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Free 2011 Tax Forms

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Free 2011 Tax Forms

Free 2011 tax forms Index A Affiliated corporations, Aircraft used by affiliated corporations. Free 2011 tax forms Agri-biodiesel, defined, Agri-biodiesel. Free 2011 tax forms Air transportation taxes, Air Transportation Taxes 225-mile-zone rule, Taxable transportation. Free 2011 tax forms Alaska, Transportation between the continental U. Free 2011 tax forms S. Free 2011 tax forms and Alaska or Hawaii. Free 2011 tax forms , Transportation within Alaska or Hawaii. Free 2011 tax forms , Alaska and Hawaii. Free 2011 tax forms Baggage, Excess baggage. Free 2011 tax forms Bonus tickets, Bonus tickets. Free 2011 tax forms Credits or refunds, Credits or refunds. Free 2011 tax forms Exemptions, Exemptions. Free 2011 tax forms Export, Exportation. Free 2011 tax forms Fixed-wing aircraft, Fixed-wing aircraft uses. Free 2011 tax forms Hawaii, Transportation between the continental U. Free 2011 tax forms S. Free 2011 tax forms and Alaska or Hawaii. Free 2011 tax forms , Transportation within Alaska or Hawaii. Free 2011 tax forms , Alaska and Hawaii. Free 2011 tax forms Helicopters, Certain helicopter uses. Free 2011 tax forms , Transportation of Property by Air International air travel facilities, International Air Travel Facilities Military personnel, Military personnel on international trips. Free 2011 tax forms Package tours, Package tours. Free 2011 tax forms Persons by air, Transportation of Persons by Air Persons liable, Liability for tax. Free 2011 tax forms , Liability for tax. Free 2011 tax forms Property by air, Transportation of Property by Air Tax rates, Transportation of Persons by Air Taxable transportation, Taxable transportation. Free 2011 tax forms Travel agency, Liability for tax. Free 2011 tax forms Uninterrupted international, Uninterrupted international air transportation. Free 2011 tax forms Aircraft, Fixed-wing aircraft uses. Free 2011 tax forms Affiliated corporations, Aircraft used by affiliated corporations. Free 2011 tax forms Small planes, Small aircraft. Free 2011 tax forms Aircraft museum, In an aircraft or vehicle owned by an aircraft museum (No. Free 2011 tax forms 15). Free 2011 tax forms Alaska Air transportation taxes, Transportation between the continental U. Free 2011 tax forms S. Free 2011 tax forms and Alaska or Hawaii. Free 2011 tax forms Tax on diesel fuel or kerosene, Removal for sale or use in Alaska. Free 2011 tax forms Alcohol and tobacco taxes, Excise Taxes Not Covered Alternative fuel credit, Alternative fuel credit. Free 2011 tax forms Alternative fuel, defined, Other fuels. Free 2011 tax forms American Red Cross, International organizations and the American Red Cross. Free 2011 tax forms Answering service, Answering services. Free 2011 tax forms Appeal procedures, Examination and Appeal Procedures Approved refinery, defined, Approved terminal or refinery. 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Free 2011 tax forms Undyed diesel fuel, Credit Card Purchases. Free 2011 tax forms Undyed kerosene, Credit Card Purchases. Free 2011 tax forms Credit or refund Gas guzzler tax, Credit or refund. Free 2011 tax forms Manufacturers taxes, Credits or Refunds Resale of tax-paid semitrailers, Tax on resale of tax-paid trailers and semitrailers. Free 2011 tax forms Retail tax, Credits or refunds. Free 2011 tax forms Tire tax, Credit or refund. Free 2011 tax forms Vaccines, Credit or refund. Free 2011 tax forms Credits, Claiming a Credit on Form 4136 D Deposits Net tax liability, Amount of Deposits Deposits, How to make, How To Make Deposits Diesel fuel Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene Diesel-water fuel emulsion, defined, Diesel-water fuel emulsion. Free 2011 tax forms Dyed diesel fuel, Dyed Diesel Fuel and Dyed Kerosene Dyed kerosene, Dyed Diesel Fuel and Dyed Kerosene E Electric outboard motors, Electric outboard boat motors. Free 2011 tax forms Enterer, defined, Enterer. Free 2011 tax forms Entry, defined, Entry. Free 2011 tax forms Environmental taxes Credit or refund, Credits or refunds. Free 2011 tax forms Exceptions, Exceptions. Free 2011 tax forms Ozone-depleting chemicals (ODCs), Environmental Taxes United States (defined), Environmental Taxes Examination procedures, Examination and Appeal Procedures Excluded liquid, Diesel Fuel and Kerosene Exempt articles, retail tax, Articles exempt from tax. Free 2011 tax forms Exempt communication services American Red Cross, International organizations and the American Red Cross. Free 2011 tax forms Answering service, Answering services. Free 2011 tax forms Coin-operated telephones, Coin-operated telephones. Free 2011 tax forms Installation charges, Installation charges. Free 2011 tax forms International organizations, International organizations and the American Red Cross. Free 2011 tax forms Mobile radio telephone service, Mobile radio telephone service. 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Free 2011 tax forms For export, Exemptions Further manufacturing, Exemptions Helicopters, Certain helicopter uses. Free 2011 tax forms Indian handicrafts, Exemptions Indian tribal governments, Federal, state, and local government. Free 2011 tax forms Military personnel, Military personnel on international trips. Free 2011 tax forms Nonprofit educational organizations, Federal, state, and local government. Free 2011 tax forms , Exemptions Qualified blood collector organizations, Exemptions State and local governments, Federal, state, and local government. Free 2011 tax forms , Exemptions Taxable tires, Tires exempt from tax. Free 2011 tax forms Vessel supplies, Exemptions Export, Export (No. Free 2011 tax forms 3). Free 2011 tax forms Exported taxable fuel, Exported taxable fuel. Free 2011 tax forms F Farming, On a farm for farming purposes (No. Free 2011 tax forms 1). Free 2011 tax forms Federal government, Federal, state, and local government. Free 2011 tax forms Fishing, In a boat engaged in commercial fishing (No. Free 2011 tax forms 4). Free 2011 tax forms Fishing rods and fishing poles. Free 