File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Free State Income Tax Filing Online

Irs Tax Return Forms 2012Where Do I File My State Taxes For FreeWhen Is The Last Day To File Taxes 2014Www Taxcut ComFile 1040x OnlinePrior TaxLate TaxesFree 2012 Tax Return Software2011 Form 1040ezFile 2009 Taxes Online Free State And FederalEfile 2012 Tax Return FreeIrs Form Ez 1040Berkheimer Online Tax Filing1040 Ez 2012H&r Block TaxcutTax Preparation For Military MembersMilitary Pay ScaleFile An Amended Tax Return For 2012Income Tax Amendment FormH&r Block Free State FileFree Online State TaxesBacktaxesTax Aid2011 Federal Tax Forms2012 1040How To Fill Out The 1040ezAmended Form 1040xIrs Ez Tax Form 2011Free File Form 4868Form 1040ez Mailing AddressFile State Tax Return For FreeFreefillableforms1040ez 2013 Tax FormWww.irs.gov/form1040xTax Form 1040nrTax Forms For 2012 Federal2011 1040How To Amend 2011 Tax Return TurbotaxFiling A 1040x1040 Ez 2011 Tax Form

Free State Income Tax Filing Online

Free state income tax filing online Index Symbols 403(b) account, What Is a 403(b) Plan? 403(b) plans Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? Participation, Who Can Participate in a 403(b) Plan? Self-employed ministers, Who Can Set Up a 403(b) Account? What is a 403(b) plan?, What Is a 403(b) Plan? Who can set up a 403(b) account?, Who Can Set Up a 403(b) Account? A After-tax contributions, How Can Contributions Be Made to My 403(b) Account? Assistance (see Tax help) B Basics, 403(b) Plan Basics Benefits, What Are the Benefits of Contributing to a 403(b) Plan? C Catch-up contributions, Catch-Up Contributions Chaplain, Ministers. Free state income tax filing online Church employees, Ministers and Church Employees Years of service, Changes to Years of Service Comments on publication, Comments and suggestions. Free state income tax filing online Contributions, How Can Contributions Be Made to My 403(b) Account? After-tax, How Can Contributions Be Made to My 403(b) Account? Catch-up, Catch-Up Contributions Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. Free state income tax filing online Nonelective, How Can Contributions Be Made to My 403(b) Account? Reporting, Do I Report Contributions on My Tax Return? Correcting excess contributions, What Happens If I Have Excess Contributions? Credit, for retirement savings contributions, Retirement Savings Contributions Credit (Saver's Credit) D Distributions, Distributions and Rollovers, Distributions 10-year tax option, No Special 10-Year Tax Option 90-24 transfer, Contract exchanges. Free state income tax filing online Deceased employees, Spouses of deceased employees. Free state income tax filing online Direct rollover, Direct rollovers of 403(b) plan distributions. Free state income tax filing online Eligible retirement plans, Eligible retirement plans. Free state income tax filing online Frozen deposit, Frozen deposits. Free state income tax filing online Gift tax, Gift Tax Minimum required, Minimum Required Distributions Qualified domestic relations order, Qualified domestic relations order. Free state income tax filing online Rollovers, Tax-Free Rollovers, Rollovers to and from 403(b) plans. Free state income tax filing online Second rollover, Second rollover. Free state income tax filing online Transfers, Transfer of Interest in 403(b) Contract E Elective deferrals, How Can Contributions Be Made to My 403(b) Account?, Elective deferrals only. Free state income tax filing online Eligible employees, Eligible employees. Free state income tax filing online , Church employee. Free state income tax filing online Employer's annual work period, Employer's annual work period. Free state income tax filing online Excess contributions, Excess Contributions Correcting, What Happens If I Have Excess Contributions? Determining, How Do I Know If I Have Excess Contributions? Excess amounts, Excess Annual Addition Excess deferrals, Excess Annual Addition Excess elective deferral, Excess Elective Deferral Excise tax, Excise Tax Excise tax Excess contributions, Excise Tax Reporting requirement, Reporting requirement. Free state income tax filing online F Free tax services, How To Get Tax Help, Free help with your tax return. Free state income tax filing online Full-time or part-time, Years of Service G Gift tax, Gift Tax H Help (see Tax help) I Incidental life insurance, Cost of Incidental Life Insurance Includible compensation, Includible Compensation 403(b) plan, Changes to Includible Compensation Figuring, Figuring Includible Compensation for Your Most Recent Year of Service Foreign missionaries, Changes to Includible Compensation Incidental life insurance, Cost of Incidental Life Insurance Self-employed ministers, Changes to Includible Compensation Includible compensation for your most recent year of service Definition, Definition. Free state income tax filing online L Limit on annual additions, Limit on Annual Additions Limit on elective deferrals, Limit on Elective Deferrals 15-year