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

Https Taxes Hrblock Com

Form 1040nr2012 Form 1040 EzFiling Free State ReturnsForm 1040ezHow To Amend 2012 Tax ReturnTax Return Forms 2012How Do I File An Amended Return For 20122011 Tax Forms 10401040x 2011 Form2012 Form 1040Turbotax Deluxe Federal E File State 2012 For Pc DownloadMyfreetaxsEz Tax Form 2014Irs Form 1040x 2011Unemployed Tax CreditTax Act 2012 Free Download1040 SFree Online Tax 2010Free 2011 Taxes1040x How To1040 Ez Online FilingHow To File A Amended Tax Return1040 V1040nr Tax ReturnFree State Tax Filing2011 1040a Tax FormTaxes 20122012 Irs 1040ez FormWww.irs.gov/form 1040xIrs Gov Ez FormI Forgot To File My 2012 Taxes1040ez Income Tax FormHow Do I Amend My 2012 Federal Tax ReturnAmend 2013 Tax ReturnFederal Tax Forms For 20111040 Ez 2011E File 2012 Taxes LateNy State Tax Forms 20111040ez Tax TablesHow To Fill Out A 1040ez Tax Form

Https Taxes Hrblock Com

Https taxes hrblock com Index A Abroad, citizens living, filing requirements, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad Absence, temporary, Temporary absences. Https taxes hrblock com , Temporary absences. Https taxes hrblock com , Temporary absences. Https taxes hrblock com Accounting periods, joint returns, Accounting period. Https taxes hrblock com Adopted child, Exception for adopted child. Https taxes hrblock com , Adopted child. Https taxes hrblock com , Adopted child. Https taxes hrblock com Taxpayer identification number, Taxpayer identification numbers for adoptees. Https taxes hrblock com Age Filing status determination, Age. Https taxes hrblock com Gross income and filing requirements (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Test, Age Test Aliens Dual-status (see Dual-status taxpayers) Nonresident (see Nonresident aliens) Alimony, Alimony. Https taxes hrblock com Alternative minimum tax (AMT), effect on filing requirements (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Amended returns, Joint Return After Separate Returns, Changing your mind. Https taxes hrblock com (see also Form 1040X) Change from itemized to standard deduction (or vice versa), Electing to itemize for state tax or other purposes. Https taxes hrblock com American citizens abroad, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad Annulled marriages, filing status, Annulled marriages. Https taxes hrblock com Armed forces Combat zone, signing return for spouse, Spouse in combat zone. Https taxes hrblock com Dependency allotments, Armed Forces dependency allotments. Https taxes hrblock com GI Bill benefits, Tuition payments and allowances under the GI Bill. Https taxes hrblock com Military quarters allotments, Tax-exempt military quarters allowances. Https taxes hrblock com Assistance (see Tax help) ATINs (Adoption taxpayer identification numbers), Taxpayer identification numbers for adoptees. Https taxes hrblock com B Birth of child, Death or birth. Https taxes hrblock com Blind persons, standard deduction, Higher Standard Deduction for Blindness C Canada, resident of, U. Https taxes hrblock com S. Https taxes hrblock com citizen or resident alien. Https taxes hrblock com , Citizen or Resident Test, Child in Canada or Mexico. Https taxes hrblock com Capital expenses, Capital expenses. Https taxes hrblock com Child born alive, Child born alive. Https taxes hrblock com Child care expenses, Child care expenses. Https taxes hrblock com Child custody, Custodial parent and noncustodial parent. Https taxes hrblock com Child support under pre-1985 agreement, Child support under pre-1985 agreement. Https taxes hrblock com Child tax credit, Child tax credit. Https taxes hrblock com Child, qualifying, Qualifying Child Children Adopted child (see Adoption) Adoption (see Adopted child) Birth of child, Death or birth. Https taxes hrblock com , Death or birth. Https taxes hrblock com Claiming parent, when child is head of household, Special rule for parent. Https taxes hrblock com Custody of, Custodial parent and noncustodial parent. Https taxes hrblock com Death of child, Death or birth. Https taxes hrblock com , Death or birth. Https taxes hrblock com Dividends of, Unearned income. Https taxes hrblock com Filing requirements as dependents (Table 2), Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents Investment income of child under age 18, Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents , Unearned income. Https taxes hrblock com Kidnapped, Kidnapped child. Https taxes hrblock com , Kidnapped child. Https taxes hrblock com Social security number, Social Security Numbers for Dependents Stillborn, Stillborn child. Https taxes hrblock com Church employees, filing requirements (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Citizen