2011 tax forms , Fishing rods and fishing poles. Free 2011 tax forms Fishing tackle boxes, Fishing tackle boxes. Free 2011 tax forms Fixed-wing aircraft, Fixed-wing aircraft uses. Free 2011 tax forms Floor stocks tax Ozone-depleting chemicals, Floor Stocks Tax Floor stocks, ODCs, Environmental Taxes Foreign trade, In foreign trade (No. Free 2011 tax forms 9). Free 2011 tax forms Form 1363, Exportation. Free 2011 tax forms 4136, Claiming a Credit on Form 4136 6197, Gas Guzzler Tax, Form 6197. Free 2011 tax forms , Attachments to Form 720. Free 2011 tax forms 637, Reminders 6627, Environmental Taxes, Attachments to Form 720. Free 2011 tax forms 720, Claiming A Refund, Form 6197. Free 2011 tax forms , Filing Form 720 720X, Form 720X. Free 2011 tax forms 8849, Claiming A Refund 8864, Biodiesel Sold as But Not Used as Fuel Form 720 Attachments, Attachments to Form 720. Free 2011 tax forms Due dates, Due dates. Free 2011 tax forms Final return, Final return. Free 2011 tax forms Schedule A, Filing Form 720 Schedule C, Filing Form 720 Schedule T, Filing Form 720 Free tax services, How To Get Tax Help Fuels Alternative fuel, Other Fuels (Including Alternative Fuels) Diesel, Diesel Fuel and Kerosene Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion For use in aviation, Kerosene for Use in Aviation Gasoline, Gasoline and Aviation Gasoline Kerosene, Diesel Fuel and Kerosene Other Fuels, Other Fuels (Including Alternative Fuels) Used on inland waterways, Fuels Used on Inland Waterways G Gambling, Taxable situations. Free 2011 tax forms Gas guzzler tax Automobiles, Automobiles. Free 2011 tax forms Credit or refund, Credit or refund. Free 2011 tax forms Limousines, Automobiles. Free 2011 tax forms Vehicles not subject to tax, Vehicles not subject to tax. Free 2011 tax forms Gasoline blendstocks, Gasoline Blendstocks Gasoline, defined, Gasoline. Free 2011 tax forms H Hawaii, air transportation taxes, Transportation between the continental U. Free 2011 tax forms S. Free 2011 tax forms and Alaska or Hawaii. Free 2011 tax forms Heavy Motor Vehicle User Fee, Excise Taxes Not Covered Heavy trucks First retail sale, defined, First retail sale defined. Free 2011 tax forms Further manufacture, Further manufacture. Free 2011 tax forms Installment sales, Installment sales. Free 2011 tax forms Parts or accessories, Parts or accessories. Free 2011 tax forms Presumptive retail sales price, Presumptive retail sales price. Free 2011 tax forms Related persons, Related person. Free 2011 tax forms Separate purchases, Separate purchase. Free 2011 tax forms Tax base, Determination of tax base. Free 2011 tax forms Tax rate, Retail Tax on Heavy Trucks, Trailers, and Tractors Helicopter, Certain helicopter uses. Free 2011 tax forms Help (see Tax help) Highway vehicle, Highway vehicle. Free 2011 tax forms , In a highway vehicle owned by the United States that is not used on a highway (No. Free 2011 tax forms 12). Free 2011 tax forms Highway vehicle (Diesel-powered), Diesel-powered highway vehicle. Free 2011 tax forms I Identifying number, Taxpayer identification number. Free 2011 tax forms Imported taxable products (ODCs), Imported Taxable Products Income, include in, Including the Credit or Refund in Income Indoor tanning services, Indoor Tanning Services Tax Information returns, liquid products, Information Returns Inland waterways, Fuels Used on Inland Waterways Intercity and local buses, In certain intercity and local buses (No. Free 2011 tax forms 5). Free 2011 tax forms Interest and penalties, Penalties and Interest International air travel facilities, International Air Travel Facilities K Kerosene Definitions, Diesel Fuel and Kerosene Exported, Diesel Fuel and Kerosene For use in aviation, Kerosene for Use in Aviation L Liquid products, information returns, Information Returns Local telephone service, Local telephone service. Free 2011 tax forms Local-only service, Local-only service. Free 2011 tax forms M Manufacturer, defined, Manufacturer. Free 2011 tax forms Manufacturers taxes Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Coal Credits or refunds, Credits or Refunds Exemptions, Exemptions Gas guzzler tax, Gas Guzzler Tax Lease, Lease considered sale. Free 2011 tax forms Lease payments, Partial payments. Free 2011 tax forms Partial payments, Partial payments. Free 2011 tax forms Registration, Registration requirements. Free 2011 tax forms Related person, Related person. Free 2011 tax forms Requirements for exempt sales, Requirements for Exempt Sales Sale, Sale. Free 2011 tax forms Sport fishing equipment, Sport Fishing Equipment Taxable Tires, Taxable Tires Vaccines, Vaccines Medical device tax, Taxable medical devices. Free 2011 tax forms Military aircraft, In military aircraft (No. Free 2011 tax forms 16). Free 2011 tax forms Mobile radio telephone service, Mobile radio telephone service. Free 2011 tax forms N News services, News services. Free 2011 tax forms Nonprofit educational organization, Exclusive use by a nonprofit educational organization (No. Free 2011 tax forms 13). Free 2011 tax forms Nonprofit educational organization use and state use, Nonprofit educational organization and state use. Free 2011 tax forms Nonprofit educational organizations, Nonprofit educational organizations. Free 2011 tax forms , Federal, state, and local government. Free 2011 tax forms Nontaxable uses, definitions, Definitions of Nontaxable Uses Nontaxable uses, type of use table, Definitions of Nontaxable Uses O Obligations not in registered form, Obligations Not in Registered Form Off-highway use, Off-highway business use (No. Free 2011 tax forms 2). Free 2011 tax forms Oil spill liability, Environmental Taxes Other Fuels (Including Alternative Fuels), Other Fuels (Including Alternative Fuels) Other fuels, defined, Other fuels. Free 2011 tax forms Ozone-depleting chemicals Floor stocks tax, Floor Stocks Tax Imported taxable products, Imported Taxable Products P Patient-centered outcomes research fee, Patient-Centered Outcomes Research Fee Payment of taxes, Payment of Taxes Penalties Dyed diesel fuel, Penalty. Free 2011 tax forms Dyed kerosene, Penalty. Free 2011 tax forms