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Vita Tax Program

Vita tax program Publication 957 - Main Content Table of Contents 1. Vita tax program What is Back Pay?Reporting Back Pay Back Pay Under a Statute Nonstatutory Back Pay Format for Report to the SSA Questions 2. Vita tax program Special Wage PaymentsReporting Special Wage Payments Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments Nonqualified Deferred Compensation and Section 457 Plans Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) PlansSpecial rule for box 11 of Form W-2 (distributions and deferral in the same year). Vita tax program 1. Vita tax program What is Back Pay? Back pay is pay received in a tax year(s) for actual or deemed employment in an earlier tax year(s). Vita tax program For social security coverage and benefit purposes, all back pay, whether or not under a statute, is wages if it is payment for covered employment. Vita tax program Damages for personal injury, interest, penalties, and legal fees included with back pay awards are not wages. Vita tax program Report all back pay. Vita tax program However, the tax year(s) for which back pay is credited as wages for social security purposes is different if it is awarded under a statute. Vita tax program See Back Pay Under a Statute , later, for more information. Vita tax program Reporting Back Pay The Internal Revenue Service (IRS) and the SSA consider back pay awards to be wages. Vita tax program However, for income tax purposes, the IRS treats all back pay as wages in the year paid. Vita tax program Employers should use Form W-2, Wage and Tax Statement, or electronic wage reports to report back pay as wages in the year they actually pay the employee. Vita tax program The SSA no longer accepts reports on tapes, cartridges, and diskettes. Vita tax program Example. Vita tax program In 2012, Terry Morris earned wages of $50,000. Vita tax program In the same year, she received $100,000 in settlement of a back pay case against her employer that covered the periods January 2007 through December 2011. Vita tax program Her employer properly reflected social security wages of $110,100 and Medicare wages of $150,000 on her 2012 Form W-2. Vita tax program However, if an employer did not include back pay wages on a previously filed Form W-2, magnetic media, or electronically filed wage report, the employer should prepare a wage correction report, Form W-2c, Corrected Wage and Tax Statement, or electronically filed report, to add the back pay award to the wages previously reported. Vita tax program Example. Vita tax program If, in the above example, Terry Morris' employer had prepared her 2012 Form W-2 reporting social security and Medicare wages of only $50,000 each, the employer would have to correct that report. Vita tax program A Form W-2c correcting the 2012 Form W-2 would show previously reported social security and Medicare wages of $50,000 and the correct amount of $110,100 for social security wages and $150,000 for Medicare wages. Vita tax program SSA treatment of back pay under a statute. Vita tax program   Under the law, the SSA credits back pay awarded under a statute to an individual's earnings record in the period(s) the wages should have been paid. Vita tax program This is important because wages not credited to the proper year may result in lower social security benefits or failure to meet the requirements for benefits. Vita tax program   However, back pay under statute payments will remain posted to the employee's social security earnings record in the year reported on Form W-2 (or Form W-2c) unless the employer or employee notifies the SSA (in a separate, special report) of the back pay under a statute payment. Vita tax program Then, the SSA can allocate the statutory back pay to the appropriate periods. Vita tax program   If a back pay award is not made under a statute, the SSA credits back pay as wages in the year paid. Vita tax program    If employers do notify the SSA of this payment, they should prepare a special report (with the information noted below) and send it to: Social Security Administration Attn: CPS Back Pay Staff 7-B-15 SWT 1500 Woodlawn Drive Baltimore, MD 21241-0001 Be sure to send this special report to the above address because the SSA handles it separately from other reports. Vita tax program    If you paid the back pay award in the same tax year to which it applies, report the wages on that year's Form W-2. Vita tax program No further action is necessary. Vita tax program Example. Vita tax program In 2012, Judy Wilson received a salary of $30,000 and a back pay under statute award of $2,000 for the period January through June 2012. Vita tax program Her employer properly reported wages of $32,000 for social security and Medicare on her 2012 Form W-2. Vita tax program No further action is necessary. Vita tax program Information the SSA needs to properly credit back pay under a statute (special report). Vita tax program   After you complete the special report, you or the employee should send it to the SSA when or after you submit the Form W-2 (on paper or electronically) to the SSA for the year you pay the statutory back pay to the employee. Vita tax program There is no statute of limitations on the filing of the special report to enable the SSA to allocate the wages. Vita tax program The special report must include the following information. Vita tax program The employer's name, address, and employer identification number (EIN). Vita tax program A signed statement citing the federal or state statute under which the payment was made. Vita tax program If the statute is not identified, the SSA will assume the payment was not under a statute and will not allocate to earlier period(s). Vita tax program The name and telephone number of a person to contact. Vita tax program The SSA may have additional questions concerning the back pay case or the individual employee's information. Vita tax program A list of employees receiving the payment and the following information for each employee: The tax year you paid and reported the back pay. Vita tax program The employee's social security number (SSN). Vita tax program The employee's name (as shown on his or her social security card). Vita tax program The amount of the back pay award excluding any amounts specifically designated otherwise, for example, damages for personal injury, interest, penalties, and legal fees. Vita tax program The period(s) the back pay award covers (beginning and ending dates—month and year). Vita tax program The other wages paid subject to social security and/or Medicare taxes and reported in the same year as the back pay award (if none, show zero)*. Vita tax program Do not include the back pay award shown in that wage report. Vita tax program If you originally submitted the report under an establishment number, show that number and the amount of money that is to remain under that establishment number. Vita tax program The amount to allocate to each reporting period*. Vita tax program This includes any amount you want allocated (if applicable) to the tax year of the award payment. Vita tax program If you do not give the SSA specific amounts to allocate, the SSA does the allocation by dividing the back pay award by the number of months or years covered by the award. Vita tax program *Note. Vita tax program   For periods before January 1, 1978 (before January 1, 1981, for state and local government employers covered by a Section 218 agreement), show the wage amounts for each calendar quarter ending March 31, June 30, September 30, and December 31. Vita tax program For all tax years, show and identify the social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) separately. Vita tax program MQGE is applicable to federal employees beginning in 1983, and for certain state and local government employees beginning in 1986. Vita tax program For tax years 1991 and later, list the social security and Medicare wages separately. Vita tax program If you originally reported the individual's wages under an establishment or payroll record unit number, show the amount of wages to remain in the award year for that number and furnish that number to the SSA along with the EIN. Vita tax program Back Pay Under a Statute Back pay awarded under a statute is a payment by an employer following an award, determination, or agreement approved or sanctioned by a court or government agency responsible for enforcing a federal or state statute that protects an employee's right to employment or wages. Vita tax program Examples of pertinent statutes include: Age Discrimination in Employment Act, Americans with Disabilities Act, Equal Pay Act, Fair Labor Standards Act, National Labor Relations Act, State minimum wage laws, and State statutes that protect rights to employment and wages. Vita tax program Payments based on laws that have a similar effect to those listed above also may qualify as payments made under a statute. Vita tax program Back pay awards, under some of the statutes listed above, may be compensation for personal injury and not pay for employment. Vita tax program Such awards are not wages for social security coverage purposes. Vita tax program If a court-approved or sanctioned settlement agreement states that the agreement is not an admission of discrimination, liability, or act of wrongdoing, the statement does not change the nature of a back pay award. Vita tax program The payments made in such a settlement may still be back pay and wages under the rules discussed here. Vita tax program Nonstatutory Back Pay A payment for back wages negotiated between an employer and employee without an award, determination, or agreement approved or sanctioned by a court or government agency, the payment is not made under a statute. Vita tax program Delayed wage payments and retroactive pay increases resulting from union negotiation or payments under local ordinances or regulations are back pay and are wages. Vita tax program However, they are not payments made under a statute. Vita tax program If you are uncertain whether the back pay award was under a qualified statute, you may need to contact your personnel department or legal counsel or the attorney who filed the suit. Vita tax program Format for Report to the SSA Use the format shown in Table 1, later, to send the SSA the information needed to properly credit back pay under a statute. Vita tax program In a cover letter, include: Name and address of the employer, Statute under which you paid the back pay, Name and telephone number of the employer contact, and Signature of the reporting official. Vita tax program Under certain circumstances, back pay may be a special wage payment and excluded from wages counted under the social security earnings test. Vita tax program If you pay back pay to an employee age 61 or older, report it to the SSA in accordance with this section. Vita tax program Read Special Wage Payments, later, for additional reporting instructions. Vita tax program Questions If you have questions concerning back pay under a statute, call the SSA at 1-800-772-6270. Vita tax program Exception. Vita tax program   If you are a state or local government employer who was covered by an agreement under Section 218 of the Social Security Act before January 1, 1987, and you paid a back pay award before January 1, 1987, which you did not report to the SSA, contact your state Social Security Administrator's office. Vita tax program Table 1. Vita tax program Format for Report (Under Covering Letter) to Request SSA to Allocate Back Pay Under Statute Wages Employer's EIN: xx-xxxxxxx Tax Year in Which Award Payment Was Paid: 2012 (1) SSN and Employee Name (2)1 Award Amount and Period(s) (3)2,3 Other Soc. Vita tax program Sec. Vita tax program /Med. Vita tax program Wages Paid In Award Year (4)3 Allocation     Soc. Vita tax program Sec. Vita tax program Med. Vita tax program /MQGE Year Soc. Vita tax program Sec. Vita tax program Med. Vita tax program /MQGE xxx-xx-xxxx HELEN T. Vita tax program SMITH $100,000 1/2009 - 12/2012 $40,000 $40,000 2009 2010 2011 2012 $20,000 25,000 27,000 28,000 $20,000 25,000 27,000 28,000 xxx-xx-xxxx SAM W. Vita tax program EVANS 30,000 7/89-12/91 -0- -0- 1989 1990 1991   6,000 12,000 12,000 xxx-xx-xxxx ROLAND S. Vita tax program ADAMS 15,000 7/80-12/81 -0- -0- 9/80 12/80 1981 3,500 3,500 8,000   1Exclude amounts specifically designated as damages, penalties, etc. Vita tax program  2Exclude the amount of back pay, if any, included in that amount. Vita tax program  3For periods before January 1, 1978 (and for state and local government (Section 218) employers before January 1, 1981), show the wage amounts by calendar quarters. Vita tax program The social security and/or Medicare Qualified Government Employment (MQGE) wages (where applicable) must be shown separately FOR ALL YEARS. Vita tax program (Wages subject ONLY to MQGE would be shown in the Medicare/MQGE column; no wages would be shown in the Soc. Vita tax program Sec. Vita tax program column. Vita tax program ) For tax years 1991 and later, the social security and Medicare wages must be listed separately. Vita tax program Explanation of examples. Vita tax program Helen T. Vita tax program Smith–The back pay award, excluding interest, was $100,000 for the periods 1/2009-12/2012. Vita tax program In 2012, this employee was also paid $40,000 in other wages. Vita tax program (Her Form W-2 for 2012 reported $110,100 for social security and $140,000 for Medicare. Vita tax program The SSA allocation will result in adjusted posted wages of $68,000 for social security and $68,000 for Medicare for 2012. Vita tax program ) Sam W. Vita tax program Evans–The back pay award was $30,000 for the periods 7/89-12/91. Vita tax program This