or resident test, Citizen or Resident Test Citizens outside U. Https taxes hrblock com S. Https taxes hrblock com , filing requirements, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad Common law marriage, Considered married. Https taxes hrblock com Community property states, Community property states. Https taxes hrblock com Cousin, Cousin. Https taxes hrblock com Custody of child, Custodial parent and noncustodial parent. Https taxes hrblock com D Death Of child, Death or birth of child. Https taxes hrblock com Of dependent, Death or birth. Https taxes hrblock com , Death or birth. Https taxes hrblock com Of spouse, Spouse died during the year. Https taxes hrblock com , Spouse died. Https taxes hrblock com , Spouse died before signing. Https taxes hrblock com , Death of spouse. Https taxes hrblock com Decedents, Spouse died during the year. Https taxes hrblock com , Decedent's final return. Https taxes hrblock com (see also Death of spouse) Filing requirements, Deceased Persons Deductions Personal exemption, Personal Exemptions Standard deduction, Standard Deduction Dependent taxpayer test, Dependent Taxpayer Test Dependents Birth of, Death or birth. Https taxes hrblock com Born and died within year, Born and died in 2013. Https taxes hrblock com Child's earnings, Child's earnings. Https taxes hrblock com Death of, Death or birth. Https taxes hrblock com Earned income, Earned income. Https taxes hrblock com Exemption for, Exemptions for Dependents Filing requirements, Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents , Dependents Married, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Not allowed to claim dependents, Dependent Taxpayer Test Qualifying child, Qualifying Child Qualifying relative, Qualifying Relative Social security number, Social Security Numbers for Dependents, Taxpayer identification numbers for adoptees. Https taxes hrblock com Standard deduction for, Standard Deduction for Dependents Unearned income, Unearned income. Https taxes hrblock com Disabled Child, Permanently and totally disabled. Https taxes hrblock com Dependent, Disabled dependent working at sheltered workshop. Https taxes hrblock com Divorced parents, Children of divorced or separated parents (or parents who live apart). Https taxes hrblock com Divorced taxpayers Child custody, Custodial parent and noncustodial parent. Https taxes hrblock com Filing status, Divorced persons. Https taxes hrblock com , Divorce and remarriage. Https taxes hrblock com , Divorced persons. Https taxes hrblock com Joint returns, responsibility for, Divorced taxpayer. Https taxes hrblock com Personal exemption, Divorced or separated spouse. Https taxes hrblock com Domestic help, no exemption for, Housekeepers, maids, or servants. Https taxes hrblock com Dual-status taxpayers Exemptions, Dual-status taxpayers. Https taxes hrblock com Joint returns not available, Nonresident alien or dual-status alien. Https taxes hrblock com E Earned income Defined for purposes of standard deduction, Earned income defined. Https taxes hrblock com Dependent filing requirements (Table 2), Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents Earned income credit Two persons with same qualifying child, Special Rule for Qualifying Child of More Than One Person Elderly persons Home for the aged, Home for the aged. Https taxes hrblock com Standard deduction for age 65 or older, Higher Standard Deduction for Age (65 or Older) Equitable relief, Innocent spouse, Relief from joint responsibility. Https taxes hrblock com Exemptions, Exemptions, Taxpayer identification numbers for adoptees. Https taxes hrblock com Dependents, Exemptions for Dependents Personal (see Personal exemption) F Fair rental value, Fair rental value defined. Https taxes hrblock com Figures (see Tables and figures) Filing requirements, Who Must File, Filing Status Filing status, Filing Status, Qualifying Widow(er) With Dependent Child Annulled marriages, Annulled marriages. Https taxes hrblock com Change to Joint return after separate returns, Joint Return After Separate Returns Separate returns after joint return, Separate Returns After Joint Return, Kidnapped child. Https taxes hrblock com Determination of, Filing status. Https taxes hrblock com , Filing Status Head of household, Head of household or qualifying widow(er) with dependent child. Https taxes hrblock com , Head of Household Marital status, determination of, Marital Status Married filing jointly (see Joint returns) Married filing separately (see Married filing separately) Unmarried persons (see Single taxpayers) Food benefits, Support provided by the state (welfare, food benefits, housing, etc. Https taxes hrblock com ). Https taxes hrblock com Foreign