Pipeline operator, defined, Pipeline operator. Free 2011 tax forms Position holder, defined, Position holder. Free 2011 tax forms Publications (see Tax help) Q Qualified local bus, In a qualified local bus (No. Free 2011 tax forms 6). Free 2011 tax forms R Rack, defined, Rack. Free 2011 tax forms Radio broadcasts, News services. Free 2011 tax forms Records, Refiner, defined, Refiner. Free 2011 tax forms Refinery, defined, Refinery. Free 2011 tax forms Refunds, Claiming A Refund Refunds of second tax, Refunds of Second Tax Registered ultimate vendor, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Free 2011 tax forms Registrant, Taxable fuel registrant. Free 2011 tax forms Registrant, defined, Registrant. Free 2011 tax forms Registration, Registration Requirements Form 637, Reminders Registration-required obligations, Obligations Not in Registered Form Related persons Heavy trucks, Related person. Free 2011 tax forms Sport fishing equipment, Related person. Free 2011 tax forms Removal, defined, Removal. Free 2011 tax forms Retail tax Credits or refunds, Credits or refunds. Free 2011 tax forms Heavy trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Rulings Program, Rulings Program Rural airports, Rural airports. Free 2011 tax forms S Sale, defined, Sale. Free 2011 tax forms Sales by registered ultimate vendors, gasoline, Sales by registered ultimate vendors. Free 2011 tax forms Sales by registered ultimate vendors, kerosene for use in aviation, Sales by Registered Ultimate Vendors Sales price Bonus goods, Bonus goods. Free 2011 tax forms Cost of transportation, Manufacturers taxes based on sale price. Free 2011 tax forms Delivery costs, Manufacturers taxes based on sale price. Free 2011 tax forms Discounts, Manufacturers taxes based on sale price. Free 2011 tax forms Installation costs, Manufacturers taxes based on sale price. Free 2011 tax forms Insurance costs, Manufacturers taxes based on sale price. Free 2011 tax forms Local advertising charges, Manufacturers taxes based on sale price. 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Free 2011 tax forms State or local governments, Exclusive use by a state, political subdivision of a state, or the District of Columbia (No. Free 2011 tax forms 14). Free 2011 tax forms State or nonprofit educational organization use, Sales by registered ultimate vendors. Free 2011 tax forms State use, Registered ultimate vendor (state use). Free 2011 tax forms , State use. Free 2011 tax forms State, defined, State. Free 2011 tax forms Suggestions, Comments and suggestions. Free 2011 tax forms T Tanning tax, Indoor Tanning Services Tax Tax help, How To Get Tax Help Tax rate, Electric outboard boat motors. Free 2011 tax forms Air transportation of persons, Transportation of Persons by Air Air transportation of property, Transportation of Property by Air Arrow shafts, Arrow Shafts Bows, Quivers, Broadheads, and Points, Bows, Quivers, Broadheads, and Points Coal, Tax rates. Free 2011 tax forms Electric outboard motor, Electric outboard boat motors. Free 2011 tax forms International air travel facilities, International Air Travel Facilities Obligations not in registered form, Obligations Not in Registered Form Policies issued by foreign persons, Foreign Insurance Taxes Ship passenger tax, Ship Passenger Tax Sport fishing equipment, Sport Fishing Equipment Trucks, Retail Tax on Heavy Trucks, Trailers, and Tractors Taxable fuel registrant, Taxable fuel registrant. Free 2011 tax forms Taxable Tires Manufacturers taxes, Taxable Tires Taxable tires Exemptions, Tires exempt from tax. Free 2011 tax forms Taxes, Payment of, Payment of Taxes Taxpayer identification number, Taxpayer identification number. Free 2011 tax forms Teletypewriter exchange service, Teletypewriter exchange service. Free 2011 tax forms Terminal operator, defined, Terminal operator. Free 2011 tax forms Terminal, defined, Terminal. Free 2011 tax forms Throughputter, defined, Throughputter. Free 2011 tax forms Tires Credit against heavy truck tax, Tire credit. Free 2011 tax forms Credit or refund of tax, Credit or refund. Free 2011 tax forms Train, Use in a train. Free 2011 tax forms Train (Diesel-powered), Diesel-powered train. Free 2011 tax forms Transmix, Diesel Fuel and Kerosene Travel agency, Liability for tax. Free 2011 tax forms TTY/TDD information, How To Get Tax Help Two-party exchanges, Two-party exchanges. Free 2011 tax forms , Two-party exchanges. Free 2011 tax forms U Ultimate purchaser, Ultimate purchaser. Free 2011 tax forms Uninterrupted international air transportation, Uninterrupted international air transportation. Free 2011 tax forms , Military personnel on international trips. Free 2011 tax forms Used other than as a fuel Diesel fuel and kerosene, For diesel fuel and kerosene (other than kerosene used in aviation) used other than as a fuel (No. Free 2011 tax forms 8). Free 2011 tax forms Uses, nontaxable Alternative fuels, Other Fuels (Including Alternative Fuels) Aviation gasoline, Gasoline and Aviation Gasoline Diesel fuel, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Diesel-water fuel emulsion, Diesel-Water Fuel Emulsion Gasoline, Gasoline and Aviation Gasoline Kerosene, Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation) Kerosene for use in aviation, Ultimate purchasers. Free 2011 tax forms Liquefied petroleum gas (LPG), Other Fuels (Including Alternative Fuels) Other Fuels, Other Fuels (Including Alternative Fuels) V Vaccines Credit or refund, Credit or refund. Free 2011 tax forms Manufacturers tax, What's New, Vaccines Vehicles Gas guzzler, Gas Guzzler Tax Imported, Imported automobiles. Free 2011 tax forms Law enforcement, Vehicles not subject to tax. Free 2011 tax forms Vendors, registered ultimate, Sales by Registered Ultimate Vendors, Registered ultimate vendor. Free 2011 tax forms Vessel operator, defined, Vessel operator. Free 2011 tax forms W Wagering and occupational wagering fee, Excise Taxes Not Covered When to deposit, When To Make Deposits Prev  Up     Home   More Online Publications
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The Free 2011 Tax Forms