rule, 15-Year Rule Figuring, Figuring the Limit on Elective Deferrals General limit, General Limit M MAC (see Maximum amount contributable) Maximum amount contributable, Maximum Amount Contributable (MAC) Components, Components of Your MAC How to figure MAC, How Do I Figure My MAC? When to figure MAC, When Should I Figure My MAC? Minimum required distributions, Minimum Required Distributions Ministers, Ministers. Free state income tax filing online , Ministers and Church Employees Missing children, Reminder More information (see Tax help) Most recent year of service, Most Recent Year of Service Most recent year of service, figuring, Figuring Your Most Recent Year of Service N Nonelective contributions, How Can Contributions Be Made to My 403(b) Account?, Nonelective contributions only. Free state income tax filing online P Pre-tax contributions, Includible Compensation, Table 3-4. Free state income tax filing online Worksheet B. Free state income tax filing online Includible Compensation for Your Most Recent Year of Service1 , Rollovers to and from 403(b) plans. Free state income tax filing online , Worksheet B. Free state income tax filing online Includible Compensation for Your Most Recent Year of Service1 Publications (see Tax help) Q Qualified domestic relations order, Qualified domestic relations order. Free state income tax filing online R Reporting Contributions Self-employed ministers, Self-employed ministers. Free state income tax filing online Reporting contributions Chaplains, Chaplains. Free state income tax filing online Required distributions, Minimum Required Distributions Retirement savings contributions credit, What's New for 2013, What's New for 2014, Retirement Savings Contributions Credit (Saver's Credit) Rollovers, Distributions and Rollovers, Tax-Free Rollovers Roth contribution program, Roth contribution program. Free state income tax filing online S Salary reduction agreement, Limit on Elective Deferrals Self-employed ministers, Ministers. Free state income tax filing online , Who Can Set Up a 403(b) Account?, Self-employed minister. Free state income tax filing online , Self-employed ministers. Free state income tax filing online , Self-employed minister. Free state income tax filing online Suggestions for publication, Comments and suggestions. Free state income tax filing online T Tax help, How To Get Tax Help Transfers, Transfer of Interest in 403(b) Contract 90-24 transfer, Transfer of Interest in 403(b) Contract Conservatorship, Contract exchanges. Free state income tax filing online Direct-trustee-to-trustee, Direct trustee-to-trustee transfer. Free state income tax filing online Insolvency, Tax-free transfers for certain cash distributions. Free state income tax filing online Permissive service credit, Permissive service credit. Free state income tax filing online TTY/TDD information, How To Get Tax Help V Voluntary deductible contributions, Voluntary deductible contributions. Free state income tax filing online W What is a 403(b) plan?, What Is a 403(b) Plan? Y Years of service, Years of Service Church employees, Church employee. Free state income tax filing online , Changes to Years of Service Definition, Definition Employer's annual work period, Employer's annual work period. Free state income tax filing online Full year of service, Full year of service. Free state income tax filing online Full-time employee for the full year, Full-Time Employee for the Full Year Full-time for part of the year, Full-time for part of the year. Free state income tax filing online Other than full-time for the full year, Other Than Full-Time for the Full Year Part-time for the full year, Part-time for the full year. Free state income tax filing online Part-time for the part of the year, Part-time for part of the year. Free state income tax filing online Self-employed minister, Changes to Years of Service Total years of service, Total years of service. Free state income tax filing online Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

Employer ID Numbers (EINs)

中文 | 한국어 | TiếngViệt | Pусский

An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service. You must check with your state to make sure you need a state number or charter.

Apply for an EIN Online

Check out our Interview-style online EIN application. No need to file a Form SS-4! We ask you the questions and you give us the answers. The application includes embedded help topics and hyperlinked keywords and definitions so separate instructions aren’t needed. After all validations are done you will get your EIN immediately upon completion. You can then download, save, and print your confirmation notice. It’s fast, free, and user-friendly!

Change of Ownership or Structure

Generally, businesses need a new EIN when their ownership or structure has changed. Refer to "Do You Need a New EIN?" to determine if this applies to your business.

Verify Your EIN

If you want to verify your EIN, see the Lost or Misplaced Your EIN page for instructions.

