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. Amended federal tax form you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. Amended federal tax form you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. Amended federal tax form If you file separate returns, both you and your spouse generally report one-half of the interest. Amended federal tax form Purchased jointly. Amended federal tax form   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. Amended federal tax form The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. Amended federal tax form This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. Amended federal tax form   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. Amended federal tax form But the new co-owner will report only his or her share of the interest earned after the transfer. Amended federal tax form   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. Amended federal tax form Example 1. Amended federal tax form You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. Amended federal tax form The bond was issued to you and your spouse as co-owners. Amended federal tax form You both postpone reporting interest on the bond. Amended federal tax form You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Amended federal tax form At that time neither you nor your spouse has to report the interest earned to the date of reissue. Amended federal tax form Example 2. Amended federal tax form You bought a $1,000 series EE savings bond entirely with your own funds. Amended federal tax form The bond was issued to you and your spouse as co-owners. Amended federal tax form You both postponed reporting interest on the bond. Amended federal tax form You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. Amended federal tax form You must report half the interest earned to the date of reissue. Amended federal tax form Transfer to a trust. Amended federal tax form   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. Amended federal tax form However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. Amended federal tax form You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. Amended federal tax form   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. Amended federal tax form See Savings bonds traded , later. Amended federal tax form Decedents. Amended federal tax form   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. Amended federal tax form Decedent who reported interest each year. Amended federal tax form   If the bonds transferred because of death were owned by a person who used an accrual method, or who used the cash method and had chosen to report the interest each year, the interest earned in the year of death up to the date of death must be reported on that person's final return. Amended federal tax form The person who acquires the bonds includes in income only interest earned after the date of death. Amended federal tax form Decedent who postponed reporting interest. Amended federal tax form   If the transferred bonds were owned by a decedent who had used the cash method and had not chosen to report the interest each year, and who had bought the bonds entirely with his or her own funds, all interest earned before death must be reported in one of the following ways. Amended federal tax form The surviving spouse or personal representative (executor, administrator, etc. Amended federal tax form ) who files the final income tax return of the decedent can choose to include on that return all interest earned on the bonds before the decedent's death. Amended federal tax form The person who acquires the bonds then includes in income only interest earned after the date of death. Amended federal tax form If the choice in (1) is not made, the interest earned up to the date of death is income in respect of the decedent and should not be included in the decedent's final return. Amended federal tax form All interest earned both before and after the decedent's death (except any part reported by the estate on its income tax return) is income to the person who acquires the bonds. Amended federal tax form If that person uses the cash method and does not choose to report the interest each year, he or she can postpone reporting it until the year the bonds are cashed or disposed of or the year they mature, whichever is earlier. Amended federal tax form In the year that person reports the interest, he or she can claim a deduction for any federal estate tax paid on the part of the interest included in the decedent's estate. Amended federal tax form For more information on income in respect of a decedent, see Publication 559, Survivors, Executors, and Administrators. Amended federal tax form Example 1. Amended federal tax form Your uncle, a cash method taxpayer, died and left you a $1,000 series EE bond. Amended federal tax form He had bought the bond for $500 and had not chosen to report the interest each year. Amended federal tax form At the date of death, interest of $200 had accrued on the bond, and its value of $700 was included in your uncle's estate. Amended federal tax form Your uncle's executor chose not to include the $200 accrued interest in your uncle's final income tax return. Amended federal tax form The $200 is income in respect of the decedent. Amended federal tax form You are a cash method taxpayer and do not choose to report the interest each year as it is earned. Amended federal tax form If you cash the bond when it reaches maturity value of $1,000, you report $500 interest income—the difference between maturity value of $1,000 and the original cost of $500. Amended federal tax form For that year, you can deduct (as a miscellaneous itemized deduction not subject to the 2%-of-adjusted-gross-income limit) any federal estate tax paid because the $200 interest was included in your uncle's estate. Amended federal tax form Example 2. Amended federal tax form If, in Example 1 , the executor had chosen to include the $200 accrued interest in your uncle's final return, you would report only $300 as interest when you cashed the bond at maturity. Amended federal tax form $300 is the interest earned after your uncle's death. Amended federal tax form Example 3. Amended federal tax form If, in Example 1 , you make or have made the choice to report the increase in redemption value as interest each year, you include in gross income for the year you acquire the bond all of the unreported increase in value of all series E, series EE, and series I bonds you hold, including the $200 on the bond you inherited from your uncle. Amended federal tax form Example 4. Amended federal tax form When your aunt died, she owned series HH bonds that she had acquired in a trade for series EE bonds. Amended federal tax form You were the beneficiary of these bonds. Amended federal tax form Your aunt used the cash method and did not choose to report the interest on the series EE bonds each year as it accrued. Amended federal tax form Your aunt's executor chose not to include any interest earned before your aunt's death on her final return. Amended federal tax form The income in respect of the decedent is the sum of the unreported interest on the series EE bonds and the interest, if any, payable on the series HH bonds but not received as of the date of your aunt's death. Amended federal tax form You must report any interest received during the year as income on your return. Amended federal tax form The part of the interest payable but not received before your aunt's death is income in respect of the decedent and may qualify for the estate tax deduction. Amended federal tax form For information on when to report the interest on the series EE bonds traded, see Savings bonds traded , later. Amended federal tax form Savings bonds distributed from a retirement or profit-sharing plan. Amended federal tax form   If you acquire a U. Amended federal tax form S. Amended federal tax form savings bond in a