Free 2011 tax forms 2. Free 2011 tax forms   Tax Shelters and Other Reportable Transactions Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Abusive Tax SheltersRules To Curb Abusive Tax Shelters Investor Reporting Penalties Whether To Invest Introduction Investments that yield tax benefits are sometimes called “tax shelters. Free 2011 tax forms ” In some cases, Congress has concluded that the loss of revenue is an acceptable side effect of special tax provisions designed to encourage taxpayers to make certain types of investments. Free 2011 tax forms In many cases, however, losses from tax shelters produce little or no benefit to society, or the tax benefits are exaggerated beyond those intended. Free 2011 tax forms Those cases are called “abusive tax shelters. Free 2011 tax forms ” An investment that is considered a tax shelter is subject to restrictions, including the requirement that it be disclosed, as discussed later. Free 2011 tax forms Topics - This chapter discusses: Abusive Tax Shelters , Rules To Curb Abusive Tax Shelters , Investor Reporting , Penalties , and Whether To Invest . Free 2011 tax forms Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 556 Examination of Returns, Appeal Rights, and Claims for Refund 561 Determining the Value of Donated Property 925 Passive Activity and At-Risk Rules Form (and Instructions) 8275 Disclosure Statement 8275-R Regulation Disclosure Statement 8283 Noncash Charitable Contributions 8886 Reportable Transaction Disclosure Statement See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Free 2011 tax forms Abusive Tax Shelters Abusive tax shelters are marketing schemes involving artificial transactions with little or no economic reality. Free 2011 tax forms They often make use of unrealistic allocations, inflated appraisals, losses in connection with nonrecourse loans, mismatching of income and deductions, financing techniques that do not conform to standard commercial business practices, or mischaracterization of the substance of the transaction. Free 2011 tax forms Despite appearances to the contrary, the taxpayer generally risks little. Free 2011 tax forms Abusive tax shelters commonly involve package deals designed from the start to generate losses, deductions, or credits that will be far more than present or future investment. Free 2011 tax forms Or, they may promise investors from the start that future inflated appraisals will enable them, for example, to reap charitable contribution deductions based on those appraisals. Free 2011 tax forms (But see the appraisal requirements discussed under Rules To Curb Abusive Tax Shelters , later. Free 2011 tax forms ) They are commonly marketed in terms of the ratio of tax deductions allegedly available to each dollar invested. Free 2011 tax forms This ratio (or “write-off”) is frequently said to be several times greater than one-to-one. Free 2011 tax forms Because there are many abusive tax shelters, it is not possible to list all the factors you should consider in determining whether an offering is an abusive tax shelter. Free 2011 tax forms However, you should ask the following questions, which might provide a clue to the abusive nature of the plan. Free 2011 tax forms Do the tax benefits far outweigh the economic benefits? Is this a transaction you would seriously consider, apart from the tax benefits, if you hoped to make a profit? Do shelter assets really exist and, if so, are they insured for less than their purchase price? Is there a nontax justification for the way profits and losses are allocated to partners? Do the facts and supporting documents make economic sense? In that connection, are there sales and resales of the tax shelter property at ever increasing prices? Does the investment plan involve a gimmick, device, or sham to hide the economic reality of the transaction? Does the promoter offer to backdate documents after the close of the year? Are you instructed to backdate checks covering your investment? Is your debt a real debt or are you assured by the promoter that you will never have to pay it? Does this transaction involve laundering United States source income through foreign corporations incorporated in a tax haven and owned by United States shareholders? Rules To Curb Abusive Tax Shelters Congress has enacted a series of income tax laws designed to halt the growth of abusive tax shelters. Free 2011 tax forms These provisions include the following. Free 2011 tax forms Disclosure of reportable transactions. Free 2011 tax forms   You must disclose information for each reportable transaction in which you participate. Free 2011 tax forms See Reportable Transaction Disclosure Statement , later. Free 2011 tax forms   Material advisors with respect to any reportable transaction must disclose information about the transaction on Form 8918, Material Advisor Disclosure Statement. Free 2011 tax forms To determine whether you are a material advisor to a transaction, see the Instructions for Form 8918. Free 2011 tax forms   Material advisors will receive a reportable transaction number for the disclosed reportable transaction. Free 2011 tax forms They must provide this number to all persons to whom they acted as a material advisor. Free 2011 tax forms They must provide the number at the time the transaction is entered into. Free 2011 tax forms If they do not have the number at that time, they must provide it within 60 days from the date the number is mailed to them. Free 2011 tax forms For information on penalties for failure to disclose and failure to maintain lists, see Internal Revenue Code sections 6707, 6707A, and 6708. Free 2011 tax forms Requirement to maintain list. Free 2011 tax forms   Material advisors must maintain a list of persons to whom they provide material aid, assistance, or advice on any reportable transaction. Free 2011 tax forms The list must be available for inspection by the IRS, and the information required to be included on the list generally must be kept for 7 years. Free 2011 tax forms See Regulations section 301. Free 2011 tax forms 6112-1 for more information (including what information is required to be included on the list). Free 2011 