employee was hired in 1989 and was subject to MQGE only. Vita tax program He was no longer employed by this governmental employer in 2012. Vita tax program (His Form W-2 for 2012 reported $30,000 for social security and $30,000 for Medicare. Vita tax program After the SSA allocation, he will not have any net posted wages for 2012. Vita tax program ) Roland S. Vita tax program Adams–The back pay award was $15,000 for the periods 7/80-12/81. Vita tax program He was no longer employed by this state and local government (Section 218) employer in 2012. Vita tax program (His Form W-2 for 2012 reported $15,000 for social security and $15,000 for Medicare; after the SSA allocation, he will not have any net posted wages for 2012. Vita tax program ) If the state Social Security Administrator's office needs more information, they can contact the SSA at the following address:   Social Security Administration Office of Income Security Programs Office of Earnings and Program Integrity Policy 6401 Security Boulevard 2506 OPS Baltimore, MD 21235 2. Vita tax program Special Wage Payments A special wage payment (SWP) is an amount paid by an employer to an employee (or former employee) for services performed in a prior year. Vita tax program Employers should report to the SSA special wage payments made to employees and former employees who are recipients of social security retirement benefits. Vita tax program Special wage payments made to a retired employee receiving social security or to an employee who continues to work while receiving social security benefits may reduce the benefits the individual receives if not reported to the SSA. Vita tax program Special wage payments may include (but are not limited to): Accumulated sick and vacation pay, Back pay, Bonuses, Deferred compensation, Payments because of retirement, Sales commissions, Severance pay, and Stock options. Vita tax program Note. Vita tax program Payments made after retirement that are part of the normal payroll cycle should not be routinely reported as special wage payments. Vita tax program Earnings Test. Vita tax program   Benefits paid to a social security beneficiary under full retirement age may be reduced if the beneficiary continues to work. Vita tax program The SSA uses the information in boxes 1, 3, and 5 of Form W-2 to determine the beneficiary's current year earnings. Vita tax program Special wage payments, which are for services performed in a prior year, will increase the current year earnings on Form W-2, which also may result in a reduction in the beneficiary's benefits. Vita tax program If a benefit is reduced because of a special wage payment, the beneficiary must get documentation from the employer before the SSA can restore the deducted portion. Vita tax program Therefore, employer reports of special wage payments help prevent incorrect benefit reductions. Vita tax program Reporting Special Wage Payments Employers must report special wage payments for income tax purposes and social security and Medicare taxes in the year received. Vita tax program Report income, social security, and/or Medicare taxes for special wage payments on Form W-2. Vita tax program See Nonqualified Deferred Compensation and Section 457 Plans, later, for reporting nonqualified deferred compensation plan deferrals and payments on Form W-2. Vita tax program In addition, report to the SSA special wage payments made during the reporting year to retired employees and employees who continue to work while receiving social security benefits. Vita tax program Submit reports after the close of the tax year. Vita tax program To avoid delays in processing, submit reports in time to reach the SSA by April 1. Vita tax program Use one of the following reporting methods. Vita tax program Electronic reporting. Vita tax program   Special wage payment files can be sent electronically by logging onto Business Services Online (BSO) via the socialsecurity. Vita tax program gov website. Vita tax program BSO enables organizations and authorized individuals to conduct business with and submit confidential information to the Social Security Administration. Vita tax program You must register to use this website. Vita tax program The web address is www. Vita tax program socialsecurity. Vita tax program gov/bso/bsowelcome. Vita tax program htm. Vita tax program   Use the specifications and record layout shown in  Table 2, later. Vita tax program Only one file at a time may be submitted. Vita tax program If your file is large (>10MB), or you have a slow internet connection, the transmission will be faster if the file is zipped. Vita tax program A zipped file contains a file that has been compressed to reduce its file size. Vita tax program WinZip and PKZIP are examples of acceptable compression packages. Vita tax program   Electronic submissions not meeting the specifications in Table 2 will be rejected. Vita tax program Paper listing. Vita tax program   A paper listing can be used to report special wage payments to several employees. Vita tax program Use the format shown in Table 3, later. Vita tax program Submit paper listings to the local SSA office nearest your place of business. Vita tax program Visit www. Vita tax program socialsecurity. Vita tax program gov/locator to find a Social Security office near you. Vita tax program Form SSA-131. Vita tax program   Use Form SSA-131 to report special wage payments made to an employee. Vita tax program Also use this form to report nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in box 11 of Form W-2. Vita tax program    This image is too large to be displayed in the current screen. Vita tax program Please click the link to view the image. Vita tax program Publication 957 Reporting Back Pay to the Social Security Administration Instructions for Form SSA–131   EMPLOYER INSTRUCTIONS FOR COMPLETING SPECIAL WAGE PAYMENT FORM 1. Vita tax program Provide the EIN that was used or will be used to report the employee's wages on the Form W-2. Vita tax program 2. Vita tax program Enter the date the employee retired. Vita tax program Enter “Not Retired” if the employee has not retired. Vita tax program 3. Vita tax program Enter the date that the employee last performed services; was not expected to return to work; and was not subject to recall to render additional services. Vita tax program This date should be the same as or earlier than the date in item “2”. Vita tax program Enter “Not Retired” if the employee has not retired. Vita tax program 4. Vita tax program Enter the wages that were paid to the employee in the tax year that were for services that were performed in years prior to the tax year or that were paid on account of retirement. Vita tax program  Examples (not all inclusive) of payments to be included: Payments in lieu of vacation that were earned in a year prior to the tax year. Vita tax program Accumulated sick payments which were paid in a lump sum based on “retirement” as the sole condition of payment. Vita tax program Accumulated sick payments paid at or after the date in item 3, which were earned in a year prior to the tax year. Vita tax program Payments “on account of retirement”–dismissal, severance or termination pay paid because of retirement. Vita tax program Bonuses which are paid pursuant to a prior contract, agreement or promise causing the employee to expect such payments regularly; or announced to induce the employee to work more steadily, rapidly or efficiently or to remain with the employer. Vita tax program Stock Options. Vita tax program   Do not include in item “4” payments: For annual, sick, holiday, or vacation pay if used (absence from work) prior to the date of retirement (earlier of items “2” or “3”). Vita tax program That were reported or will be reported under “Nonqualified Plans” on the Form W-2. Vita tax program That were deducted from the employee's wages and paid to a deferred compensation plan (e. Vita tax program g. Vita tax program , 401k). Vita tax program Employees health and dental plan benefits (non-covered/non-taxable for Social Security Wages). Vita tax program Bonuses earned and paid in the tax year. Vita tax program 5. Vita tax program Check whether payments listed in item 4 will be made for years after the tax year. Vita tax program If yes, please show the amounts and years in which these will be paid, if known. Vita tax program 6. Vita tax program Nonqualified deferred compensation and section 457 plans only. Vita tax program If you were unable to report nonqualified deferred compensation or section 457 plan payments and deferrals (contributions) on Form W-2 because both payments and deferrals occurred during the year, show the amount of wages earned by the employee during the tax year. Vita tax program Generally, the wages earned will be the compensation reported in block 1 of Form W-2 less payments from a nonqualified deferred compensation (or 457) plan, but including any amounts deferred under the plan during the tax year (See IRS Publication 957). Vita tax program Paperwork/Privacy Act Notice: This report is authorized by regulation 20 CFR 404. Vita tax program 702. Vita tax program The information that you provide will be used in making a determination regarding the amount of Social Security benefits payable to the above named individual. Vita tax program While your response is voluntary, if you do not respond we may not be able to make a correct determination regarding the amount of Social Security benefits payable to the above named individual for the year in question. Vita tax program We may also use the information you give us when we match records by computer. Vita tax program Matching programs compare our records with those of other Federal, State, or local government agencies. Vita tax program Many agencies may use matching programs to find or prove that a person qualifies for benefits paid by the Federal Government. Vita tax program The law allows us to do this even if you do not agree to it. Vita tax program Explanations about these and other reasons why information you provide us may be used or given out are available in Social Security Offices. Vita tax program If you want to learn more about this, contact any Social Security Office. Vita tax program The Paperwork Reduction Act: This information collection meets the clearance requirements of 44 U. Vita tax program S. Vita tax program C. Vita tax program §3507, as amended by Section 2 of the Paperwork Reduction Act of 1995. Vita tax program You are not required to answer these questions unless we display a valid Office of Management and Budget control number. Vita tax program We estimate that it will take you about 20 minutes to read the instructions, gather the necessary facts, and answer the questions. Vita tax program Form SSA-131 (8-2001) EF (06-2002)   Submit Form SSA-131 to the SSA office nearest your place of business. Vita tax program Or, the employee can submit it to the SSA office handling the claim. Vita tax program You or the employee must submit this form before the SSA can exclude the special wage payments for purposes of the earnings test. Vita tax program If reporting on more than one employee, complete a separate Form SSA-131 for each employee or use the paper listing format (except for reporting nonqualified and section 457 plan deferrals and payments) in Table 3. Vita tax program Do not report payments from nonqualified deferred compensation or section 457 plans that were reported in box 11 of Form W-2. Vita tax program Use Form SSA-131 if deferrals to and payments from nonqualified or section 457 plans occurred during the tax year. Vita tax program Reporting Nonstatutory (Nonqualified) Stock Options as Special Wage Payments A nonstatutory (nonqualified) option to purchase stock which is exercised in a year after the year in which the option was earned is a special wage payment. Vita tax program It should not count for the social security earnings test. Vita tax program Nonstatutory (nonqualified) options exercised as special wage payments by retired employees or employees who continue to work while receiving social security benefits should be reported by employers using the above reporting methods. Vita tax program Nonqualified Deferred Compensation and Section 457 Plans A nonqualified deferred compensation plan is a plan or arrangement established and maintained by an employer for one or more of its employees that provides for the deferral of compensation, but does not meet the requirements for a tax-qualified deferred compensation plan. Vita tax program For social security and Medicare purposes, deferred compensation plans for employees of state and local governments (section 457 plans) are treated the same as nonqualified plans. Vita tax program Nonqualified and section 457 plans are reported differently than other special wage payments. Vita tax program See Reporting Amounts Deferred to Nonqualified and Section 457 Plans below for specific instructions. Vita tax program Reporting Amounts Deferred to Nonqualified and Section 457 Plans Generally, when the related services are performed, nonqualified deferred compensation is subject to social security and Medicare tax when deferred. Vita tax program However, if nonqualified and section 457 plans contain provisions that delay the employee's right to receive payments from the plan, a period of substantial risk of forfeiture exists. Vita tax program The plans' deferrals, or contributions, are not subject to social security and Medicare taxes until the period of substantial risk of forfeiture ends. Vita tax program No risk of forfeiture. Vita tax program   If there is no risk of forfeiture, report wage amounts deferred to a nonqualified deferred compensation or section 457 plan in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. Vita