employment, filing requirements, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad Foreign students, Foreign students' place of residence. Https taxes hrblock com Form 1040 Personal exemption, Form 1040 filers. Https taxes hrblock com Social security numbers, Social Security Numbers for Dependents Use of, How to file. Https taxes hrblock com , How to file. Https taxes hrblock com , How to file. Https taxes hrblock com Form 1040A Personal exemption, Form 1040A filers. Https taxes hrblock com Social security numbers, Social Security Numbers for Dependents Use of, How to file. Https taxes hrblock com , How to file. Https taxes hrblock com , How to file. Https taxes hrblock com Form 1040EZ Personal exemption, Form 1040EZ filers. Https taxes hrblock com Use of, How to file. Https taxes hrblock com , How to file. Https taxes hrblock com Form 1040X Change of filing status, Joint Return After Separate Returns Itemized deductions, change to standard deduction, Changing your mind. Https taxes hrblock com Standard deduction, change to itemized deductions, Changing your mind. Https taxes hrblock com Form 1099-B, Form 1099-B received. Https taxes hrblock com Form 8814, parents' election to report child's interest and dividends, Election to report child's unearned income on parent's return. Https taxes hrblock com Form 8857, innocent spouse relief, Relief from joint responsibility. Https taxes hrblock com Form SS-5, social security number request, No SSN. Https taxes hrblock com Form W-7, individual taxpayer identification number request, Taxpayer identification numbers for aliens. Https taxes hrblock com Form W-7A, adoption taxpayer identification number request, Taxpayer identification numbers for adoptees. Https taxes hrblock com Foster care payments and expenses, Foster care payments and expenses. Https taxes hrblock com , Foster care. Https taxes hrblock com Foster child, Foster child. Https taxes hrblock com , Foster care payments and expenses. Https taxes hrblock com , Foster child. Https taxes hrblock com , Foster care. Https taxes hrblock com Free tax services, Free help with your tax return. Https taxes hrblock com Funeral expenses, Do Not Include in Total Support G GI Bill benefits, Tuition payments and allowances under the GI Bill. Https taxes hrblock com Gross income Defined, Gross income. Https taxes hrblock com Filing requirements (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers Dependent filing requirements (Table 2), Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents Test, Gross Income Test Group-term life insurance, Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return H Head of household, Head of Household, Kidnapped child. Https taxes hrblock com Exemption for spouse, Head of household. Https taxes hrblock com Filing requirements (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers Health insurance premiums, Medical insurance premiums. Https taxes hrblock com Help (see Tax help) Home Aged, home for, Home for the aged. Https taxes hrblock com Cost of keeping up, Keeping Up a Home Household workers, no exemption for, Housekeepers, maids, or servants. Https taxes hrblock com I Income Gross, Gross Income Test Tax exempt, Tax-exempt income. Https taxes hrblock com Individual retirement arrangements (IRAs) Filing requirements (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Married filing separately, Individual retirement arrangements (IRAs). Https taxes hrblock com Individual taxpayer identification numbers (ITINs), Reminders, Taxpayer identification numbers for aliens. Https taxes hrblock com Innocent spouse relief, Relief from joint responsibility. Https taxes hrblock com Insurance premiums Life, Do Not Include in Total Support Medical, Medical insurance premiums. Https taxes hrblock com IRAs (see Individual retirement arrangements (IRAs)) Itemized deductions Changing from standard to itemized deduction (or vice versa), Changing your mind. Https taxes hrblock com Choosing to itemize, Who Should Itemize Married filing separately, Married persons who filed separate returns. Https taxes hrblock com When to itemize, When to itemize. Https taxes hrblock com ITINs (Individual taxpayer identification numbers), Taxpayer identification numbers for aliens. Https taxes hrblock com J Joint return test, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Joint returns, Married Filing Jointly, Nonresident alien or dual-status alien. Https taxes hrblock com Dependents on, Joint return. Https taxes hrblock com Personal exemption, Joint return. Https taxes hrblock com K Kidnapped children Qualifying child, Kidnapped child. Https taxes hrblock com Qualifying relative, Kidnapped child. Https taxes hrblock com Widow(er) with dependent