tax forms Confidentiality privilege. Free 2011 tax forms   The confidentiality privilege between you and a federally authorized tax practitioner does not apply to written communications made after October 21, 2004, regarding the promotion of your direct or indirect participation in any tax shelter. Free 2011 tax forms Appraisal requirement for donated property. Free 2011 tax forms   If you claim a deduction of more than $5,000 for an item or group of similar items of donated property, you generally must get a qualified appraisal from a qualified appraiser and complete and attach section B of Form 8283 to your return. Free 2011 tax forms If you claim a deduction of more than $500,000 for the donated property, you generally must attach the qualified appraisal to your return. Free 2011 tax forms If you file electronically, see Form 8453, U. Free 2011 tax forms S. Free 2011 tax forms Individual Income Tax Transmittal for an IRS e-file Return, and its instructions. Free 2011 tax forms For more information about appraisals, including exceptions, see Publication 561. Free 2011 tax forms Passive activity loss and credit limits. Free 2011 tax forms   The passive activity loss and credit rules limit the amount of losses and credits that can be claimed from passive activities and limit the amount that can offset nonpassive income, such as certain portfolio income from investments. Free 2011 tax forms For more detailed information about determining and reporting income, losses, and credits from passive activities, see Publication 925. Free 2011 tax forms Interest on penalties. Free 2011 tax forms   If you are assessed an accuracy-related or civil fraud penalty (as discussed under Penalties , later), interest will be imposed on the amount of the penalty from the due date of the return (including any extensions) to the date you pay the penalty. Free 2011 tax forms Accounting method restriction. Free 2011 tax forms   Tax shelters generally cannot use the cash method of accounting. Free 2011 tax forms Uniform capitalization rules. Free 2011 tax forms   The uniform capitalization rules generally apply to producing property or acquiring it for resale. Free 2011 tax forms Under those rules, the direct cost and part of the indirect cost of the property must be capitalized or included in inventory. Free 2011 tax forms For more information, see Publication 538. Free 2011 tax forms Denial of deduction for interest on an underpayment due to a reportable transaction. Free 2011 tax forms   You cannot deduct any interest you paid or accrued on any part of an underpayment of tax due to an understatement arising from a reportable transaction (discussed later) if the relevant facts affecting the tax treatment of the item are not adequately disclosed. Free 2011 tax forms This rule applies to reportable transactions entered into in tax years beginning after October 22, 2004. Free 2011 tax forms Authority for Disallowance of Tax Benefits The IRS has published guidance concluding that the claimed tax benefits of various abusive tax shelters should be disallowed. Free 2011 tax forms The guidance is the conclusion of the IRS on how the law is applied to a particular set of facts. Free 2011 tax forms Guidance is published in the Internal Revenue Bulletin for taxpayers' information and also for use by IRS officials. Free 2011 tax forms So, if your return is examined and an abusive tax shelter is identified and challenged, published guidance dealing with that type of shelter, which disallows certain claimed tax shelter benefits, could serve as the basis for the examining official's challenge of the tax benefits you claimed. Free 2011 tax forms In such a case, the examiner will not compromise even if you or your representative believes you have authority for the positions taken on your tax return. Free 2011 tax forms The courts have generally been unsympathetic to taxpayers involved in abusive tax shelter schemes and have ruled in favor of the IRS in the majority of the cases in which these shelters have been challenged. Free 2011 tax forms Investor Reporting You may be required to file a reportable transaction disclosure statement. Free 2011 tax forms Reportable Transaction Disclosure Statement Use Form 8886 to disclose information for each reportable transaction (discussed later) in which you participated. Free 2011 tax forms Generally, you must attach Form 8886 to your return for each tax year in which you participated in the transaction. Free 2011 tax forms Under certain circumstances, a transaction must be disclosed within 90 days of the transaction being identified as a listed transaction or a transaction of interest (discussed later). Free 2011 tax forms In addition, for the first year Form 8886 is attached to your return, you must send a copy of the form to: Internal Revenue Service OTSA Mail Stop 4915 1973 North Rulon White Blvd. Free 2011 tax forms  Ogden, UT 84404 If you file your return electronically, the copy sent to OTSA must show exactly the same information, word for word, provided with the electronically filed return and it must be provided on the official IRS Form 8886 or an exact copy of the form. Free 2011 tax forms If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form. Free 2011 tax forms If you fail to file Form 8886 as required or fail to include any required information on the form, you may have to pay a penalty. Free 2011 tax forms See Penalty for failure to disclose a reportable transaction , later under Penalties. Free 2011 tax forms The following discussion briefly describes reportable transactions. Free 2011 tax forms For more details, see the Instructions for Form 8886. Free 2011 tax forms Reportable transaction. Free 2011 tax forms   A reportable transaction is any of the following. Free 2011 tax forms A listed transaction. Free 2011 tax forms A confidential transaction. Free 2011 tax forms A transaction with contractual protection. Free 2011 tax forms A loss transaction. Free 2011 tax forms A transaction of interest entered into after November 1, 2006. Free 2011 tax forms Note. Free 2011 tax forms Transactions with a brief asset holding period