tax program Example. Vita tax program Company X's nonqualified deferred compensation plan allows the deferral of up to $20,000 of employee salaries each year. Vita tax program The plan has no risk of forfeiture. Vita tax program In 2012, Employee A defers $20,000 to the plan from a total salary of $200,000. Vita tax program Form W-2 Completion Amount Box 1 $200,000 Box 3* 110,100 Box 5 200,000 *Wage base maximum for tax year 2012 Risk of forfeiture lapses before retirement. Vita tax program   If the substantial risk of forfeiture lapses before the employee retires, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. Vita tax program The accumulated deferrals are reported along with any other social security and Medicare wages earned during the year. Vita tax program   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. Vita tax program If the employee continues working, future deferrals are social security and Medicare wages when they are earned. Vita tax program    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. Vita tax program Risk of forfeiture lapses at retirement. Vita tax program   When an employee's right to a payment is contingent upon working until retirement, report all past contributions to the plan (or the value of the plan), including accumulated earned interest, as social security and/or Medicare wages in the year of retirement. Vita tax program Add the amount to other wages paid in that year, and enter in box 3 (up to the wage base maximum) and/or box 5 of Form W-2. Vita tax program   Report in box 11 of Form W-2 the amount of deferrals, including any accumulated interest, that became taxable for social security and Medicare taxes during the year (but were for prior year services) because the deferred amounts were no longer subject to a substantial risk of forfeiture. Vita tax program    Do not include in box 11 deferrals that are included in boxes 3 and/or 5 and that are for current year services. Vita tax program Example—risk of forfeiture. Vita tax program At the end of the risk-of-forfeiture period for Company Y's nonqualified deferred compensation plan, Employee B's accumulated deferrals, plus interest earned by the plan, are $120,000, not including B's $20,000 deferral for this year. Vita tax program B's wages, including this year's deferred amount, are $80,000. Vita tax program Form W-2 Completion Amount Box 1 $60,000 Box 3* 110,100 Box 5 200,000 Box 11 120,000 *Wage base maximum for tax year 2012 Reporting Payments From Nonqualified and Nongovernmental Section 457 Plans When an employee or former employee retires and begins receiving payments (distributions) from a nonqualified or nongovernmental section 457 plan, report the payments in boxes 1 and 11 of Form W-2. Vita tax program Report payments (distributions) from a governmental section 457 plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Vita tax program Example. Vita tax program Employee D retired from the XYZ company and began receiving social security benefits. Vita tax program XYZ paid D a $12,000 bonus upon retirement for sales made in a prior year, and D received $25,000 in payments from XYZ's nonqualified deferred compensation plan. Vita tax program In addition, D agreed to continue performing services for XYZ, but on a part-time basis for wages of $15,000 per year. Vita tax program D made no deferrals to the nonqualified plan this year. Vita tax program Form W-2 Completion Amount Box 1 $52,000 Box 3 27,000 Box 5 27,000 Box 11 25,000 Report the $12,000 bonus to the SSA using electronic reporting, a paper listing, or Form SSA-131. Vita tax program For more information, see Reporting Special Wage Payments , earlier. Vita tax program Reporting Payments and Deferrals in the Same Year Do not complete box 11 when payments (distributions) are made from a nonqualified plan and deferrals are reported in boxes 3 and/or 5 of Form W-2 (including current year deferrals). Vita tax program Report to the SSA on Form SSA-131 the total amount the employee earned during the tax year. Vita tax program Normally, the amount earned is the amount reported in box 1 of Form W-2 less payments from a nonqualified or section 457 plan, but including any amounts deferred under the plan during the tax year. Vita tax program See Form SSA-131 and its instructions, earlier. Vita tax program Example. Vita tax program Employee K retired this year from Company XYZ and began receiving social security benefits. Vita tax program During the year he earned wages of $50,000 and deferred $35,000 of the wages into the company's nonqualified deferred compensation plan. Vita tax program K also received $75,000 in payments from the company's nonqualified plan. Vita tax program Form W-2 Completion Amount Special Wage Payment $75,000 Wages 50,000 Minus: deferral 35,000 Total reported in Box 1 $90,000     Wages including deferral reported in  Boxes 3 and 5 $50,000     Leave Box 11 blank. Vita tax program File Form SSA-131 -0-     Form SSA-131 Completion Amount from Box 1 of Form W-2 $90,000 Minus: payments from a nonqualified plan 75,000 Plus: amounts deferred into the plan during the year 35,000 Total wages earned for purposes of Form SSA-131 (item 6) $50,000 Additional Reporting Examples for Nonqualified Deferred Compensation (NQDC) Plans It is not necessary to show amounts deferred during the year under an NQDC plan subject to section 409A. Vita tax program If you report section 409A deferrals, show the amount in box 12 of Form W-2 using code Y. Vita tax program For more information, see Notice 2008-115, 2008-52 I. Vita tax program R. Vita tax program B. Vita tax program 1367, available at www. Vita tax program irs. Vita tax program gov/irb/2008-52_IRB/ar10. Vita tax program html. Vita tax program Special reporting rules apply when an NQDC plan is not compliant with section 409A (when there has been a “plan failure”). Vita tax program Income included under section 409A from an NQDC plan is reported in box 1 and box 12 of Form W-2 using code Z. Vita tax program See Notice 2008-115. Vita tax program The following examples use small dollar amounts for illustrative purposes. Vita tax program However, the amount reported in box 3 of Form W-2 is always limited by the social security earnings wage base (for example, $110,100 for 2012). Vita tax program The term “vested” in the following examples means that the amount deferred is not subject to a substantial risk of forfeiture. Vita tax program Conversely, the term “not vested” means that the amount deferred is subject to a substantial risk of forfeiture. Vita tax program The examples assume that the NQDC plan is in compliance with section 409A, and that amounts deferred under the plan are not includible in gross income as they are deferred. Vita tax program For purposes of the examples, it is assumed that the regular pay of the employee is remuneration for employment and wages for employment tax purposes except to the extent the deferral of a portion of the regular pay results in a reduction in wages. Vita tax program Example 1: Deferral that is immediately vested (no substantial risk of forfeiture) with no distributions and no vesting of prior-year deferrals. Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into her employer’s NQDC plan. Vita tax program The deferral of $20 was vested upon deferral and there was an employer match of $10 under the plan, which was also vested. Vita tax program Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10. Vita tax program Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 vested deferral) $180 Box 3 ($200 Regular pay plus $10 Employer match, vested) 210 Box 5 ($200 Regular pay plus $10 Employer match, vested) 210 Box 11 -0- Example 2: Deferral with delayed vesting (substantial risk of forfeiture) of employee and employer portions (no distributions and no vesting of prior-year deferrals). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. Vita tax program The deferral of $20 was not vested upon deferral, and there was an employer match of $10 under the plan, which was also not vested. Vita tax program Regular pay = $200; Deferral, not vested = $20; Employer match, not vested = $10. Vita tax program Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, not vested) $180 Box 3 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 5 ($200 Regular pay minus $20 Deferral, not vested) 180 Box 11 -0- Example 3: Deferral that is immediately vested with prior-year deferrals and investment earnings on the prior-year deferrals that are now vesting (no distributions). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s nonqualified deferred compensation plan. Vita tax program The deferral of $20 was vested upon deferral. Vita tax program During the year, $100 of prior-year deferrals and $15 of investment earnings on the $100 of prior-year deferrals became vested. Vita tax program Regular pay = $200; Deferral, vested = $20; Vesting of prior-year deferrals = $100; Vesting of investment earnings on $100 of prior-year deferral = $15. Vita tax program Form W-2 Completion Amount Box 1 ($200 Regular pay minus $20 Deferral, vested) $180 Box 3 ($200 Regular pay plus $100 vested prior-year deferral plus $15 earnings on deferral) 315 Box 5 ($200 Regular pay plus $100 vested prior-year deferral plus $15 vested investment earnings on prior year deferral) 315 Box 11 ($100 vested prior-year deferral plus $15 earnings) 115 Example 4: No deferrals but there are distributions (no vesting of prior-year deferrals). Vita tax program For the year, the employee’s regular pay was $100, and the employee deferred no pay into the employer’s NQDC plan. Vita tax program There was no vesting of prior-year deferrals under the plan. Vita tax program During the year, there were total distributions of $50 from the plan to the employee. Vita tax program Regular pay = $100; Distribution = $50. Vita tax program Form W-2 Completion Amount Box 1 ($100 Regular pay plus $50 Distribution) $150 Box 3 ($100 Regular pay ) 100 Box 5 ($100 Regular pay) 100 Box 11 ($50 Distribution) 50 Special rule for box 11 of Form W-2 (distributions and deferral in the same year). Vita tax program   If, in the same year, there are NQDC distributions and there are deferrals that are reportable in boxes 3 and/or 5 (current or prior-year deferrals) of Form W-2, do not complete box 11. Vita tax program Instead, report on Form SSA-131 the total amount the employee earned during the year. Vita tax program * Submit the SSA-131 to the nearest SSA office or give it to the employee. Vita tax program   *Generally, the amount earned by the employee during the tax year for purposes of item 6 of Form SSA-131 is the amount reported in box 1 of Form W-2 plus current-year deferrals that are vested (employee and employer portions) less distributions. Vita tax program Do not consider prior-year deferrals that are vesting in the current year. Vita tax program If there was a plan failure, the box 1 amount in this calculation should be as if there were no plan failure. Vita tax program Example 5: Deferral that is immediately vested and there are distributions (no vesting of prior-year deferrals). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Vita tax program There was also an employer match of $10. Vita tax program The deferral and employer match were vested upon deferral. Vita tax program There was no vesting of prior-year deferrals under the plan. Vita tax program During the year, there were total distributions of $50 from the plan to the employee. Vita tax program Regular pay = $200; Deferral, vested = $20; Employer match, vested = $10; Distribution = $50. Vita tax program Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, vested) $230 Boxes 3 and 5 ($200 Regular pay plus $10 vested employer match) 210 Leave Box 11 blank. Vita tax program File Form SSA-131 -0-     Form SSA-131 Completion Item 6 - amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $30 vested current year employee deferral and employer match) $210 Example 6: Deferral with delayed vesting and there are distributions (no vesting of prior-year deferrals). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Vita tax program The deferral was not vested upon deferral. Vita tax program There was no vesting of prior-year deferrals under the plan. Vita tax program During the year, there were total distributions of $50 from the plan to the employee. Vita tax program Regular pay = $200; Deferral, not vested = $20; Distribution = $50. Vita tax program Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay minus $20 deferral that is not vested) 180 Box 11 ($50 Distribution). Vita tax program 50 Example 7: Deferral that is immediately vested and there are distributions (also vesting of prior-year deferrals and earnings on those prior-year deferrals). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Vita tax program The deferral was vested upon deferral. Vita tax program There was vesting of $100 of prior-year deferrals and $15 of earnings on the $100 prior-year deferral under the plan. Vita tax program During the year, there were total distributions of $50 from the plan to the employee. Vita tax program Regular pay = $200; Deferral, vested = $20; Distribution = $50; Vesting of prior-year deferrals ($100) and earnings on those prior-year deferrals ($15) = $115. Vita tax program Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 Regular pay minus $20 vested deferral $230 Boxes 3 and 5 ($200 Regular pay Plus $115 vested prior deferral (with vested earnings on the deferral)) 315 Leave Box 11 blank. Vita tax program File Form SSA-131 -0-     Form SSA-131 Completion Item 6, amount of wages earned by the employee during the tax year ($230 from Box 1 of Form W-2 minus $50 Distribution plus $20 vested current year deferral) $200 Example 8: Deferral with delayed vesting and there are distributions (vesting of prior-year deferrals, including employer matches, and earnings on those deferrals). Vita tax program For the year, the employee’s regular pay was $200, and the employee deferred $20 of the pay into the employer’s NQDC plan. Vita tax program The deferral was not vested upon deferral. Vita tax program There was also vesting of prior-year deferrals and employer matches and earnings on these amounts under the plan ($115). Vita tax program During the year, there were total distributions of $50 from the plan to the employee. Vita tax program Regular pay = $200; Deferral, not vested = $20; Distribution = $50; Vesting of prior-year deferrals and employer match = $100 plus earnings on that $100 of $15. Vita tax program Form W-2 Completion Amount Box 1 ($50 Special Wage Payment (Distribution) plus $200 regular pay minus $20 Deferral, not vested) $230 Boxes 3 and 5 ($200 Regular pay plus $115 vested prior-year deferral and prior year employer match and earning on the prior year amounts minus $20 deferral that is not vested) 295 Leave Box 11 blank. Vita tax program File Form SSA-131 -0-     Form SSA-131 Completion Item 6 ($230 Amount from Box 1 of Form W-2 minus $50 Distribution) $180 Table 2. Vita tax program Specifications for Electronic Reporting of Special Wage Payments Record Position  Field Size   Description Start End 1 3 3 Record Type—must include only the capital letters “SWP” 4 12 9 SSN—must be numeric and may not be all zeros 13 27 15 Last Name—all capitals and no punctuation; may have blanks on right only 28 38 11 First Name—all capitals and no punctuation; may have blanks on right only 39 39 1 Middle Initial—must be either a capital letter or blank 40 48 9 EIN—must be numeric and may not be all zeros 49 59 11 Payment—must be numeric; may not be all zeros; last two digits on right are assumed to be cents; no period or dollar sign 60 63 4 Payment Year—must be only a four-digit year 64 66 3 SSA Office Code—must be numeric and may be all zeros 67 67 1 Payment Type Code—must be the capital letter “T” 68 117 50 Filler  The record format is a fixed length of 117. Vita tax program  The file format is ASCII. Vita tax program  Submit only one file at a time. Vita tax program   Table 3. Vita tax program Sample—Paper Listing for Reporting Special Wage Payments to Several Employees Report of Special Wage PaymentsTax Year: Page of A. Vita tax program Employer Name: EIN:   Address: Contact Name:     Phone: ( )   . Vita tax program 1) B. Vita tax program Employee Name: (Last) (First) (MI)   C. Vita tax program SSN: D. Vita tax program SWP:$ E. Vita tax program Type: Other: 2) B. Vita tax program Employee Name: (Last) (First) (MI)   C. Vita tax program SSN: D. Vita tax program SWP:$ E. Vita tax program Type: Other: 3) B. Vita tax program Employee Name: (Last) (First) (MI)   C. Vita tax program SSN: D. Vita tax program SWP:$ E. Vita tax program Type: Other: 4) B. Vita tax program Employee Name: (Last) (First) (MI)   C. Vita tax program SSN: D. Vita tax program SWP:$ E. Vita tax program Type: Other: 5) B. Vita tax program Employee Name: (Last) (First) (MI)   C. Vita tax program SSN: D. Vita tax program SWP:$ E. Vita tax program Type: Other:     INSTRUCTIONS:   Enter tax year and page number. Vita tax program   A. Vita tax program Employer name, employer identification number (EIN), address, the name of a contact person, and a phone number where the contact person can be reached during normal business hours. Vita tax program   B. Vita tax program Employee's name. Vita tax program   C. Vita tax program Employee's social security number (SSN). Vita tax program   D. Vita tax program Total amount of special wage payments made to the employee. Vita tax program   E. Vita tax program Type of special wage payment from the following list: (1) Vacation Pay, (2) Sick Pay, (3) Severance Pay,  (4) Bonus, (5) Deferred Compensation, (6) Stock Options, and (7) Other—Please explain. Vita tax program   Do not use a paper listing for nonqualified deferred compensation and section 457 plan deferrals and payments that could not be reported in block 11 of Form W-2. Vita tax program (Get Form SSA-131. 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Can I Claim My Expenses as Miscellaneous Itemized Deductions on Schedule A (Form 1040)?

You may be able to deduct certain expenses related to producing or collecting taxable income. This topic addresses many of these expenses. It does not address employment related expenses other than expenses for job search, work clothes, uniforms and union dues.

For more information regarding employment related expenses, refer to Publication 529, Miscellaneous Deductions.

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The Vita Tax Program

Vita tax program Publication 947 - Main Content Table of Contents Practice Before the IRSWhat Is Practice Before the IRS? Who Can Practice Before the IRS? Who Cannot Practice Before the IRS? How Does an Individual Become Enrolled? What Are the Rules of Practice? Authorizing a RepresentativeWhat Is a Power of Attorney? When Is a Power of Attorney Required? When Is a Power of Attorney Not Required? How Do I Fill Out Form 2848? What Happens to the Power of Attorney When Filed? How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Vita tax program Practice Before the IRS The Office of Professional Responsibility and the Return Preparer Office generally are responsible for administering and enforcing the regulations governing practice before the IRS. Vita tax program The Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. Vita tax program The Return Preparer Office is responsible for matters related to the authority to practice, including acting on applications for enrollment and administering competency testing and continuing education. Vita tax program What Is Practice Before the IRS? Practice before the IRS covers all matters relating to any of the following. Vita tax program Communicating with the IRS for a taxpayer regarding the taxpayer's rights, privileges, or liabilities under laws and regulations administered by the IRS. Vita tax program Representing a taxpayer at conferences, hearings, or meetings with the IRS. Vita tax program Preparing and filing documents, including tax returns, with the IRS for a taxpayer. Vita tax program Providing a client with written advice which has a potential for tax avoidance or evasion. Vita tax program Furnishing information at the request of the IRS or appearing as a witness for the taxpayer is not practice before the IRS. Vita tax program Who Can Practice Before the IRS? The following individuals can practice before the IRS. Vita tax program However, any individual who is recognized to practice (a recognized representative) must be designated as the taxpayer's representative and file a written declaration with the IRS stating that he or she is authorized and qualified to represent a particular taxpayer. Vita tax program Form 2848 can be used for this purpose. Vita tax program Attorneys. Vita tax program   Any attorney who is not currently under suspension or disbarment from practice before the IRS and who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia may practice before the IRS. Vita tax program Certified public accountants (CPAs). Vita tax program   Any CPA who is not currently under suspension or disbarment from practice before the IRS and who is duly qualified to practice as a CPA in any state, possession, territory, commonwealth, or the District of Columbia may practice before the IRS. Vita tax program Enrolled agents. Vita tax program   Any enrolled agent in active status who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. Vita tax program Enrolled retirement plan agents. Vita tax program   Any enrolled retirement plan agent in active status who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. Vita tax program The practice of enrolled retirement plan agents is limited to certain Internal Revenue Code sections that relate to their area of expertise, principally those sections governing employee retirement plans. Vita tax program Enrolled actuaries. Vita tax program   Any individual who is enrolled as an actuary by the Joint Board for the Enrollment of Actuaries who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. Vita tax program The practice of enrolled actuaries is limited to certain Internal Revenue Code sections that relate to their area of expertise, principally those sections governing employee retirement plans. Vita tax program Student. Vita tax program    Under certain circumstances, a student who is supervised by a practitioner may request permission to represent another person before the IRS. Vita tax program For more information, see Authorization for special appearances, later. Vita tax program Registered tax return preparers and unenrolled return preparers. Vita tax program   A registered tax return preparer is an individual who has passed an IRS competency test and is authorized to prepare and sign tax returns as the preparer. Vita tax program An unenrolled return preparer is an individual other than an attorney, CPA, enrolled agent, enrolled retirement plan agent, or enrolled actuary who prepares and signs a taxpayer's return as the preparer, or who prepares a return but is not required (by the instructions to the return or regulations) to sign the return. Vita tax program   Registered tax return preparers and unenrolled return preparers may only represent taxpayers before revenue agents, customer service representatives, or similar officers and employees of the Internal Revenue Service (including the Taxpayer Advocate Service) during an examination of the taxable year or period covered by the tax return they prepared and signed. Vita tax program Registered tax return preparers and unenrolled return preparers cannot represent taxpayers, regardless of the circumstances requiring representation, before appeals officers, revenue officers, counsel or similar officers or employees of the Internal Revenue Service or the Department of Treasury. Vita tax program Registered tax return preparers and unenrolled return preparers cannot execute closing agreements, extend the statutory period for tax assessments or collection of tax, execute waivers, execute claims for refund, or sign any document on behalf of a taxpayer. Vita tax program   If the unenrolled return preparer does not meet the requirements for limited representation, you may file Form 8821 to allow the preparer to inspect your tax information and receive copies of notices sent to you by the IRS. Vita tax program See Form 8821. Vita tax program Practice denied. Vita tax program   Any individual engaged in limited practice before the IRS who is involved in disreputable conduct is subject to disciplinary action. Vita tax program Disreputable conduct includes, but is not limited to, the list of items under Incompetence and Disreputable Conduct shown later under What Are the Rules of Practice. Vita tax program Other individuals who may serve as representatives. Vita tax program   Because of their special relationship with a taxpayer, the following individuals can represent the specified taxpayers before the IRS, provided they present satisfactory identification and, except in the case of an individual described in (1) below, proof of authority to represent the taxpayer. Vita tax program An individual. Vita tax program An individual can represent himself or herself before the IRS and does not have to file a written declaration of qualification and authority. Vita tax program A family member. Vita tax program An individual can represent members of his or her immediate family. Vita tax program Immediate family includes a spouse, child, parent, brother, or sister of the individual. Vita tax program An officer. Vita tax program A bona fide officer of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group can represent the corporation, association, or organized group. Vita tax program An officer of a governmental unit, agency, or authority, in the course of his or her official duties, can represent the organization before the IRS. Vita tax program A partner. Vita tax program A general partner may represent the partnership before the IRS. Vita tax program An employee. Vita tax program A regular full-time employee can represent his or her employer. Vita tax program An employer can be, but is not limited to, an individual, partnership, corporation (including a parent, subsidiary, or other affiliated corporation), association, trust, receivership, guardianship, estate, organized group, governmental unit, agency, or authority. Vita tax program A fiduciary. Vita tax program A fiduciary (trustee, executor, personal representative, administrator, receiver, or guardian) stands in the position of a taxpayer and acts as the taxpayer, not as a representative. Vita tax program See Fiduciary under When Is a Power of Attorney Not Required, later. Vita tax program Representation Outside the United States Any individual may represent an individual or entity, who is outside the United States, before personnel of the IRS when such representation occurs outside the United States. Vita tax program See section 10. Vita tax program 7(c)(1)(vii) of Circular 230. Vita tax program Authorization for Special Appearances The Commissioner of Internal Revenue, or delegate, can authorize an individual who is not otherwise eligible to practice before the IRS to represent another person for a particular matter. Vita tax program The prospective representative must request this authorization in writing from the Office of Professional Responsibility. Vita tax program However, it is granted only when extremely compelling circumstances exist. Vita tax program