Daily Limitation of an Employer Identification Number

Effective May 21, 2012, to ensure fair and equitable treatment for all taxpayers, the Internal Revenue Service will limit Employer Identification Number (EIN) issuance to one per responsible party per day. This limitation is applicable to all requests for EINs whether online or by fax or mail. We apologize for any inconvenience this may cause.

Page Last Reviewed or Updated: 03-Jan-2014

The Free State Income Tax Filing Online

Free state income tax filing online 2. Free state income tax filing online   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 state income tax filing online ” 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 state income tax filing online 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 state income tax filing online Those cases are called “abusive tax shelters. Free state income tax filing online ” An investment that is considered a tax shelter is subject to restrictions, including the requirement that it be disclosed, as discussed later. Free state income tax filing online Topics - This chapter discusses: Abusive Tax Shelters , Rules To Curb Abusive Tax Shelters , Investor Reporting , Penalties , and Whether To Invest . Free state income tax filing online 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 state income tax filing online Abusive Tax Shelters Abusive tax shelters are marketing schemes involving artificial transactions with little or no economic reality. Free state income tax filing online 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 state income tax filing online Despite appearances to the contrary, the taxpayer generally risks little. Free state income tax filing online 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 state income tax filing online 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 state income tax filing online (But see the appraisal requirements discussed under Rules To Curb Abusive Tax Shelters , later. Free state income tax filing online ) They are commonly marketed in terms of the ratio of tax deductions allegedly available to each dollar invested. Free state income tax filing online This ratio (or “write-off”) is frequently said to be several times greater than one-to-one. Free state income tax filing online 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 state income tax filing online However, you should ask the following questions, which might provide a clue to the abusive nature of the plan. Free state income tax filing online 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 state income tax filing online These provisions include the following. Free state income tax filing online Disclosure of reportable transactions. Free state income tax filing online   You must disclose information for each reportable transaction in which you participate. Free state income tax filing online See Reportable Transaction Disclosure Statement , later. Free state income tax filing online   Material advisors with respect to any reportable transaction must disclose information about the transaction on Form 8918, Material Advisor Disclosure Statement. Free state income tax filing online To determine whether you are a material advisor to a transaction, see the Instructions for Form 8918. Free state income tax filing online   Material advisors will receive a reportable transaction number for the disclosed reportable transaction. Free state income tax filing online They must provide this number to all persons to whom they acted as a material advisor. Free state income tax filing online They must provide the number at the time the transaction is entered into. Free state income tax filing online 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 state income tax filing online For information on penalties for failure to disclose and failure to maintain lists, see Internal Revenue Code sections 6707, 6707A, and 6708. Free state income tax filing online Requirement to maintain list. Free state income tax filing online   Material advisors must maintain a list of persons to whom they provide material aid, assistance, or advice on any reportable transaction. Free state income tax filing online 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 state income tax filing online See Regulations section 301. Free state income tax filing online 6112-1 for more information (including what information is required to be included on the list). Free state income tax filing online Confidentiality privilege. Free state income tax filing online   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 state income tax filing online Appraisal requirement for donated property. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online If you file electronically, see Form 8453, U. Free state income tax filing online S. Free state income tax filing online Individual Income Tax Transmittal for an IRS e-file Return, and its instructions. Free state income tax filing online For more information about appraisals, including exceptions, see Publication 561. Free state income tax filing online Passive activity loss and credit limits. Free state income tax filing online   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 state income tax filing online For more detailed information about determining and reporting income, losses, and credits from passive activities, see Publication 925. Free state income tax filing online Interest on penalties. Free state income tax filing online   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 state income tax filing online Accounting method restriction. Free state income tax filing online   Tax shelters generally cannot use the cash method of accounting. Free state income tax filing online Uniform capitalization rules. Free state income tax filing online   The uniform capitalization rules generally apply to producing property or acquiring it for resale. Free state income tax filing online Under those rules, the direct cost and part of the indirect cost of the property must be capitalized or included in inventory. Free state income tax filing online For more information, see Publication 538. Free state income tax filing online Denial of deduction for interest on an underpayment due to a reportable transaction. Free state income tax filing online   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 state income tax filing online This rule applies to reportable transactions entered into in tax years beginning after October 22, 2004. Free state income tax filing online 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 state income tax filing online The guidance is the conclusion of the IRS on how the law is applied to a particular set of facts. Free state income tax filing online Guidance is published in the Internal Revenue Bulletin for taxpayers' information and also for use by IRS officials. Free state income tax filing online 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 state income tax filing online 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 state income tax filing online 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 