child, Death or birth. Https taxes hrblock com L Life insurance premiums, Do Not Include in Total Support Local income taxes, itemized deductions, Electing to itemize for state tax or other purposes. Https taxes hrblock com Local law violated, Local law violated. Https taxes hrblock com Lodging, Lodging. Https taxes hrblock com Losses, rental real estate, Rental activity losses. Https taxes hrblock com M Marital status, determination of, Marital Status Married dependents, filing joint return, Joint Return Test, Joint Return Test (To Be a Qualifying Child) Married filing jointly (see Joint returns) Married filing separately, Married Filing Separately Changing method from or to itemized deductions, Changing your mind. Https taxes hrblock com Exemption for spouse, Separate return. Https taxes hrblock com Itemized deductions, Married persons who filed separate returns. Https taxes hrblock com Married taxpayers, Married Filing Jointly (see also Joint returns) Age 65 or older spouse, standard deduction, Higher Standard Deduction for Age (65 or Older), Spouse 65 or Older or Blind Blind spouse, standard deduction, Higher Standard Deduction for Blindness, Spouse 65 or Older or Blind Dual-status alien spouse, Nonresident alien or dual-status alien. Https taxes hrblock com Filing status, Married persons. Https taxes hrblock com Medical insurance premiums, Medical insurance premiums. Https taxes hrblock com Medical savings accounts (MSAs, effect on filing requirements (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Medicare taxes, not support, Do Not Include in Total Support Member of household or relationship test, Member of Household or Relationship Test Mexico, resident of, U. Https taxes hrblock com S. Https taxes hrblock com citizen or resident alien. Https taxes hrblock com , Citizen or Resident Test, Child in Canada or Mexico. Https taxes hrblock com Military (see Armed forces) Missing children, photographs of in IRS publications, Reminders Multiple support agreement, Multiple Support Agreement N National of the United States, U. Https taxes hrblock com S. Https taxes hrblock com national. Https taxes hrblock com Nonresident aliens, Nonresident aliens. Https taxes hrblock com Dependents, Taxpayer identification numbers for aliens. Https taxes hrblock com Exemptions, Nonresident aliens. Https taxes hrblock com Joint return, Nonresident alien or dual-status alien. Https taxes hrblock com Spouse, Nonresident alien spouse. Https taxes hrblock com Taxpayer identification number, Taxpayer identification numbers for aliens. Https taxes hrblock com O Overseas taxpayers, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad P Parent, claiming head of household for, Special rule for parent. Https taxes hrblock com Parents who never married, Parents who never married. Https taxes hrblock com Parents, divorced or separated, Children of divorced or separated parents (or parents who live apart). Https taxes hrblock com Penalty, failure to file, Who Must File Personal exemption, Personal Exemptions Photographs of missing children in IRS publications, Reminders Publications (see Tax help) Puerto Rico, residents of, Residents of Puerto Rico Q Qualifying Child, Qualifying Child Relative, Qualifying Relative Surviving spouse, Qualifying Widow(er) With Dependent Child Widow/widower, Qualifying Widow(er) With Dependent Child R Recapture taxes, Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Relationship test, Relationship Test, Member of Household or Relationship Test Relative, qualifying, Qualifying Relative Remarriage after divorce, Divorce and remarriage. Https taxes hrblock com Rental losses, Rental activity losses. Https taxes hrblock com Residency test, Residency Test S Same-sex marriage Filing status, Same-sex marriage. Https taxes hrblock com Scholarships, Earned income. Https taxes hrblock com , Scholarships. Https taxes hrblock com , Gross income defined. Https taxes hrblock com , Do Not Include in Total Support , Earned income defined. Https taxes hrblock com Self-employed persons Filing requirements (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Gross income, Self-employed persons. Https taxes hrblock com Separate returns (see Married filing separately) Separated parents, Children of divorced or separated parents (or parents who live apart). Https taxes hrblock com Separated taxpayers Filing status, Considered married. Https taxes hrblock com , Married persons living apart. Https taxes hrblock com Living apart but not legally separated, Considered married. Https taxes hrblock com Personal exemption, Divorced or separated spouse. Https taxes hrblock com Signatures, joint returns, Signing a joint return. Https taxes hrblock com Single taxpayers Filing