If granted, the Commissioner, or delegate, will issue a letter that details the conditions related to the appearance and the particular tax matter for which the authorization is granted. Vita tax program The authorization letter should not be confused with a letter from an IRS center advising an individual that he or she has been assigned a Centralized Authorization File (CAF) number. Vita tax program The issuance of a CAF number does not indicate that an individual is either recognized or authorized to practice before the IRS. Vita tax program It merely confirms that a centralized file for authorizations has been established for the individual under that number. Vita tax program Students in LITCs and the STCP. Vita tax program   A student who works in a Low Income Taxpayer Clinic (LITC) or Student Tax Clinic Program (STCP) who is supervised by a practitioner may request permission to represent another person before the IRS. Vita tax program Authorization requests must be made to the Office of Professional Responsibility. Vita tax program If granted, a letter authorizing the student's special appearance and detailing any conditions related to the appearance will be issued. Vita tax program Students receiving an authorization letter generally can represent taxpayers before any IRS function or office subject to any conditions in the authorization letter. Vita tax program If you intend to have a student represent you, review the authorization letter and ask your student, your student's supervisor, or the Office of Professional Responsibility if you have questions about the terms of the authorization. Vita tax program Who Cannot Practice Before the IRS? In general, individuals who are not eligible or who have lost the privilege as a result of certain actions cannot practice before the IRS. Vita tax program If an individual loses eligibility to practice, the IRS will not recognize a power of attorney that names the individual as a representative. Vita tax program Corporations, associations, partnerships, and other persons that are not individuals. Vita tax program   These organizations (or persons) are not eligible to practice before the IRS. Vita tax program Loss of Eligibility Generally, individuals lose their eligibility to practice before the IRS in the following ways. Vita tax program Not meeting the requirements for renewal of enrollment (such as continuing professional education). Vita tax program Requesting to be placed in inactive retirement status. Vita tax program Being suspended or disbarred by the Office of Professional Responsibility for violating the regulations governing practice before the IRS. Vita tax program Failure to meet requirements. Vita tax program   Individuals who fail to comply with the requirements for eligibility for renewal of enrollment will be notified by the IRS. Vita tax program The notice will explain the reason for noncompliance and provide the individual with an opportunity to furnish information for reconsideration. Vita tax program The individual has 60 days from the date of the notice to respond. Vita tax program Inactive roster. Vita tax program   An individual will be placed on the roster of inactive individuals for a period of three years, if he or she: Fails to respond timely to the notice of noncompliance with the renewal requirements, Fails to file timely the application for renewal, or Does not satisfy the requirements of eligibility for renewal. Vita tax program The individual must file an application for renewal and satisfy all requirements for renewal after being placed in inactive status. Vita tax program Otherwise, at the conclusion of the next renewal cycle, he or she will be removed from the roster and the enrollment or registration terminated. Vita tax program Inactive retirement status. Vita tax program   Individuals who request to be placed in an inactive retirement status will be ineligible to practice before the IRS. Vita tax program They must continue to adhere to all renewal requirements. Vita tax program They can be reinstated to an active enrollment status by filing an application for renewal and providing evidence that they have completed the required continuing professional education hours for the enrollment cycle or registration year. Vita tax program Suspension and disbarment. Vita tax program   Individuals authorized to practice before the IRS are subject to disciplinary proceedings and may be suspended or disbarred for violating any regulation governing practice before the IRS. Vita tax program This includes engaging in acts of disreputable conduct. Vita tax program For more information, see Incompetence and Disreputable Conduct under What are the Rules of Practice, later. Vita tax program   Practitioners who are suspended in a disciplinary proceeding are not allowed to practice before the IRS during the period of suspension. Vita tax program See What Is Practice Before the IRS, earlier. Vita tax program   Practitioners who are disbarred in a disciplinary proceeding are not allowed to practice before the IRS. Vita tax program However, a practitioner can seek reinstatement from the Office of Professional Responsibility five years after disbarment. Vita tax program   If the practitioner seeks reinstatement, he or she may not practice before the IRS until the Office of Professional Responsibility authorizes reinstatement. Vita tax program The Office of Professional Responsibility may reinstate the practitioner if it is determined that: The practitioner's future conduct is not likely to be in violation of the regulations, and Granting the reinstatement would not be contrary to the public interest. Vita tax program How Does an Individual Become Enrolled? The Return Preparer Office can grant enrollment to practice before the IRS to an applicant who demonstrates special competence in tax matters by passing a written examination administered by the IRS. Vita tax program Enrollment also can be granted to an applicant who qualifies because of past service and technical experience in the IRS. Vita tax program In either case, certain application forms, discussed next, must be filed. Vita tax program Additionally, an applicant must not have engaged in any conduct that would justify suspension or disbarment from practice before the IRS. Vita tax program See Incompetence and Disreputable Conduct, later. Vita tax program Form 2587. Vita tax program   Applicants can apply to take the special enrollment examination by filing Form 2587, Application for Special Enrollment Examination. Vita tax program Form 2587 can be filed online, by mail, or by fax. Vita tax program For more information, see instructions and fees listed on the form. Vita tax program To get Form 2587, see How To Get Tax Help, later. Vita tax program Form 23 and Form 23-EP. Vita tax program   Individuals who have passed the examination or are applying on the basis of past service and technical experience with the IRS can apply for enrollment by filing Form 23, Application for Enrollment to Practice Before the Internal Revenue Service, or Form 23-EP, Application for Enrollment to Practice Before the Internal Revenue Service as an Enrolled Retirement Plan Agent. Vita tax program The application must include a check or money order in the amount of the fee shown on Form 23 or Form 23-EP. Vita tax program Alternatively, payment may be made electronically pursuant to instructions on the forms. Vita tax program To get Form 23 or Form 23-EP, see How To Get Tax Help, later. Vita tax program Form 5434. Vita tax program   An individual may apply as an enrolled actuary on the basis of past employment with the IRS and technical experience by filing Form 5434, Application for Enrollment, with the Joint Board for the Enrollment of Actuaries. Vita tax program The application must include a check or money order in the amount of the fee shown on Form 5434. Vita tax program To get Form 5434, see How To Get Tax Help, later. Vita tax program Period of enrollment. Vita tax program   An enrollment card will be issued to each individual whose enrollment application is approved. Vita tax program The individual is enrolled until the expiration date shown on the enrollment card or certificate. Vita tax program To continue practicing beyond the expiration date, the individual must request renewal of the enrollment by filing Form 8554, Application for Renewal of Enrollment to Practice Before the Internal Revenue Service, or Form 8554-EP, Application for Renewal of Enrollment to Practice Before the Internal Revenue Service as an Enrolled Retirement Plan Agent (ERPA). Vita tax program What Are the Rules of Practice? The rules governing practice before the IRS are published in the Code of Federal Regulations at 31 C. Vita tax program F. Vita tax program R. Vita tax program part 10 and reprinted in Treasury Department Circular No. Vita tax program 230 (Circular 230). Vita tax program An attorney, CPA, enrolled agent, enrolled retirement plan agent, registered tax return preparer, or enrolled actuary authorized to practice before the IRS (referred to hereafter as a practitioner) has the duty to perform certain acts and is restricted from performing other acts. Vita tax program In addition, a practitioner cannot engage in disreputable conduct (discussed later). Vita tax program Any practitioner who does not comply with the rules of practice or engages in disreputable conduct is subject to disciplinary action. Vita tax program Also, unenrolled preparers must comply with the rules of practice and conduct to exercise the privilege of limited practice before the IRS. Vita tax program See Publication 470 for a discussion of the special rules for limited practice by unenrolled preparers. Vita tax program Duties Practitioners must promptly submit records or information requested by officers or employees of the IRS, except when the practitioner believes on reasonable belief and good faith that the information is privileged. Vita tax program Communications with respect to tax advice between a federally authorized tax practitioner and a taxpayer generally are confidential to the same extent that communication would be privileged if it were between a taxpayer and an attorney if the advice relates to: Noncriminal tax matters before the IRS, or Noncriminal tax proceedings brought in federal court by or against the United States. Vita tax program Communications regarding corporate tax shelters. Vita tax program   This protection of tax advice communications does not apply to any written communications between a federally authorized tax practitioner and any person, including a director, shareholder, officer, employee, agent, or representative of a corporation if the communication involves the promotion of the direct or indirect participation of the corporation in any tax shelter. Vita tax program Duty to advise. Vita tax program   A practitioner who knows that his or her client has not complied with the revenue laws or has made an error or omission in any return, document, affidavit, or other required paper, has the responsibility to advise the client promptly of the noncompliance, error, or omission, and the consequences of the noncompliance, error, or omission. Vita tax program Due diligence. Vita tax program   A practitioner must exercise due diligence when performing the following duties. Vita tax program Preparing or assisting in the preparing, approving, and filing of returns, documents, affidavits, and other papers relating to IRS matters. Vita tax program Determining the correctness of oral or written representations made by him or her to the Department of the Treasury. Vita tax program Determining the correctness of oral or written representations made by him or her to clients with reference to any matter administered by the IRS. Vita tax program Restrictions Practitioners are restricted from engaging in certain practices. Vita tax program The following paragraphs discuss some of these restricted practices. Vita tax program Delays. Vita tax program   A practitioner must not unreasonably delay the prompt disposition of any matter before the IRS. Vita tax program Assistance from disbarred or suspended persons and former IRS employees. Vita tax program   A practitioner must not knowingly, directly or indirectly, do the following. Vita tax program Accept assistance from, or assist, any person who is under disbarment or suspension from practice before the IRS if the assistance relates to matters considered practice before the IRS. Vita tax program Accept assistance from any former government employee where provisions of Circular 230 or any federal law would be violated. Vita tax program Performance as a notary. Vita tax program   A practitioner who is a notary public and is employed as counsel, attorney, or agent in a matter before the IRS, or has a material interest in the matter, cannot engage in any notary activities related to that matter. Vita tax program Negotiations of taxpayer refund checks. Vita tax program   Practitioners must not endorse or otherwise negotiate (cash) any refund check (including directing or accepting payment by any means, electronic or otherwise, in an account owned or controlled by the practitioner or any firm or other entity with whom the practitioner is associated) issued to the taxpayer. Vita tax program Incompetence and Disreputable Conduct Any practitioner or unenrolled return preparer may be disbarred or suspended from practice before the IRS, or censured, for incompetence or disreputable conduct. Vita tax program The following list contains examples of conduct that is considered disreputable. Vita tax program Being convicted of any criminal offense under the revenue laws or of any offense involving dishonesty or breach of trust. Vita tax program Knowingly