were removed from the definition of reportable transaction for transactions entered into after August 2, 2007. Free 2011 tax forms Listed transaction. Free 2011 tax forms   A listed transaction is the same as, or substantially similar to, one of the types of transactions the IRS has determined to be a tax-avoidance transaction. Free 2011 tax forms These transactions have been identified in notices, regulations, and other published guidance issued by the IRS. Free 2011 tax forms For a list of existing guidance, see Notice 2009-59 in Internal Revenue Bulletin 2009-31, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2009-31_IRB/ar07. Free 2011 tax forms html. Free 2011 tax forms Confidential transaction. Free 2011 tax forms   A confidential transaction is offered to you under conditions of confidentiality and for which you have paid an advisor a minimum fee. Free 2011 tax forms A transaction is offered under conditions of confidentiality if the advisor who is paid the fee places a limit on your disclosure of the tax treatment or tax structure of the transaction and the limit protects the confidentiality of the advisor's tax strategies. Free 2011 tax forms The transaction is treated as confidential even if the conditions of confidentiality are not legally binding on you. Free 2011 tax forms Transaction with contractual protection. Free 2011 tax forms   Generally, a transaction with contractual protection is one in which you or a related party has the right to a full or partial refund of fees if all or part of the intended tax consequences of the transaction are not sustained, or a transaction for which the fees are contingent on your realizing the tax benefits from the transaction. Free 2011 tax forms For information on exceptions, see Revenue Procedure 2007-20 in Internal Revenue Bulletin 2007-7, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2007-07_IRB/ar15. Free 2011 tax forms html. Free 2011 tax forms Loss transaction. Free 2011 tax forms   For individuals, a loss transaction is one that results in a deductible loss if the gross amount of the loss is at least $2 million in a single tax year or $4 million in any combination of tax years. Free 2011 tax forms A loss from a foreign currency transaction under Internal Revenue Code section 988 is a loss transaction if the gross amount of the loss is at least $50,000 in a single tax year, whether or not the loss flows through from an S corporation or partnership. Free 2011 tax forms   Certain losses (such as losses from casualties, thefts, and condemnations) are excepted from this category and do not have to be reported on Form 8886. Free 2011 tax forms For information on other exceptions, see Revenue Procedure 2004-66 in Internal Revenue Bulletin 2004-50, as modified and superseded by Revenue Procedure 2013-11, (or future published guidance) available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2004-50_IRB/ar11. Free 2011 tax forms html. Free 2011 tax forms Transaction of interest. Free 2011 tax forms   A transaction of interest is a transaction entered into after November 1, 2006, that is the same as, or substantially similar to, one of the types of transactions that the IRS has identified by notice, regulation, or other form of published guidance as a transaction of interest. Free 2011 tax forms The IRS has identified the following transactions of interest. Free 2011 tax forms “Toggling” grantor trusts as described in Notice 2007-73, 2007-36 I. Free 2011 tax forms R. Free 2011 tax forms B. Free 2011 tax forms 545, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2007-36_IRB/ar20. Free 2011 tax forms html. Free 2011 tax forms Certain transactions involving contributions of a successor member interest in a limited liability company as described in Notice 2007-72, 2007-36 I. Free 2011 tax forms R. Free 2011 tax forms B. Free 2011 tax forms 544, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2007-36_IRB/ar19. Free 2011 tax forms html. Free 2011 tax forms Certain transactions involving the sale or other disposition of all interests in a charitable remainder trust and claiming little or no taxable gain as described in Notice 2008-99, 2008-47 I. Free 2011 tax forms R. Free 2011 tax forms B. Free 2011 tax forms 1194, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2008-47_IRB/ar11. Free 2011 tax forms html. Free 2011 tax forms Certain transactions involving a U. Free 2011 tax forms S. Free 2011 tax forms taxpayer owning controlled foreign corporations (CFCs) that hold stock of a lower-tier CFC through a domestic partnership to avoid reporting income as described in Notice 2009-7, 2009-3 I. Free 2011 tax forms R. Free 2011 tax forms B. Free 2011 tax forms 312, available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2009-03_IRB/ar10. Free 2011 tax forms html. Free 2011 tax forms   For updates to this list, go to www. Free 2011 tax forms irs. Free 2011 tax forms gov/Businesses/Corporations/Abusive-Tax-Shelters-and-Transactions. Free 2011 tax forms Penalties Investing in an abusive tax shelter may lead to substantial expenses. Free 2011 tax forms First, the promoter generally charges a substantial fee. Free 2011 tax forms If your return is examined by the IRS and a tax deficiency is determined, you will be faced with payment of more tax, interest on the underpayment, possibly a 20%, 30%, or even 40% accuracy-related penalty, or a 75% civil fraud penalty. Free 2011 tax forms You may also be subject to the penalty for failure to pay tax. Free 2011 tax forms These penalties are explained in the following paragraphs. Free 2011 tax forms Accuracy-related penalties. Free 2011 tax forms   An accuracy-related penalty of 20% can be imposed for underpayments of tax due to: Negligence or disregard of rules or regulations, Substantial understatement of tax, Substantial valuation misstatement (increased to 40% for gross valuation misstatement), Transaction lacking economic substance (increased to 40% for undisclosed transaction lacking economic substance), or Undisclosed foreign financial asset understatement (40% in all cases). Free 2011 tax forms Except for a transaction lacking economic