status, Unmarried persons. Https taxes hrblock com , Single Gross income filing requirements (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers How to file and forms, How to file. Https taxes hrblock com Personal exemption, Your Own Exemption Social security and Medicare taxes Reporting of (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Support, not included in, Do Not Include in Total Support Social security benefits, Social security benefits. Https taxes hrblock com Social security numbers (SSNs) for dependents, Social Security Numbers for Dependents Spouse Deceased, Spouse died. Https taxes hrblock com , Spouse died before signing. Https taxes hrblock com , Death of spouse. Https taxes hrblock com Dual-status alien spouse, Nonresident alien or dual-status alien. Https taxes hrblock com Exemption for, Your Spouse's Exemption Innocent spouse relief, Relief from joint responsibility. Https taxes hrblock com Nonresident alien, Nonresident alien spouse. Https taxes hrblock com Signing joint returns, Signing a joint return. Https taxes hrblock com Surviving (see Surviving spouse) SSNs (see Social security numbers (SSNs) for dependents) Standard deduction, What's New, Standard Deduction, Married persons who filed separate returns. Https taxes hrblock com Married filing jointly, Married Filing Jointly State or local income taxes, Electing to itemize for state tax or other purposes. Https taxes hrblock com Stillborn child, Stillborn child. Https taxes hrblock com Students Defined, Student defined. Https taxes hrblock com Foreign, Foreign students' place of residence. Https taxes hrblock com Support test Qualifying child, Support Test (To Be a Qualifying Child) Qualifying relative, Support Test (To Be a Qualifying Relative) Surviving spouse Death of spouse (see Death of spouse) Gross income filing requirements (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers Single filing status, Widow(er). Https taxes hrblock com Widow(er) with dependent child, Qualifying Widow(er) With Dependent Child, How to file. Https taxes hrblock com , Death or birth. Https taxes hrblock com T Tables and figures, Keeping Up a Home, Worksheet 2. Https taxes hrblock com Worksheet for Determining Support (see also Worksheets) Filing requirements Dependents (Table 2), Table 2. Https taxes hrblock com 2013 Filing Requirements for Dependents Gross income levels (Table 1), Table 1. Https taxes hrblock com 2013 Filing Requirements Chart for Most Taxpayers Other situations requiring filing (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Tax help, How To Get Tax Help Tax returns Amended (see Form 1040X) Filing of (see Filing requirements) Joint returns (see Joint returns) Who must file, What's New, Who Must File, Filing Requirements for Most Taxpayers, Who Should File Tax-exempt income, Tax-exempt income. Https taxes hrblock com Taxes, not support, Do Not Include in Total Support Temporary absences, Temporary absences. Https taxes hrblock com , Temporary absences. Https taxes hrblock com Tiebreaker rules, Tiebreaker rules. Https taxes hrblock com Tips, reporting of (Table 3), Table 3. Https taxes hrblock com Other Situations When You Must File a 2013 Return Total support, Total Support Tuition, benefits under GI Bill, Tuition payments and allowances under the GI Bill. Https taxes hrblock com U U. Https taxes hrblock com S. Https taxes hrblock com citizen or resident, Citizen or Resident Test U. Https taxes hrblock com S. Https taxes hrblock com citizens filing abroad, filing requirements Filing requirements, U. Https taxes hrblock com S. Https taxes hrblock com Citizens or Resident Aliens Living Abroad U. Https taxes hrblock com S. Https taxes hrblock com national, U. Https taxes hrblock com S. Https taxes hrblock com national. Https taxes hrblock com U. Https taxes hrblock com S. Https taxes hrblock com possessions, income from, Individuals With Income From U. Https taxes hrblock com S. Https taxes hrblock com Possessions Unmarried persons (see Single taxpayers) W Welfare benefits, Support provided by the state (welfare, food benefits, housing, etc. Https taxes hrblock com ). Https taxes hrblock com What's New, What's New Widow/widower (see Surviving spouse) Worksheets Exemption Phaseout, Worksheet 3. Https taxes hrblock com Worksheet for Determining the Deduction for Exemptions Head of household status and cost of keeping up home, Keeping Up a Home Support test, Worksheet 2. Https taxes hrblock com Worksheet for Determining Support Prev  Up     Home   More Online Publications
Español

Government Accountability Office (GAO)

The Government Accountability Office gathers information to help Congress determine how effectively executive branch agencies are doing their jobs.