giving false or misleading information in connection with federal tax matters, or participating in such activity. Vita tax program Soliciting employment by prohibited means as discussed in section 10. Vita tax program 30 of Circular 230. Vita tax program Willfully failing to file a federal tax return, evading or attempting to evade any federal tax or payment, or participating in such actions. Vita tax program Misappropriating, or failing to properly and promptly remit, funds received from clients for payment of taxes or other obligations due the United States. Vita tax program Directly or indirectly attempting to influence the official action of IRS employees by the use of threats, false accusations, duress, or coercion, or by offering gifts, favors, or any special inducements. Vita tax program Being disbarred or suspended from practice as an attorney, CPA, public accountant, or actuary, by the District of Columbia or any state, possession, territory, commonwealth, or any federal court, or any federal agency, body, or board. Vita tax program Knowingly aiding and abetting another person to practice before the IRS during a period of suspension, disbarment, or ineligibility of that other person. Vita tax program Using abusive language, making false accusations and statements knowing them to be false, circulating or publishing malicious or libelous matter, or engaging in any contemptuous conduct in connection with practice before the IRS. Vita tax program Giving a false opinion knowingly, recklessly, or through gross incompetence; or following a pattern of providing incompetent opinions in questions arising under the federal tax laws. Vita tax program Censure, Disbarments, and Suspensions The Office of Professional Responsibility may censure or institute proceedings to censure, suspend or disbar any attorney, CPA, or enrolled agent who has violated Circular 230. Vita tax program A practitioner will be given the opportunity to demonstrate compliance with the rules before any disciplinary action is taken. Vita tax program Authorizing a Representative You may either represent yourself, or you may authorize an individual to represent you before the IRS. Vita tax program If you chose to have someone represent you, your representative must be a person eligible to practice before the IRS. Vita tax program See Who Can Practice Before the IRS, earlier. Vita tax program What Is a Power of Attorney? A power of attorney is your written authorization for an individual to act on your behalf. Vita tax program If the authorization is not limited, the individual generally can perform all acts that you can perform. Vita tax program The authority granted to a registered tax return preparer or an unenrolled preparer is limited. Vita tax program For information on the limits regarding registered tax return preparers, see Circular 230 §10. Vita tax program 3(f). Vita tax program For information on the limits regarding unenrolled preparers, see Publication 470. Vita tax program Acts performed. Vita tax program   Any representative, other than a registered tax return preparer or an unenrolled return preparer, can usually perform the following acts. Vita tax program Represent you before any office of the IRS. Vita tax program Sign an offer or a waiver of restriction on assessment or collection of a tax deficiency, or a waiver of notice of disallowance of claim for credit or refund. Vita tax program Sign a consent to extend the statutory time period for assessment or collection of a tax. Vita tax program Sign a closing agreement. Vita tax program Signing your return. Vita tax program   The representative named under a power of attorney is not permitted to sign your income tax return unless: The signature is permitted under the Internal Revenue Code and the related regulations (see Regulations section 1. Vita tax program 6012-1(a)(5)). Vita tax program You specifically authorize this in your power of attorney. Vita tax program For example, the regulation permits a representative to sign your return if you are unable to sign the return due to: Disease or injury. Vita tax program Continuous absence from the United States (including Puerto Rico) for a period of at least 60 days prior to the date required by law for filing the return. Vita tax program Other good cause if specific permission is requested of and granted by the IRS. Vita tax program When a return is signed by a representative, it must be accompanied by a power of attorney (or copy) authorizing the representative to sign the return. Vita tax program For more information, see the Form 2848 instructions. Vita tax program Limitation on substitution or delegation. Vita tax program   A recognized representative can substitute or delegate authority under the power of attorney to another recognized representative only if the act is specifically authorized by you on the power of attorney. Vita tax program   After a substitution has been made, only the newly recognized representative will be recognized as the taxpayer's representative. Vita tax program If a delegation of power has been made, both the original and the delegated representative will be recognized by the IRS to represent you. Vita tax program Disclosure of returns to a third party. Vita tax program   Your representative cannot execute consents that will allow the IRS to disclose tax return or return information to a third party unless you specifically delegate this authority to your representative on line 5 of Form 2848. Vita tax program Incapacity or incompetency. Vita tax program   A power of attorney is generally terminated if you become incapacitated or incompetent. Vita tax program   The power of attorney can continue, however, in the case of your incapacity or incompetency if you authorize this on line 5 “Other” of the Form 2848 and if your non-IRS durable power of attorney meets all the requirements for acceptance by the IRS. Vita tax program See Non-IRS powers of attorney, later. Vita tax program When Is a Power of Attorney Required? Submit a power of attorney when you want to authorize an individual to represent you before the IRS, whether or not the representative performs any of the other acts cited earlier under What Is a Power of Attorney. Vita tax program A power of attorney is most often required when you want to authorize another individual to perform at least one of the following acts on your behalf. Vita tax program Represent you at a meeting with the IRS. Vita tax program Prepare and file a written response to the IRS. Vita tax program Form Required Use Form 2848 to appoint a recognized representative to act on your behalf before the IRS. Vita tax program Individuals recognized to practice before the IRS are listed under Part II, Declaration of Representative, of Form 2848. Vita tax program Your representative must complete that part of the form. Vita tax program Non-IRS powers of attorney. Vita tax program   The IRS will accept a non-IRS power of attorney, but a completed Form 2848 must be attached in order for the power of attorney to be entered on the Centralized Authorization File (CAF) system. Vita tax program For more information, see Processing a non-IRS power of attorney, later. Vita tax program   If you want to use a power of attorney document other than Form 2848, it must contain the following information. Vita tax program Your name and mailing address. Vita tax program Your social security number and/or employer identification number. Vita tax program Your employee plan number, if applicable. Vita tax program The name and mailing address of your representative(s). Vita tax program The types of tax involved. Vita tax program The federal tax form number. Vita tax program The specific year(s) or period(s) involved. Vita tax program For estate tax matters, the decedent's date of death. Vita tax program A clear expression of your intention concerning the scope of authority granted to your representative(s). Vita tax program Your signature and date. Vita tax program You also must attach to the non-IRS power of attorney a signed and dated statement made by your representative. Vita tax program This statement, which is referred to as the Declaration of Representative, is contained in Part II of Form 2848. Vita tax program The statement should read: I am not currently under suspension or disbarment from practice before the Internal Revenue Service or other practice of my profession by any other authority, I am aware of the regulations contained in Circular 230, I am authorized to represent the taxpayer(s) identified in the power of attorney, and I am an individual described in 26 CFR 601. Vita tax program 502(b). Vita tax program Required information missing. Vita tax program   The IRS will not accept your non-IRS power of attorney if it does not contain all the information listed above. Vita tax program You can sign and submit a completed Form 2848 or a new non-IRS power of attorney that contains all the information. Vita tax program If you cannot sign an acceptable replacement document, your attorney-in-fact may be able to perfect (make acceptable to the IRS) your non-IRS power of attorney by using the procedure described next. Vita tax program Procedure for perfecting a non-IRS power of attorney. Vita tax program   Under the following conditions, the attorney-in-fact named in your non-IRS power of attorney can sign a Form 2848 on your behalf. Vita tax program The original non-IRS power of attorney grants authority to handle federal tax matters (for example, general authority to perform any acts). Vita tax program The attorney-in-fact attaches a statement (signed under penalty of perjury) to the Form 2848 stating that the original non-IRS power of attorney is valid under the laws of the governing jurisdiction. Vita tax program Example. Vita tax program John Elm, a taxpayer, signs a non-IRS durable power of attorney that names his neighbor and CPA, Ed Larch, as his attorney-in-fact. Vita tax program The power of attorney grants Ed the authority to perform any and all acts on John's behalf. Vita tax program However, it does not list specific tax-related information such as types of tax or tax form numbers. Vita tax program Shortly after John signs the power of attorney, he is declared incompetent. Vita tax program Later, a federal tax matter arises concerning a prior year return filed by John. Vita tax program Ed attempts to represent John before the IRS but is rejected because the durable power of attorney does not contain required information. Vita tax program If Ed attaches a statement (signed under the penalty of perjury) that the durable power of attorney is valid under the laws of the governing jurisdiction, he can sign a completed Form 2848 and submit it on John's behalf. Vita tax program If Ed can practice before the IRS (see Who Can Practice Before the IRS, earlier), he can name himself as representative on Form 2848. Vita tax program Otherwise, he must name another individual who can practice before the IRS. Vita tax program Processing a non-IRS power of attorney. Vita tax program   The IRS has a centralized computer database system called the CAF system. Vita tax program This system contains information on the authority of taxpayer representatives. Vita tax program Generally, when you submit a power of attorney document to the IRS, it is processed for inclusion on the CAF system. Vita tax program Entry of your power of attorney on the CAF system enables IRS personnel, who do not have a copy of your power of attorney, to verify the authority of your representative by accessing the CAF. Vita tax program It also enables the IRS to automatically send copies of notices and other IRS communications to your representative if you specify that your representative should receive those communications. Vita tax program   You can have your non-IRS power of attorney entered on the CAF system by attaching it to a completed Form 2848 and submitting it to the IRS. Vita tax program Your signature is not required; however, your attorney-in-fact must sign the Declaration of Representative (see Part II of Form 2848). Vita tax program Preparation of Form — Helpful Hints The preparation of Form 2848 is illustrated by an example, later under How Do I Fill Out Form 2848. Vita tax program However, the following will also assist you in preparing the form. Vita tax program Line-by-line hints. Vita tax program   The following hints are summaries of some of the line-by-line instructions for Form 2848. Vita tax program Line 1—Taxpayer information. Vita tax program   If a joint return is involved, the husband and wife each file a separate Form 2848 if they both want to be represented. Vita tax program If only one spouse wants to be represented in the matter, that spouse files a Form 2848. Vita tax program Line 2—Representative(s). Vita tax program   Only individuals may be named as representatives. Vita tax program If your representative has not been assigned a CAF number, enter “None” on that line and the IRS will issue one to your representative. Vita tax program If the representative's address or phone number has changed since the CAF number was issued, you should check the appropriate box. Vita tax program Enter your representative's fax number if available. Vita tax program   If you want to name more than three representatives, attach additional Form(s) 2848. Vita tax program The IRS can send copies of notices and communications to two of your representatives. Vita tax program You must, however, check the boxes on line 2 of the Form 2848 if you want the IRS to routinely send copies of notices and communications to your representatives. Vita tax program If you do not check the boxes, your representatives will not routinely receive copies of notices and communications. Vita