taxable distribution from a retirement or profit-sharing plan, your income for the year of distribution includes the bond's redemption value (its cost plus the interest accrued before the distribution). Amended federal tax form When you redeem the bond (whether in the year of distribution or later), your interest income includes only the interest accrued after the bond was distributed. Amended federal tax form To figure the interest reported as a taxable distribution and your interest income when you redeem the bond, see Worksheet for savings bonds distributed from a retirement or profit-sharing plan under How To Report Interest Income, later. Amended federal tax form Savings bonds traded. Amended federal tax form   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. Amended federal tax form (You cannot trade series I bonds for series HH bonds. Amended federal tax form After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. Amended federal tax form ) Any cash you received is income up to the amount of the interest earned on the bonds traded. Amended federal tax form When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. Amended federal tax form Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. Amended federal tax form Example. Amended federal tax form You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. Amended federal tax form You reported the $223 as taxable income on your tax return. Amended federal tax form At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. Amended federal tax form You hold the series HH bonds until maturity, when you receive $2,500. Amended federal tax form You must report $300 as interest income in the year of maturity. Amended federal tax form This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). Amended federal tax form (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. Amended federal tax form ) Choice to report interest in year of trade. Amended federal tax form   You could have chosen to treat all of the previously unreported accrued interest on series EE or series E bonds traded for series HH bonds as income in the year of the trade. Amended federal tax form If you made this choice, it is treated as a change from method 1. Amended federal tax form See Change from method 1 under Series EE and series I bonds, earlier. Amended federal tax form Form 1099-INT for U. Amended federal tax form S. Amended federal tax form savings bond interest. Amended federal tax form   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. Amended federal tax form Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. Amended federal tax form However, your Form 1099-INT may show more interest than you have to include on your income tax return. Amended federal tax form For example, this may happen if any of the following are true. Amended federal tax form You chose to report the increase in the redemption value of the bond each year. Amended federal tax form The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. Amended federal tax form You received the bond from a decedent. Amended federal tax form The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. Amended federal tax form Ownership of the bond was transferred. Amended federal tax form The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. Amended federal tax form You were named as a co-owner, and the other co-owner contributed funds to buy the bond. Amended federal tax form The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. Amended federal tax form (See Co-owners , earlier in this section, for more information about the reporting requirements. Amended federal tax form ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. Amended federal tax form The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. Amended federal tax form (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Amended federal tax form , for the year of distribution. Amended federal tax form )   For more information on including the correct amount of interest on your return, see U. Amended federal tax form S. Amended federal tax form savings bond interest previously reported or Nominee distributions under How To Report Interest Income, later. Amended federal tax form    Interest on U. Amended federal tax form S. Amended federal tax form savings bonds is exempt from state and local taxes. Amended federal tax form The Form 1099-INT you receive will indicate the amount that is for U. Amended federal tax form S. Amended federal tax form savings bonds interest in box 3. Amended federal tax form Do not include this income on your state or local income tax return. Amended federal tax form Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. Amended federal tax form S. Amended federal tax form savings bonds during the year if you pay qualified higher educational expenses during the same year. Amended federal tax form This exclusion is known as the Education Savings Bond Program. Amended federal tax form You do not qualify for this exclusion if your filing status is married filing separately. Amended federal tax form Form 8815. Amended federal tax form   Use Form 8815 to figure your exclusion. Amended federal tax form Attach the form to your Form 1040 or Form 1040A. Amended federal tax form Qualified U. Amended federal tax form S. Amended federal tax form savings bonds. Amended federal tax form   A qualified U. Amended federal tax form S. Amended federal tax form savings bond is a series EE bond issued after 1989 or a series I bond. Amended federal tax form The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). Amended federal tax form You must be at least 24 years old before the bond's issue date. Amended federal tax form For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. Amended federal tax form    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. Amended federal tax form Beneficiary. Amended federal tax form   You can designate any individual (including a child) as a beneficiary of the bond. Amended federal tax form Verification by IRS. Amended federal tax form   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of Treasury. Amended federal tax form Qualified expenses. Amended federal tax form   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. Amended federal tax form   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. Amended federal tax form For information about these programs, see Publication 970, Tax Benefits for Education. Amended federal tax form   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. Amended federal tax form Eligible educational institutions. Amended federal tax form   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the Department of Education. Amended federal tax form Reduction for certain benefits. Amended federal tax form   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. Amended federal tax form Tax-free part of scholarships and fellowships. Amended federal tax form Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. Amended federal tax form Expenses used to figure the tax-free portion of distributions from a qualified tuition program. Amended federal tax form Any tax-free payments (other than gifts or inheritances) received as educational assistance, such as: Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. Amended federal tax form Any expense used in figuring the American Opportunity and lifetime learning credits. Amended federal tax form For information about these benefits, see Publication 970. Amended federal tax form Amount excludable. Amended federal tax form   If the total proceeds (interest and principal) from the qualified U. Amended federal tax form S. Amended federal tax form savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. Amended federal tax form If the proceeds are more than the expenses, you may be able to exclude only part of the interest. Amended federal tax form   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. Amended federal tax form The numer