substance, this penalty will not be imposed if you can show you had reasonable cause for any understatement of tax and that you acted in good faith. Free 2011 tax forms Your failure to disclose a reportable transaction is a strong indication that you failed to act in good faith. Free 2011 tax forms   If you are charged an accuracy-related penalty, interest will be imposed on the amount of the penalty from the due date of the return (including extensions) to the date you pay the penalty. Free 2011 tax forms   The 20% penalties do not apply to any underpayment attributable to a reportable transaction understatement subject to an accuracy-related penalty (discussed later). Free 2011 tax forms Negligence or disregard of rules or regulations. Free 2011 tax forms   The penalty for negligence or disregard of rules or regulations is imposed only on the part of the underpayment due to negligence or disregard of rules or regulations. Free 2011 tax forms The penalty will not be charged if you can show you had reasonable cause for understating your tax and that you acted in good faith. Free 2011 tax forms    Negligence includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Free 2011 tax forms It also includes any failure to keep adequate books and records. Free 2011 tax forms A return position that has a reasonable basis is not negligence. Free 2011 tax forms   Disregard includes any careless, reckless, or intentional disregard of rules or regulations. Free 2011 tax forms   The penalty for disregard of rules and regulations can be avoided if all the following are true. Free 2011 tax forms You keep adequate books and records. Free 2011 tax forms You have a reasonable basis for your position on the tax issue. Free 2011 tax forms You make an adequate disclosure of your position. Free 2011 tax forms Use Form 8275 to make your disclosure and attach it to your return. Free 2011 tax forms To disclose a position contrary to a regulation, use Form 8275-R. Free 2011 tax forms Use Form 8886 to disclose a reportable transaction (discussed earlier). Free 2011 tax forms Substantial understatement of tax. Free 2011 tax forms   An understatement is considered to be substantial if it is more than the greater of: 10% of the tax required to be shown on the return, or $5,000. Free 2011 tax forms An “understatement” is the amount of tax required to be shown on your return for a tax year minus the amount of tax shown on the return, reduced by any rebates. Free 2011 tax forms The term “rebate” generally means a decrease in the tax shown on your original return as the result of your filing an amended return or claim for refund. Free 2011 tax forms   For items other than tax shelters, you can file Form 8275 or Form 8275-R to disclose items that could cause a substantial understatement of income tax. Free 2011 tax forms In that way, you can avoid the substantial understatement penalty if you have a reasonable basis for your position on the tax issue. Free 2011 tax forms Disclosure of the tax shelter item on a tax return does not reduce the amount of the understatement. Free 2011 tax forms   Also, the understatement penalty will not be imposed if you can show there was reasonable cause for the underpayment caused by the understatement and that you acted in good faith. Free 2011 tax forms An important factor in establishing reasonable cause and good faith will be the extent of your effort to determine your proper tax liability under the law. Free 2011 tax forms Substantial valuation misstatement. Free 2011 tax forms   In general, you are liable for a 20% penalty for a substantial valuation misstatement if all the following are true. Free 2011 tax forms The value or adjusted basis of any property claimed on the return is 150% or more of the correct amount. Free 2011 tax forms You underpaid your tax by more than $5,000 because of the misstatement. Free 2011 tax forms You cannot establish that you had reasonable cause for the underpayment and that you acted in good faith. Free 2011 tax forms   You may be assessed a penalty of 40% for a gross valuation misstatement. Free 2011 tax forms If you misstate the value or the adjusted basis of property by 200% or more of the amount determined to be correct, you will be assessed a penalty of 40%, instead of 20%, of the amount you underpaid because of the gross valuation misstatement. Free 2011 tax forms The penalty rate is also 40% if the property's correct value or adjusted basis is zero. Free 2011 tax forms Transaction lacking economic substance. Free 2011 tax forms   The economic substance doctrine only applies to an individual that entered into a transaction in connection with a trade or business or an activity engaged in for the production of income. Free 2011 tax forms For transactions entered into after March 30, 2010, a transaction has economic substance for you as an individual taxpayer only if: The transaction changes your economic position in a meaningful way (apart from federal income tax effects), or You have a substantial purpose (apart from federal income tax effects) for entering into the transaction. Free 2011 tax forms   For purposes of determining whether economic substance exists, a transaction's profit potential will only be taken into account if the present value of the reasonably expected pre-tax profit from the transaction is substantial compared to the present value of the expected net tax benefits that would be allowed if the transaction were respected. Free 2011 tax forms   If any part of your underpayment is due to any disallowance of claimed tax benefits by reason of a transaction lacking economic substance or failing to meet the requirements of any similar rule of law, that part of your underpayment will be subject to the 20% accuracy-related penalty even if you had a reasonable cause and acted in good faith concerning that part. Free 2011 tax forms   Additionally, the penalty increases to 40% if you do not adequately disclose on your return or in a statement attached to your return the relevant facts affecting the tax treatment of a transaction that lacks economic substance. Free 2011 tax forms Relevant facts