state income tax filing online Investor Reporting You may be required to file a reportable transaction disclosure statement. Free state income tax filing online Reportable Transaction Disclosure Statement Use Form 8886 to disclose information for each reportable transaction (discussed later) in which you participated. Free state income tax filing online Generally, you must attach Form 8886 to your return for each tax year in which you participated in the transaction. Free state income tax filing online 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 state income tax filing online 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 state income tax filing online  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 state income tax filing online If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form. Free state income tax filing online 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 state income tax filing online See Penalty for failure to disclose a reportable transaction , later under Penalties. Free state income tax filing online The following discussion briefly describes reportable transactions. Free state income tax filing online For more details, see the Instructions for Form 8886. Free state income tax filing online Reportable transaction. Free state income tax filing online   A reportable transaction is any of the following. Free state income tax filing online A listed transaction. Free state income tax filing online A confidential transaction. Free state income tax filing online A transaction with contractual protection. Free state income tax filing online A loss transaction. Free state income tax filing online A transaction of interest entered into after November 1, 2006. Free state income tax filing online Note. Free state income tax filing online Transactions with a brief asset holding period were removed from the definition of reportable transaction for transactions entered into after August 2, 2007. Free state income tax filing online Listed transaction. Free state income tax filing online   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 state income tax filing online These transactions have been identified in notices, regulations, and other published guidance issued by the IRS. Free state income tax filing online For a list of existing guidance, see Notice 2009-59 in Internal Revenue Bulletin 2009-31, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2009-31_IRB/ar07. Free state income tax filing online html. Free state income tax filing online Confidential transaction. Free state income tax filing online   A confidential transaction is offered to you under conditions of confidentiality and for which you have paid an advisor a minimum fee. Free state income tax filing online 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 state income tax filing online The transaction is treated as confidential even if the conditions of confidentiality are not legally binding on you. Free state income tax filing online Transaction with contractual protection. Free state income tax filing online   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 state income tax filing online For information on exceptions, see Revenue Procedure 2007-20 in Internal Revenue Bulletin 2007-7, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2007-07_IRB/ar15. Free state income tax filing online html. Free state income tax filing online Loss transaction. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online   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 state income tax filing online 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 state income tax filing online irs. Free state income tax filing online gov/irb/2004-50_IRB/ar11. Free state income tax filing online html. Free state income tax filing online Transaction of interest. Free state income tax filing online   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 state income tax filing online The IRS has identified the following transactions of interest. Free state income tax filing online “Toggling” grantor trusts as described in Notice 2007-73, 2007-36 I. Free state income tax filing online R. Free state income tax filing online B. Free state income tax filing online 545, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2007-36_IRB/ar20. Free state income tax filing online html. Free state income tax filing online Certain transactions involving contributions of a successor member interest in a limited liability company as described in Notice 2007-72, 2007-36 I. Free state income tax filing online R. Free state income tax filing online B. Free state income tax filing online 544, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2007-36_IRB/ar19. Free state income tax filing online html. Free state income tax filing online 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 state income tax filing online R. Free state income tax filing online B. Free state income tax filing online 1194, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2008-47_IRB/ar11. Free state income tax filing online html. Free state income tax filing online Certain transactions involving a U. Free state income tax filing online S. Free state income tax filing online 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 state income tax filing online R. Free state income tax filing online B. Free state income tax filing online 312, available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2009-03_IRB/ar10. Free state income tax filing online html. Free state income tax filing online   For updates to this list, go to www. Free state income tax filing online irs. Free state income tax filing online gov/Businesses/Corporations/Abusive-Tax-Shelters-and-Transactions. Free state income tax filing online Penalties Investing in an abusive tax shelter may lead to substantial expenses. Free state income tax filing online First, the promoter generally charges a substantial fee. Free state income tax filing online 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 state income tax filing online You may also be subject to the penalty for failure to pay tax. Free state income tax filing online These penalties are explained in the following paragraphs. Free state income tax filing online Accuracy-related penalties. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online Your failure to disclose a reportable transaction is a strong indication that you failed to act in good faith. Free state income tax filing online   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 state income tax filing online   The 20% penalties do not apply to any underpayment attributable to a reportable transaction understatement subject to an accuracy-related penalty (discussed later). Free state income tax filing online Negligence or disregard of rules or regulations. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online    Negligence includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Free state income tax filing online It also includes any failure to keep adequate books and records. Free state income tax filing online A return position that has a reasonable basis is not negligence. Free state income tax filing online   Disregard includes any careless, reckless, or intentional disregard of rules or regulations. Free state income tax filing online   The penalty for disregard of rules and regulations can be avoided if all the following are true. Free state income tax filing online You keep adequate books and records. Free state income tax filing online You have a reasonable basis for your position on the tax issue. Free state income tax filing online You make an adequate disclosure of your position. Free state income tax filing online Use Form 8275 to make your disclosure and attach it to your return. Free state income tax filing online To disclose a position contrary to a regulation, use Form 8275-R. Free state income tax filing online Use Form 8886 to disclose a reportable transaction (discussed earlier). Free state income tax filing online Substantial understatement of tax. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online 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 state income tax filing online   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 state income tax filing online In that way, you can avoid the substantial understatement penalty if you have a reasonable basis for your position on the tax issue. Free state income tax filing online Disclosure of the tax shelter item on a tax return does not reduce the amount of the understatement. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online Substantial valuation misstatement. Free state income tax filing online   In general, you are liable for a 20% penalty for a substantial valuation misstatement if all the following are true. Free state income tax filing online The value or adjusted basis of any property claimed on the return is 150% or more of the correct amount. Free state income tax filing online You underpaid your tax by more than $5,000 because of the misstatement. Free state income tax filing online You cannot establish that you had reasonable cause for the underpayment and that you acted in good faith. Free state income tax filing online   You may be assessed a penalty of 40% for a gross valuation misstatement. Free state income tax filing online 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 state income tax filing online The penalty rate is also 40% if the property's correct value or adjusted basis is zero. Free state income tax filing online Transaction lacking economic substance. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online   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 state income tax filing online   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 state income tax filing online   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 state income tax filing online Relevant facts include any facts affecting the tax treatment of the transaction. Free state income tax filing online    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 state income tax filing online Undisclosed foreign financial asset understatement. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online The penalty applies to any part of an underpayment related to the following undisclosed foreign financial assets. Free state income tax filing online Any foreign business you control, reportable on Form 5471, Information Return of U. Free state income tax filing online S. Free state income tax filing online Persons With Respect To Certain Foreign Corporations, or Form 8865, Return of U. Free state income tax filing online S. Free state income tax filing online Persons With Respect to Certain Foreign Partnerships. Free state income tax filing online Certain transfers of property to a foreign corporation or partnership, reportable on Form 926, Return by a U. Free state income tax filing online S. Free state income tax filing online Transferor of Property to a Foreign Corporation, or certain distributions to a foreign person, reportable on Form 8865. Free state income tax filing online Your ownership interest in certain foreign financial assets, temporarily reportable on Form 8275 or 8275-R. Free state income tax filing online    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 state income tax filing online See the Instructions for Form 8938 for details. Free state income tax filing online    Your acquisition, disposition, or substantial change in ownership interest in a foreign partnership, reportable on Form 8865. Free state income tax filing online 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 state income tax filing online Penalty for incorrect appraisals. Free state income tax filing online   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 state income tax filing online For details on the penalty amount and exceptions, see Publication 561. Free state income tax filing online Penalty for failure to disclose a reportable transaction. Free state income tax filing online   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 state income tax filing online For an individual, the minimum penalty is $5,000 and the maximum is $10,000 (or $100,000 for a listed transaction). Free state income tax filing online This penalty is in addition to any other penalty that may be imposed. Free state income tax filing online   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 state income tax filing online For information on rescission, see Revenue Procedure 2007-21 in Internal Revenue Bulletin 2007-9 available at www. Free state income tax filing online irs. Free state income tax filing online gov/irb/2007-09_IRB/ar12. Free state income tax filing online html. Free state income tax filing online Accuracy-related penalty for a reportable transaction understatement. Free state income tax filing online   If you have a reportable transaction understatement, you may have to pay a penalty equal to 20% of the amount of that understatement. Free state income tax filing online 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 state income tax filing online The penalty is 30% rather than 20% for the part of any reportable transaction understatement if the transaction was not properly disclosed. Free state income tax filing online You may not have to pay the 20% penalty if you meet the strengthened reasonable cause and good faith exception. Free state income tax filing online 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 state income tax filing online   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 state income tax filing online Civil fraud penalty. Free state income tax filing online   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 state income tax filing online Joint return. Free state income tax filing online   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 state income tax filing online Failure to pay tax. Free state income tax filing online   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 state income tax filing online 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 state income tax filing online Prev  Up  Next   Home   More Online Publications