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Volunteer Income Tax

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Volunteer Income Tax

Volunteer income tax Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. Volunteer income tax Proc. Volunteer income tax 2009-37 Table of Contents SECTION 1. Volunteer income tax PURPOSE SECTION 2. Volunteer income tax BACKGROUND SECTION 3. Volunteer income tax SCOPE SECTION 4. Volunteer income tax ELECTION PROCEDURES SECTION 5. Volunteer income tax REQUIRED INFORMATION STATEMENT SECTION 6. Volunteer income tax EFFECTIVE DATE SECTION 7. Volunteer income tax TRANSITION RULE SECTION 8. Volunteer income tax PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. Volunteer income tax PURPOSE . Volunteer income tax 01 This revenue procedure provides the exclusive procedures for taxpayers to make an election to defer recognizing discharge of indebtedness income (“COD income”) under § 108(i) of the Internal Revenue Code. Volunteer income tax . Volunteer income tax 02 This revenue procedure also requires taxpayers making the § 108(i) election to provide additional information on returns beginning with the taxable year following the taxable year for which the taxpayer makes the election. Volunteer income tax This revenue procedure describes the time and manner of providing this additional information. Volunteer income tax . Volunteer income tax 03 The Internal Revenue Service and Treasury Department intend to issue additional guidance under § 108(i) that may include regulations addressing matters in this revenue procedure. Volunteer income tax Taxpayers should be aware that these regulations may be retroactive. Volunteer income tax See § 7805(b)(2). Volunteer income tax This revenue procedure may be modified to provide procedures consistent with additional guidance. Volunteer income tax SECTION 2. Volunteer income tax BACKGROUND . Volunteer income tax 01 Section 108(i), Generally. Volunteer income tax Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. Volunteer income tax L. Volunteer income tax No. Volunteer income tax 111-5, 123 Stat. Volunteer income tax 338. Volunteer income tax In general, § 108(i) provides that, at the election of a taxpayer, COD income realized in connection with a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument is includible in gross income ratably over a 5-taxable-year inclusion period, beginning with the taxpayer’s fourth or fifth taxable year following the taxable year of the reacquisition. Volunteer income tax Generally, if a taxpayer makes a § 108(i) election and reacquires (or is treated as reacquiring) the applicable debt instrument generating the COD income for a new debt instrument with original issue discount (“OID”), then interest deductions for this OID also are deferred, as provided in § 108(i)(2). Volunteer income tax The OID deferral rule, however, does not apply if the amount of OID is less than a de minimis amount, as determined under § 1273(a)(3) and § 1. Volunteer income tax 1273-1(d) of the Income Tax Regulations. Volunteer income tax The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. Volunteer income tax For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). Volunteer income tax A taxpayer must take into account any item of income or deduction deferred under § 108(i), and not previously taken into account, in the taxable year in which certain events occur (such as the liquidation of the taxpayer and upon other events specified in administrative guidance). Volunteer income tax See § 108(i)(5)(D). Volunteer income tax The rule regarding acceleration of deferred COD income and OID deductions also applies in the case of certain dispositions by persons holding ownership interests in pass-through entities. Volunteer income tax Section 108(i)(5)(D)(ii). Volunteer income tax For purposes of § 108(i), regulated investment companies (as defined in § 851(a)) and real estate investment trusts (as defined in § 856(a)) are not pass-through entities. Volunteer income tax . Volunteer income tax 02 Applicable Debt Instrument. Volunteer income tax Section 108(i)(3)(A) defines the term “applicable debt instrument” to mean any debt instrument issued by a C corporation or by any other person in connection with the conduct of a trade or business by that person. Volunteer income tax The term “debt instrument” means any bond, debenture, note, certificate, or any other instrument or contractual arrangement constituting indebtedness within the meaning of § 1275(a)(1). Volunteer income tax Section 108(i)(3)(B). Volunteer income tax For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. Volunteer income tax 1502-13(g)(2)(ii)), an applicable debt instrument includes only an instrument for which COD income is realized upon the instrument’s deemed satisfaction under § 1. Volunteer income tax 1502-13(g)(5). Volunteer income tax . Volunteer income tax 03 Reacquisition. Volunteer income tax Section 108(i)(4)(A) defines the term “reacquisition” to mean, with respect to any applicable debt instrument, any acquisition of the debt instrument by the debtor that issued (or is otherwise the obligor under) the debt instrument, or a person related to the debtor under § 108(e)(4). Volunteer income tax The term “acquisition” includes an acquisition of the debt instrument for cash or other property, the exchange of the debt instrument for another debt instrument (including an exchange resulting from a modification of the debt instrument), the