Contact the Agency or Department

Website: Government Accountability Office (GAO)

E-mail:

Address: 441 G St., NW
Washington, DC 20548

Phone Number: (202) 512-3000

The Https Taxes Hrblock Com

Https taxes hrblock com Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Https taxes hrblock com Proc. Https taxes hrblock com 2013-16 Table of Contents SECTION 1. Https taxes hrblock com PURPOSE SECTION 2. Https taxes hrblock com BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Https taxes hrblock com BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Https taxes hrblock com FEDERAL INCOME TAX TREATMENT SECTION 5. Https taxes hrblock com INFORMATION-REPORTING OBLIGATIONS SECTION 6. Https taxes hrblock com HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Https taxes hrblock com PENALTY RELIEF FOR 2012 SECTION 8. Https taxes hrblock com SCOPE AND EFFECTIVE DATE SECTION 9. Https taxes hrblock com DRAFTING INFORMATION SECTION 1. Https taxes hrblock com PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Https taxes hrblock com Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Https taxes hrblock com In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Https taxes hrblock com Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Https taxes hrblock com The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Https taxes hrblock com SECTION 2. Https taxes hrblock com BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Https taxes hrblock com 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Https taxes hrblock com A description of the program can be found at www. Https taxes hrblock com makinghomeaffordable. Https taxes hrblock com gov. Https taxes hrblock com . Https taxes hrblock com 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Https taxes hrblock com These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Https taxes hrblock com . Https taxes hrblock com 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Https taxes hrblock com The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Https taxes hrblock com However, as noted in section 2. Https taxes hrblock com 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Https taxes hrblock com (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Https taxes hrblock com ”) . Https taxes hrblock com 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Https taxes hrblock com . Https taxes hrblock com 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Https taxes hrblock com The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Https taxes hrblock com (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Https taxes hrblock com ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Https taxes hrblock com Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Https taxes hrblock com Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Https taxes hrblock com . Https taxes hrblock com 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Https taxes hrblock com (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Https taxes hrblock com ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Https taxes hrblock com . Https taxes hrblock com 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Https taxes hrblock com If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Https taxes hrblock com These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Https taxes hrblock com The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Https taxes hrblock com The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Https taxes hrblock com For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Https taxes hrblock com ” . Https taxes hrblock com 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Https taxes hrblock com . Https taxes hrblock com 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Https taxes hrblock com 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Https taxes hrblock com . Https taxes hrblock com 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Https taxes hrblock com SECTION 3. Https taxes hrblock com BACKGROUND—APPLICABLE PROVISIONS OF LAW . Https taxes hrblock com 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Https taxes hrblock com See § 61(a)(12). Https taxes hrblock com . Https taxes hrblock com 02 Under § 1. Https taxes hrblock com 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Https taxes hrblock com In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Https taxes hrblock com However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Https taxes hrblock com See § 1. Https taxes hrblock com 1001-3(c)(6). Https taxes hrblock com . Https taxes hrblock com 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Https taxes hrblock com 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Https taxes hrblock com If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Https taxes hrblock com See also § 1. Https taxes hrblock com 61-12(c). Https taxes hrblock com . Https taxes hrblock com 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Https taxes hrblock com If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Https taxes hrblock com See, e. Https taxes hrblock com g. Https taxes hrblock com , §§ 1. Https taxes hrblock com 1272-1(c)(5) and 1. Https taxes hrblock com 1274-2(d). Https taxes hrblock com . Https taxes hrblock com 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Https taxes hrblock com Section 108(a)(1)(E) and 108(a)(1)(B). Https taxes hrblock com (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Https taxes hrblock com ) . Https taxes hrblock com 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Https taxes hrblock com . Https taxes hrblock com 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Https taxes hrblock com See §§ 108(h) and 163(h)(3)(B)(i). Https taxes hrblock com . Https taxes hrblock com 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Https taxes hrblock com Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Https taxes hrblock com . Https taxes hrblock com 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Https taxes hrblock com . Https taxes hrblock com 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Https taxes hrblock com Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Https taxes hrblock com . Https taxes hrblock com 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Https taxes hrblock com See § 108(h)(1). Https taxes hrblock com If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Https taxes hrblock com See § 108(b). Https taxes hrblock com For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Https taxes hrblock com . Https taxes hrblock com 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Https taxes hrblock com See Form 982 