include any facts affecting the tax treatment of the transaction. Free 2011 tax forms    Any excessive amount of an erroneous claim for an income tax refund or credit (other than a refund or credit related to the earned income credit) that results from a transaction found to be lacking economic substance will not be treated as having a reasonable basis and could be subject to a 20% penalty. Free 2011 tax forms Undisclosed foreign financial asset understatement. Free 2011 tax forms   For tax years beginning after March 18, 2010, you may be liable for a 40% penalty for an understatement of your tax liability due to an undisclosed foreign financial asset. Free 2011 tax forms An undisclosed foreign financial asset is any asset for which an information return, required to be provided under Internal Revenue Code section 6038, 6038B, 6038D, 6046A, or 6048 for any taxable year, is not provided. Free 2011 tax forms The penalty applies to any part of an underpayment related to the following undisclosed foreign financial assets. Free 2011 tax forms Any foreign business you control, reportable on Form 5471, Information Return of U. Free 2011 tax forms S. Free 2011 tax forms Persons With Respect To Certain Foreign Corporations, or Form 8865, Return of U. Free 2011 tax forms S. Free 2011 tax forms Persons With Respect to Certain Foreign Partnerships. Free 2011 tax forms Certain transfers of property to a foreign corporation or partnership, reportable on Form 926, Return by a U. Free 2011 tax forms S. Free 2011 tax forms Transferor of Property to a Foreign Corporation, or certain distributions to a foreign person, reportable on Form 8865. Free 2011 tax forms Your ownership interest in certain foreign financial assets, temporarily reportable on Form 8275 or 8275-R. Free 2011 tax forms    Instead of, or in addition to, Form 8275 or 8275-R, you may have to file Form 8938, Statement of Specified Foreign Financial Assets, with your tax return. Free 2011 tax forms See the Instructions for Form 8938 for details. Free 2011 tax forms    Your acquisition, disposition, or substantial change in ownership interest in a foreign partnership, reportable on Form 8865. Free 2011 tax forms Creation or transfer of money or property to certain foreign trusts, reportable on Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Free 2011 tax forms Penalty for incorrect appraisals. Free 2011 tax forms   The person who prepares an appraisal of the value of property may have to pay a penalty if: He or she knows, or reasonably should have known, that the appraisal would be used in connection with a return or claim for refund; and The claimed value of the property on a return or claim for refund based on that appraisal results in a substantial valuation misstatement or a gross valuation misstatement as discussed earlier. Free 2011 tax forms For details on the penalty amount and exceptions, see Publication 561. Free 2011 tax forms Penalty for failure to disclose a reportable transaction. Free 2011 tax forms   If you fail to include any required information regarding a reportable transaction (discussed earlier) on a return or statement, you may have to pay a penalty of 75% of the decrease in tax shown on your return as a result of such transaction (or that would have resulted if the transaction were respected for federal tax purposes). Free 2011 tax forms For an individual, the minimum penalty is $5,000 and the maximum is $10,000 (or $100,000 for a listed transaction). Free 2011 tax forms This penalty is in addition to any other penalty that may be imposed. Free 2011 tax forms   The IRS may rescind or abate the penalty for failing to disclose a reportable transaction under certain limited circumstances but cannot rescind the penalty for failing to disclose a listed transaction. Free 2011 tax forms For information on rescission, see Revenue Procedure 2007-21 in Internal Revenue Bulletin 2007-9 available at www. Free 2011 tax forms irs. Free 2011 tax forms gov/irb/2007-09_IRB/ar12. Free 2011 tax forms html. Free 2011 tax forms Accuracy-related penalty for a reportable transaction understatement. Free 2011 tax forms   If you have a reportable transaction understatement, you may have to pay a penalty equal to 20% of the amount of that understatement. Free 2011 tax forms This applies to any item due to a listed transaction or other reportable transaction with a significant purpose of avoiding or evading federal income tax. Free 2011 tax forms The penalty is 30% rather than 20% for the part of any reportable transaction understatement if the transaction was not properly disclosed. Free 2011 tax forms You may not have to pay the 20% penalty if you meet the strengthened reasonable cause and good faith exception. Free 2011 tax forms The reasonable cause and good faith exception does not apply to any part of a reportable transaction understatement attributable to one or more transactions that lack economic substance. Free 2011 tax forms   This penalty does not apply to the part of an understatement on which the fraud penalty, gross valuation misstatement penalty, or penalty for nondisclosure of noneconomic substance transactions is imposed. Free 2011 tax forms Civil fraud penalty. Free 2011 tax forms   If any underpayment of tax on your return is due to fraud, a penalty of 75% of the underpayment will be added to your tax. Free 2011 tax forms Joint return. Free 2011 tax forms   The fraud penalty on a joint return applies to a spouse only if some part of the underpayment is due to the fraud of that spouse. Free 2011 tax forms Failure to pay tax. Free 2011 tax forms   If a deficiency is assessed and is not paid within 10 days of the demand for payment, an investor can be penalized with up to a 25% addition to tax if the failure to pay continues. Free 2011 tax forms Whether To Invest In light of the adverse tax consequences and the substantial amount of penalties and interest that will result if the claimed tax benefits are disallowed, you should consider tax shelter investments carefully and seek competent legal and financial advice. Free 2011 tax forms Prev  Up  Next   Home   More Online Publications