tax program Line 3—Tax matters. Vita tax program   You may list any tax years or periods that have already ended as of the date you sign the power of attorney. Vita tax program However, you may include on a power of attorney only future tax periods that end no later than 3 years after the date the power of attorney is received by the IRS. Vita tax program The 3 future periods are determined starting after December 31 of the year the power of attorney is received by the IRS. Vita tax program However, avoid general references such as “all years” or “all taxes. Vita tax program ” Any Form 2848 with general references will be returned. Vita tax program Line 4—Specific use not recorded on Centralized Authorization File (CAF). Vita tax program   Certain matters cannot be recorded on the CAF system. Vita tax program Examples of such matters include, but are not limited to, the following. Vita tax program Requests for a private letter ruling or technical advice. Vita tax program Applications for an employer identification number (EIN). Vita tax program Claims filed on Form 843, Claim for Refund and Request for Abatement. Vita tax program Corporate dissolutions. Vita tax program Requests for change of accounting method. Vita tax program Requests for change of accounting period. Vita tax program Applications for recognition of exemption under sections 501(c)(3), 501(a), or 521 (Forms 1023, 1034, or 1028). Vita tax program Request for a determination of the qualified status of an employee benefit plan (Forms 5300, 5307, or 5310). Vita tax program Application for Award for Original Information under section 7623. Vita tax program Voluntary submissions under the Employee Plans Compliance Resolution System (EPCRS). Vita tax program Freedom of Information Act requests. Vita tax program If the tax matter described on line 3 of Form 2848 concerns one of these matters specifically, check the box on line 4. Vita tax program If this box is checked, the representative should mail or fax the power of attorney to the IRS office handling the matter. Vita tax program Otherwise, the representative should bring a copy of the power of attorney to each meeting with the IRS. Vita tax program Where To File a Power of Attorney Generally, you can mail or fax a paper Form 2848 directly to the IRS. Vita tax program To determine where you should file Form 2848, see Where To File in the instructions for Form 2848. Vita tax program If Form 2848 is for a specific use, mail or fax it to the office handling that matter. Vita tax program For more information on specific use, see the Instructions for Form 2848, line 4. Vita tax program FAX copies. Vita tax program   The IRS will accept a copy of a power of attorney that is submitted by facsimile transmission (fax). Vita tax program If you choose to file a power of attorney by fax, be sure the appropriate IRS office is equipped to accept this type of transmission. Vita tax program Your representative may be able to file Form 2848 electronically via the IRS website. Vita tax program For more information, your representative can go to www. Vita tax program irs. Vita tax program gov and under the Tax Professionals tab, click on e-services–Online Tools for Tax Professionals. Vita tax program If you complete Form 2848 for electronic signature authorization, do not file Form 2848 with the IRS. Vita tax program Instead, give it to your representative, who will retain the document. Vita tax program Updating a power of attorney. Vita tax program   Submit any update or modification to an existing power of attorney in writing. Vita tax program Your signature (or the signature of the individual(s) authorized to sign on your behalf) is required. Vita tax program Do this by sending the updated Form 2848 or non-IRS power of attorney to the IRS office(s) where you previously sent the original(s), including the center where the related return was, or will be filed. Vita tax program   A recognized representative may substitute or delegate authority if you specifically authorize your representative to substitute or delegate representation in the original power of attorney. Vita tax program To make a substitution or delegation, the representative must file the following items with the IRS office(s) where the power of attorney was filed. Vita tax program A written notice of substitution or delegation signed by the recognized representative. Vita tax program A written declaration of representative made by the new representative. Vita tax program A copy of the power of attorney that specifically authorizes the substitution or delegation. Vita tax program Retention/Revocation of Prior Power(s) of Attorney A newly filed power of attorney concerning the same matter will revoke a previously filed power of attorney. Vita tax program However, the new power of attorney will not revoke the prior power of attorney if it specifically states it does not revoke such prior power of attorney and either of the following are attached to the new power of attorney. Vita tax program A copy of the unrevoked prior power of attorney, or A statement signed by the taxpayer listing the name and address of each representative authorized under the prior unrevoked power of attorney. Vita tax program Note. Vita tax program The filing of Form 2848 will not revoke any  Form 8821 that is in effect. Vita tax program Revocation of Power of Attorney/Withdrawal of Representative If you want to revoke an existing power of attorney and do not want to name a new representative, or if a representative wants to withdraw from representation, mail or fax a copy of the previously executed power of attorney to the IRS, or if the power of attorney is for a specific matter, to the IRS office handling the matter. Vita tax program If the taxpayer is revoking the power of attorney, the taxpayer must write “REVOKE” across the top of the first page with a current signature and date below this annotation. Vita tax program If the representative is withdrawing from the representation, the representative must write “WITHDRAW” across the top of the first page with a current signature and date below this annotation. Vita tax program If you do not have a copy of the power of attorney you want to revoke or withdraw, send a statement to the IRS. Vita tax program The statement of revocation or withdrawal must indicate that the authority of the power of attorney is revoked or withdrawn, list the matters and periods, and must be signed and dated by the taxpayer or representative as applicable. Vita tax program If the taxpayer is revoking, list the name and address of each recognized representative whose authority is revoked. Vita tax program When the taxpayer is completely revoking authority, the form should state “remove all years/periods” instead of listing the specific tax matter, years, or periods. Vita tax program If the representative is withdrawing, list the name, TIN, and address (if known) of the taxpayer. Vita tax program To revoke a specific use power of attorney, send the power of attorney or statement of revocation to the IRS office handling your case, using the above instructions. Vita tax program A power of attorney held by a student will be recorded on the CAF system for 130 days from the receipt date. Vita tax program If you are authorizing a student to represent you after that time, you will need to submit a current and valid Form 2848. Vita tax program When Is a Power of Attorney Not Required? A power of attorney is not required when the third party is not dealing with the IRS as your representative. Vita tax program The following situations do not require a power of attorney. Vita tax program Providing information to the IRS. Vita tax program Authorizing the disclosure of tax return information through Form 8821, Tax Information Authorization, or other written or oral disclosure consent. Vita tax program Allowing the IRS to discuss return information with a third party via the checkbox provided on a tax return or other document. Vita tax program Allowing a tax matters partner or person (TMP) to perform acts for the partnership. Vita tax program Allowing the IRS to discuss return information with a fiduciary. Vita tax program How Do I Fill Out Form 2848? The following example illustrates how to complete Form 2848. Vita tax program The two completed forms for this example are shown on the next pages. Vita tax program Example. Vita tax program Stan and Mary Doe have been notified that their joint tax returns (Forms 1040) for 2009, 2010, and 2011 are being examined. Vita tax program They have decided to appoint Jim Smith, an enrolled agent, to represent them in this matter and any future matters concerning these returns. Vita tax program Jim, who has prepared returns at the same location for years, already has a Centralized Authorization File (CAF) number assigned to him. Vita tax program Mary does not want Jim to sign any agreements on her behalf, but Stan is willing to have Jim do so. Vita tax program They want copies of all notices and written communications sent to Jim. Vita tax program This is the first time Stan and Mary have given power of attorney to anyone. Vita tax program They should each complete a Form 2848 as follows. Vita tax program Line 1—Taxpayer information. Vita tax program   Stan and Mary must each file a separate Form 2848. Vita tax program On his separate Form 2848, Stan enters his name, street address, and social security number in the spaces provided. Vita tax program Mary does likewise on her separate Form 2848. Vita tax program Line 2—Representative(s). Vita tax program   On their separate Forms 2848, Stan and Mary each enters the name and current address of their chosen representative, Jim Smith. Vita tax program Both Stan and Mary want Jim Smith to receive notices and communications concerning the matters identified in line 3, so on their separate Forms 2848, Stan and Mary each checks the box in the first column of line 2. Vita tax program They also enter Mr. Vita tax program Smith's CAF number, his telephone number, and his fax number. Vita tax program Mr. Vita tax program Smith's address, telephone number, and fax number have not changed since the IRS issued his CAF number, so Stan and Mary do not check the boxes in the second column. Vita tax program Line 3—Tax Matters. Vita tax program   On their separate Forms 2848, Stan and Mary each enters “income” for the type of tax, “1040” for the form number, and “2009, 2010, and 2011” for the tax years. Vita tax program Line 4—Specific use not recorded on Centralized Authorization File (CAF). Vita tax program   On their separate Forms 2848, Stan and Mary make no entry on this line because they do not want to restrict the use of their powers of attorney to a specific use that is not recorded on the CAF. Vita tax program See Preparation of Form — Helpful Hints, earlier. Vita tax program Line 5—Acts authorized. Vita tax program   Mary wants to sign any agreement that reflects changes to her and Stan's joint 2009, 2010, and 2011 income tax liability, so she writes “Taxpayer must sign any agreement form” on line 5 of her Form 2848. Vita tax program Stan does not wish to restrict the authority of Jim Smith in this regard, so he leaves line 5 of his Form 2848 blank. Vita tax program If either Mary or Stan had chosen, they could have listed other restrictions on line 5 of their separate Forms 2848. Vita tax program Line 6—Retention/revocation of prior power(s) of attorney. Vita tax program   Stan and Mary are each filing their first powers of attorney, so they make no entry on this line. Vita tax program However, if they had filed prior powers of attorney, the filing of this current power would revoke any earlier ones for the same tax matter(s) unless they checked the box on line 6 and attached a copy of the prior power of attorney that they wanted to remain in effect. Vita tax program   If Mary later decides that she can handle the examination on her own, she can revoke her power of attorney even though Stan does not revoke his power of attorney. Vita tax program (See Revocation of Power of Attorney/Withdrawal of Representative, earlier, for the special rules that apply. Vita tax program ) Line 7—Signature of taxpayer. Vita tax program   Stan and Mary each signs and dates his or her Form 2848. Vita tax program If a taxpayer does not sign, the IRS cannot accept the form. Vita tax program Part II—Declaration of Representative. Vita tax program   Jim Smith must complete this part of Form 2848. Vita tax program If he does not sign this part, the IRS cannot accept the form. Vita tax program What Happens to the Power of Attorney When Filed? A power of attorney will be recognized after it is received, reviewed, and determined by the IRS to contain the required information. Vita tax program However, until a power of attorney is entered on the CAF system, IRS personnel may be unaware of the authority of the person you have named to represent you. Vita tax program Therefore, during this interim period, IRS personnel may request that you or your representative bring a copy to any meeting with the IRS. Vita tax program This image is too large to be displayed in the current screen. Vita tax program Please click the link to view the image. Vita tax program Filled-in Form 2848 - Page 1 This image is too large to be displayed in the current screen. Vita tax program Please click the link to view the image. Vita tax program Filled-in Form 2848 - Page 2 This image is too large to be displayed in the current screen. Vita tax program Please click the link to view the image. Vita tax program Filled-in Form 2848 - Page 1 This image is too large to be displayed in the current screen. Vita tax program Please click the link to view the image. Vita tax program Filled-in Form 2848 - Page 2 Processing and Handling How the power of attorney is processed and handled depends on whether it is a complete or incomplete document. Vita tax program Incomplete document. Vita tax program   If Form 2848 is incomplete, the IRS will attempt to secure the missing information either by writing or telephoning you or your representative. Vita tax program For example, if your signature or signature date is missing, the IRS will contact you. Vita tax program If information concerning your representative is missing and information sufficient to make a contact (such as an address and/or a telephone number) is on the document, the IRS will try to contact your representative. Vita tax program   In either case, the power of attorney is not considered valid until all required information is entered on the document. Vita tax program The individual(s) named as representative(s) will not be recognized to practice before the IRS, on your behalf, until the document is complete and accepted by the IRS. Vita tax program Complete document. Vita tax program   If the power of attorney is complete and valid, the IRS will take action to recognize the representative. Vita tax program In most instances, this includes processing the document on the CAF system. Vita tax program Recording the data on the CAF system enables the IRS to direct copies of mailings to authorized representatives and to readily recognize the scope of authority granted. Vita tax program Documents not processed on CAF. Vita tax program   Specific-use powers of attorney are not processed on the CAF system (see Preparation of Form – Helpful Hints, earlier). Vita tax program For example, a power of attorney that is a one-time or specific-issue grant of authority is not processed on the CAF system. Vita tax program These documents remain with the related case files. Vita tax program In this situation, you should check the box on line 4 of Form 2848. Vita tax program In these situations, the representative should bring a copy of the power of attorney to each meeting with the IRS. Vita tax program Dealing With the Representative After a valid power of attorney is filed, the IRS will recognize your representative. Vita tax program However, if it appears the representative is responsible for unreasonably delaying or hindering the prompt disposition of an IRS matter by failing to furnish, after repeated requests, nonprivileged information, the IRS can contact you directly. Vita tax program For example, in most instances in which a power of attorney is recognized, the IRS will contact the representative to set up appointments and to provide lists of required items. Vita tax program However, if the representative is unavailable, does not respond to repeated requests, and does not provide required items (other than items considered privileged), the IRS can bypass your representative and contact you directly. Vita tax program If a representative engages in conduct described above, the matter can be referred to the Office of Professional Responsibility for consideration of possible disciplinary action. Vita tax program Notices and other correspondence. Vita tax program   If you have a recognized representative, you and the representative will routinely receive notices and other correspondence from the IRS (either the original or a copy) if you checked the box in the left column of line 2 of Form 2848. Vita tax program If the power of attorney is processed on the CAF system, the IRS will send your representative(s) a duplicate of all computer-generated correspondence that is sent to you. Vita tax program This includes notices and letters produced either at the Martinsburg Computing Center, or other IRS centers. Vita tax program The IRS employee handling the case is responsible for ensuring that the original and any requested copies of each manually-generated correspondence are sent to you and your representative(s) in accordance with your authorization. Vita tax program How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Vita tax program By selecting the method that is best for you, you will have quick and easy access to tax help. Vita tax program Free help with your return. Vita tax program   Free help in preparing your return is available nationwide from IRS-certified volunteers. Vita tax program The Volunteer Income Tax Assistance (VITA) program is designed to help low and moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Vita tax program Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Vita tax program To find the nearest VITA or TCE site, visit IRS. Vita tax program gov or call 1-800-906-9887 or 1-800-829-1040. Vita tax program   As part of the TCE program, AARP offers the Tax-Aide counseling program. Vita tax program To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. Vita tax program aarp. Vita tax program org/money/taxaide. Vita tax program   For more information on these programs, go to IRS. Vita tax program gov and enter keyword “VITA” in the upper right-hand corner. Vita tax program Internet. Vita tax program You can access the IRS website at IRS. Vita tax program gov 24 hours a day, 7 days a week to: E-file your return. Vita tax program Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Vita tax program Check the status of your refund. Vita tax program Go to IRS. Vita tax program gov and click on Where's My Refund. Vita tax program Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Vita tax program If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Vita tax program Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Vita tax program Download forms, including talking tax forms, instructions, and publications. Vita tax program Order IRS products online. Vita tax program Research your tax questions online. Vita tax program Search publications online by topic or keyword. Vita tax program Use the online Internal Revenue Code, regulations, or other official guidance. Vita tax program View Internal Revenue Bulletins (IRBs) published in the last few years. Vita tax program Figure your withholding allowances using the withholding calculator online at www. Vita tax program irs. Vita tax program gov/individuals. Vita tax program Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at www. Vita tax program irs. Vita tax program gov/individuals. Vita tax program Sign up to receive local and national tax news by email. Vita tax program Get information on starting and operating a small business. Vita tax program Phone. Vita tax program Many services are available by phone. Vita tax program   Ordering forms, instructions, and publications. Vita tax program Call 1-800-TAX -FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Vita tax program You should receive your order within 10 days. Vita tax program Asking tax questions. Vita tax program Call the IRS with your tax questions at 1-800-829-1040. Vita tax program Solving problems. Vita tax program You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Vita tax program An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Vita tax program Call your local Taxpayer Assistance Center for an appointment. Vita tax program To find the number, go to www. Vita tax program irs. Vita tax program gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Vita tax program TTY/TDD equipment. Vita tax program If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Vita tax program TeleTax topics. Vita tax program Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Vita tax program Refund information. Vita tax program To check the status of your refund, call 1-800-829-1954 or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Vita tax program Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Vita tax program If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Vita tax program Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Vita tax program If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Vita tax program Other refund information. Vita tax program To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. Vita tax program Evaluating the quality of our telephone services. Vita tax program To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Vita tax program One method is for a second IRS representative to listen in on or record random telephone calls. Vita tax program Another is to ask some callers to complete a short survey at the end of the call. Vita tax program Walk-in. Vita tax program Many products and services are available on a walk-in basis. Vita tax program   Products. Vita tax program You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Vita tax program Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Vita tax program Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Vita tax program Services. Vita tax program You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Vita tax program An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Vita tax program If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Vita tax program No appointment is necessary—just walk in. Vita tax program If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Vita tax program A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Vita tax program If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Vita tax program All other issues will be handled without an appointment. Vita tax program To find the number of your local office, go to  www. Vita tax program irs. Vita tax program gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Vita tax program Mail. Vita tax program You can send your order for forms, instructions, and publications to the address below. Vita tax program You should receive a response within 10 days after your request is received. Vita tax program  Internal Revenue Service 1201 N. Vita tax program Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. Vita tax program   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Vita tax program Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. Vita tax program We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. Vita tax program Remember, the worst thing you can do is nothing at all. Vita tax program   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. Vita tax program You face (or your business is facing) an immediate threat of adverse action. Vita tax program You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. Vita tax program   If you qualify for our help, we’ll do everything we can to get your problem resolved. Vita tax program You will be assigned to one advocate who will be with you at every turn. Vita tax program We have offices in every state, the District of Columbia, and Puerto Rico. Vita tax program Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. Vita tax program And our services are always free. Vita tax program   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Vita tax program Our tax toolkit at www. Vita tax program TaxpayerAdvocate. Vita tax program irs. Vita tax program gov can help you understand these rights. Vita tax program   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. Vita tax program irs. Vita tax program gov/advocate. Vita tax program You can also call our toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059. Vita tax program   TAS also handles large-scale or systemic problems that affect many taxpayers. Vita tax program If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Vita tax program irs. Vita tax program gov/advocate. Vita tax program Low Income Taxpayer Clinics (LITCs). Vita tax program   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. Vita tax program Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. Vita tax program These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. Vita tax program Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. Vita tax program For more information and to find a clinic near you, see the LITC page on www. Vita tax program irs. Vita tax program gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. Vita tax program This publication is also available by calling 1-800-829-3676 or at your local IRS office. Vita tax program Free tax services. Vita tax program   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Vita tax program Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Vita tax program The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Vita tax program The majority of the information and services listed in this publication are available to you free of charge. Vita tax program If there is a fee associated with a resource or service, it is listed in the publication. Vita tax program   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Vita tax program DVD for tax products. Vita tax program You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Vita tax program Prior-year forms, instructions, and publications. Vita tax program Tax Map: an electronic research tool and finding aid. Vita tax program Tax law frequently asked questions. Vita tax program Tax Topics from the IRS telephone response system. Vita tax program Internal Revenue Code—Title 26 of the U. Vita tax program S. Vita tax program Code. Vita tax program Links to other Internet based Tax Research Materials. Vita tax program Fill-in, print, and save features for most tax forms. Vita tax program Internal Revenue Bulletins. Vita tax program Toll-free and email technical support. Vita tax program Two releases during the year. Vita tax program  – The first release will ship the beginning of January. Vita tax program  – The final release will ship the beginning of March. Vita tax program Purchase the DVD from National Technical Information Service (NTIS) at www. Vita tax program irs. Vita tax program gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Vita tax program Prev  Up  Next   Home   More Online Publications