instructions and Publication 4681. Https taxes hrblock com This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Https taxes hrblock com . Https taxes hrblock com 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Https taxes hrblock com See Notice 2003-18, 2003-1 C. Https taxes hrblock com B. Https taxes hrblock com 699, and Rev. Https taxes hrblock com Rul. Https taxes hrblock com 79-356, 1979-2 C. Https taxes hrblock com B. Https taxes hrblock com 28. Https taxes hrblock com However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Https taxes hrblock com See Rev. Https taxes hrblock com Rul. Https taxes hrblock com 2005-46, 2005-2 C. Https taxes hrblock com B. Https taxes hrblock com 120, and Rev. Https taxes hrblock com Rul. Https taxes hrblock com 75-246, 1975-1 C. Https taxes hrblock com B. Https taxes hrblock com 24. Https taxes hrblock com . Https taxes hrblock com 14 Under § 451 and § 1. Https taxes hrblock com 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Https taxes hrblock com . Https taxes hrblock com 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Https taxes hrblock com See § 6041(a) and (d) and § 1. Https taxes hrblock com 6041-1(a)(1) and (b). Https taxes hrblock com . Https taxes hrblock com 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Https taxes hrblock com See § 6050P(a)-(c) and §§ 1. Https taxes hrblock com 6050P-1(a) and 1. Https taxes hrblock com 6050P-2(a) and (d). Https taxes hrblock com . Https taxes hrblock com 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Https taxes hrblock com These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Https taxes hrblock com Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Https taxes hrblock com ” . Https taxes hrblock com 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Https taxes hrblock com These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Https taxes hrblock com Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Https taxes hrblock com SECTION 4. Https taxes hrblock com FEDERAL INCOME TAX TREATMENT . Https taxes hrblock com 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Https taxes hrblock com See § 1. Https taxes hrblock com 1001-3. Https taxes hrblock com At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Https taxes hrblock com See also § 61(a)(12) and § 1. Https taxes hrblock com 61-12(c). Https taxes hrblock com . Https taxes hrblock com 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Https taxes hrblock com Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Https taxes hrblock com Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Https taxes hrblock com . Https taxes hrblock com 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Https taxes hrblock com Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Https taxes hrblock com . Https taxes hrblock com 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Https taxes hrblock com Therefore, for purposes of § 1. Https taxes hrblock com 1001-3, the date of the modification is the date of the permanent modification. Https taxes hrblock com . Https taxes hrblock com 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Https taxes hrblock com 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Https taxes hrblock com Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Https taxes hrblock com The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Https taxes hrblock com . Https taxes hrblock com 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Https taxes hrblock com . Https taxes hrblock com 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Https taxes hrblock com This is consistent with Rev. Https taxes hrblock com Rul. Https taxes hrblock com 2009-19, 2009-28 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 111, which addressed the treatment of Pay-for-Performance Success Payments. Https taxes hrblock com . Https taxes hrblock com 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Https taxes hrblock com If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Https taxes hrblock com . Https taxes hrblock com 09 As described in section 2. Https taxes hrblock com 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Https taxes hrblock com To the extent that the HAMP-PRA borrower is described in section 4. Https taxes hrblock com 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Https taxes hrblock com To the extent that the HAMP-PRA borrower is described in section 4. Https taxes hrblock com 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Https taxes hrblock com SECTION 5. Https taxes hrblock com INFORMATION-REPORTING OBLIGATIONS . Https taxes hrblock com 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Https taxes hrblock com A copy of this form is required to be furnished to the borrower. Https taxes hrblock com . Https taxes hrblock com 02 As stated in sections 4. Https taxes hrblock com 01 and 4. Https taxes hrblock com 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Https taxes hrblock com . Https taxes hrblock com 03 An investor is an applicable entity that is required under § 1. Https taxes hrblock com 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Https taxes hrblock com Under § 1. Https taxes hrblock com 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Https taxes hrblock com Identifiable events determine when Forms 1099-C have to be issued. Https taxes hrblock com Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Https taxes hrblock com This rule under § 1. Https taxes hrblock com 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Https taxes hrblock com . Https taxes hrblock com 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Https taxes hrblock com That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Https taxes hrblock com . Https taxes hrblock com 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Https taxes hrblock com 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Https taxes hrblock com Under § 6041, these payments are not subject to information reporting. Https taxes hrblock com See Notice 2011-14, 2011-11 I. Https taxes hrblock com R. Https taxes hrblock com B. Https taxes hrblock com 544, 546. Https taxes hrblock com . Https taxes hrblock com 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Https taxes hrblock com 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Https taxes hrblock com The payment is subject to the information reporting requirements of § 6041, as described in section 3. Https taxes hrblock com 15 of this revenue procedure. Https taxes hrblock com Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Https taxes hrblock com SECTION 6. Https taxes hrblock com HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Https taxes