exchange of the debt instrument for corporate stock or a partnership interest, the contribution of the debt instrument to capital, and the complete forgiveness of the indebtedness by the holder of the debt instrument. Volunteer income tax See § 108(i)(4)(B). Volunteer income tax The term “acquisition” also includes an indirect acquisition within the meaning of § 1. Volunteer income tax 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). Volunteer income tax For example, if a corporation acquires debt of a partnership that the partnership issued in connection with its trade or business, and the partnership and corporation become related within six months of the corporation’s acquisition of the debt, the indirect acquisition is an acquisition for which an election under § 108(i) may be made. Volunteer income tax . Volunteer income tax 04 General Requirements for the Section 108(i) Election. Volunteer income tax Section 108(i)(5)(B) provides, in general, that a taxpayer makes the § 108(i) election by including a statement that clearly identifies the applicable debt instrument with the return of tax imposed for the taxable year in which the reacquisition of the instrument occurs. Volunteer income tax (For purposes of this revenue procedure, a return of tax or income tax return includes an information return, and a taxpayer includes a person that files an information return. Volunteer income tax ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. Volunteer income tax Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. Volunteer income tax . Volunteer income tax 05 Section 108(i) Elections Made by Pass-through Entities. Volunteer income tax In the case of COD income realized by a pass-through entity from the reacquisition of an applicable debt instrument, the pass-through entity makes the § 108(i) election. Volunteer income tax Section 108(i)(5)(B)(iii). Volunteer income tax . Volunteer income tax 06 Additional Information on Subsequent Years’ Returns. Volunteer income tax Section 108(i)(7) authorizes the Service to issue guidance necessary or appropriate for applying § 108(i), including requiring reporting the election and other information on returns of tax for subsequent taxable years. Volunteer income tax . Volunteer income tax 07 Exclusivity. Volunteer income tax Section 108(i)(5)(C) provides that if a taxpayer elects to apply § 108(i) to an applicable debt instrument, § 108(a)(1)(A), (B), (C), and (D) do not apply to COD income deferred under § 108(i). Volunteer income tax . Volunteer income tax 08 Allocation of Deferred COD Income on Partnership Indebtedness. Volunteer income tax Section 4. Volunteer income tax 04(3) of this revenue procedure describes how a partnership may elect under § 108(i) to defer a portion of the COD income realized from the reacquisition of an applicable debt instrument. Volunteer income tax If a partnership elects to defer all or any portion of COD income realized from the reacquisition of an applicable debt instrument, all of the COD income with respect to that debt instrument, without regard to § 108(i), is allocated to the partners in the partnership immediately before the reacquisition in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Volunteer income tax 704-1(b)(2)(iii). Volunteer income tax Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). Volunteer income tax The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). Volunteer income tax The partner’s COD income amount that is not deferred and is included in the partner’s distributive share of partnership income for the taxable year of the partnership in which the reacquisition occurs is the partner’s included amount (“included amount”). Volunteer income tax . Volunteer income tax 09 Partner’s Deferred § 752 Amount. Volunteer income tax A decrease in a partner’s share of a partnership liability resulting from the reacquisition of an applicable debt instrument that is not treated as a current distribution of money to the partner under § 752 by reason of § 108(i)(6) is the partner’s deferred § 752 amount (“deferred § 752 amount”). Volunteer income tax A partner’s deferred § 752 amount may not exceed the lesser of (i) the partner’s deferred amount or (ii) gain that the partner would recognize in the year of reacquisition under § 731 as a result of the reacquisition absent § 108(i)(6). Volunteer income tax To determine the amount of gain the partner would recognize under clause (ii) of the preceding sentence, the amount of any deemed distribution of money under § 752(b) resulting from the decrease in the partner’s share of a reacquired applicable debt instrument that is treated as an advance or draw of money under § 1. Volunteer income tax 731-1(a)(1)(ii) is determined as if no COD income resulting from the reacquisition of the applicable debt instrument is deferred under § 108(i). Volunteer income tax See Rev. Volunteer income tax Rul. Volunteer income tax 92-97, 1992-2 C. Volunteer income tax B. Volunteer income tax 124, and Rev. Volunteer income tax Rul. Volunteer income tax 94-4, 1994-1 C. Volunteer income tax B. Volunteer income tax 195. Volunteer income tax A partner’s deferred § 752 amount is treated as a distribution of money to the partner under § 752 at the same time, and to the extent remaining in the same amount, as the partner recognizes the COD income deferred under § 108(i). Volunteer income tax . Volunteer income tax 10 Allocation of Deferred COD Income on S Corporation Indebtedness. Volunteer