hrblock com 01 In general. Https taxes hrblock com The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Https taxes hrblock com As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Https taxes hrblock com Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Https taxes hrblock com A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Https taxes hrblock com 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Https taxes hrblock com Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Https taxes hrblock com 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Https taxes hrblock com . Https taxes hrblock com 02 HAMP-PRA borrower options. Https taxes hrblock com A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Https taxes hrblock com 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Https taxes hrblock com If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Https taxes hrblock com 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Https taxes hrblock com . Https taxes hrblock com 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Https taxes hrblock com (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Https taxes hrblock com (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Https taxes hrblock com 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Https taxes hrblock com This section 6. Https taxes hrblock com 03(2) applies only if the change to reporting the discharge using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Https taxes hrblock com To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Https taxes hrblock com (3) Example. Https taxes hrblock com The following example illustrates the application of section 6. Https taxes hrblock com 03(2) of this revenue procedure. Https taxes hrblock com In 2010, B’s basis in B’s principal residence was $330,000. Https taxes hrblock com In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Https taxes hrblock com B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Https taxes hrblock com The trial period plan effective date also fell in 2010. Https taxes hrblock com B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Https taxes hrblock com 02(2) of this revenue procedure. Https taxes hrblock com That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Https taxes hrblock com The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Https taxes hrblock com For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure. Https taxes hrblock com Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Https taxes hrblock com (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Https taxes hrblock com 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Https taxes hrblock com Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Https taxes hrblock com 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Https taxes hrblock com Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Https taxes hrblock com (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Https taxes hrblock com 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Https taxes hrblock com The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Https taxes hrblock com (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Https taxes hrblock com The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Https taxes hrblock com The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Https taxes hrblock com . Https taxes hrblock com 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Https taxes hrblock com (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Https taxes hrblock com Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Https taxes hrblock com Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Https taxes hrblock com If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Https taxes hrblock com (2) A HAMP-PRA borrower who has been using the method described in section 6. Https taxes hrblock com 02(1) of this revenue procedure may change to the method described in section 6. Https taxes hrblock com 02(2) but must comply with the consistency and open-year requirements described in section 6. Https taxes hrblock com 01 of this revenue procedure. Https taxes hrblock com SECTION 7. Https taxes hrblock com PENALTY RELIEF FOR 2012 . Https taxes hrblock com 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Https taxes hrblock com 03 through 5. Https taxes hrblock com 04 and section 8. Https taxes hrblock com 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Https taxes hrblock com 01 through 4. Https taxes hrblock com 04 of this revenue procedure) that is required to be reported for 2012. Https taxes hrblock com (2) Not later than March 28, 2013, a statement is sent to the Service. Https taxes hrblock com It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Https taxes hrblock com 01(1) of this revenue procedure. Https taxes hrblock com The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Https taxes hrblock com 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Https taxes hrblock com 06 and 8. Https taxes hrblock com 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Https taxes hrblock com . Https taxes hrblock com 03 Section 8. Https taxes hrblock com 03 and 8. Https taxes hrblock com 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Https taxes hrblock com SECTION 8. Https taxes hrblock com SCOPE AND EFFECTIVE DATE . Https taxes hrblock com 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Https taxes hrblock com . Https taxes hrblock com 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Https taxes hrblock com . Https taxes hrblock com 03 Because of the effective date in section 8. Https taxes hrblock com 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Https taxes hrblock com 03 through 5. Https taxes hrblock com 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Https taxes hrblock com 03 through 5. Https taxes hrblock com 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Https taxes hrblock com . Https taxes hrblock com 04 Because of the effective date in section 8. Https taxes hrblock com 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Https taxes hrblock com 06 of this revenue procedure. Https taxes hrblock com SECTION 9. Https taxes hrblock com DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Https taxes hrblock com Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Https taxes hrblock com Pflanz and Sheldon A. Https taxes hrblock com Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Https taxes hrblock com Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Https taxes hrblock com For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Https taxes hrblock com Prev  Up  Next   Home   More Internal Revenue Bulletins