income tax For purposes of § 108(i), an S corporation’s COD income deferred under § 108(i) is shared pro rata only among those shareholders that are shareholders of the S corporation immediately before the reacquisition transaction. Volunteer income tax . Volunteer income tax 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. Volunteer income tax (1) In general. Volunteer income tax The Service and Treasury Department intend to issue regulations regarding the computation of a corporation’s earnings and profits with respect to COD income and OID deductions that are deferred under § 108(i). Volunteer income tax These regulations generally will provide that deferred COD income increases earnings and profits in the taxable year that it is realized and not in the taxable year or years that the deferred COD income is includible in gross income. Volunteer income tax OID deductions deferred under § 108(i) generally will decrease earnings and profits in the taxable year or years in which the deduction would be allowed without regard to § 108(i). Volunteer income tax COD income and OID deductions that are deferred increase or decrease adjusted current earnings under § 56(g)(4) in the taxable year or years that the income or deduction is includible or deductible in determining taxable income. Volunteer income tax See § 1. Volunteer income tax 56(g)-1(c)(1). Volunteer income tax (2) Exceptions for certain special status corporations. Volunteer income tax The Service and Treasury Department intend to issue regulations providing that in the case of regulated investment companies and real estate investment trusts, COD income deferred under § 108(i) generally increases earnings and profits in the taxable year or years in which the deferred COD income is includible in gross income and not in the year that the deferred COD income is realized. Volunteer income tax OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. Volunteer income tax . Volunteer income tax 12 Extension of Time to Make Election. Volunteer income tax Under § 301. Volunteer income tax 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. Volunteer income tax An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. Volunteer income tax Section 301. Volunteer income tax 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. Volunteer income tax SECTION 3. Volunteer income tax SCOPE This revenue procedure applies to taxpayers that realize COD income from a reacquisition after December 31, 2008, and before January 1, 2011, of an applicable debt instrument, as provided in § 108(i). Volunteer income tax SECTION 4. Volunteer income tax ELECTION PROCEDURES . Volunteer income tax 01 In General. Volunteer income tax (1) A taxpayer within the scope of this revenue procedure makes the § 108(i) election by— (a) Attaching a statement meeting the requirements of section 4. Volunteer income tax 05 of this revenue procedure to the taxpayer’s timely filed (including extensions) original federal income tax return for the taxable year in which the reacquisition of the applicable debt instrument occurs, and (b) If applicable, satisfying the additional requirements of section 4. Volunteer income tax 07, 4. Volunteer income tax 08, 4. Volunteer income tax 09, or 4. Volunteer income tax 10 of this revenue procedure. Volunteer income tax (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. Volunteer income tax 01(1)(a) of this revenue procedure for making the § 108(i) election. Volunteer income tax The rules that apply to an automatic extension under § 301. Volunteer income tax 9100-2(a) apply to this automatic extension. Volunteer income tax . Volunteer income tax 02 Section 108(i) Elections Made by Members of Consolidated Groups. Volunteer income tax The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. Volunteer income tax See § 1. Volunteer income tax 1502-77(a). Volunteer income tax . Volunteer income tax 03 Aggregation Rule. Volunteer income tax A taxpayer within the scope of this revenue procedure may treat two or more applicable debt instruments that are part of the same issue and that are reacquired during the same taxable year as one applicable debt instrument for purposes of this revenue procedure. Volunteer income tax A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. Volunteer income tax 03 if the owners and their ownership interests in the pass-through entity immediately prior to the reacquisition of each applicable debt instrument are not identical. Volunteer income tax . Volunteer income tax 04 Partial Elections. Volunteer income tax (1) A taxpayer within the scope of this revenue procedure may make an election for any portion of COD income realized from the reacquisition of any applicable debt instrument. Volunteer income tax Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument, the taxpayer may elect under § 108(i)(1) to defer only $40 of the $100 of COD income. Volunteer income tax The taxpayer may exclude from income the portion of COD income that the taxpayer does not elect to defer under § 108(i) ($60 in this example) under § 108(a)(1)(A), (B), (C), or (D), if applicable. Volunteer income tax (2) A taxpayer is not required to make an election for the same portion of COD income arising from each applicable debt instrument that it reacquires, but may make an election for different portions of COD income arising from different applicable debt instruments (whether or not part of the same issue). Volunteer income tax Thus, for example, if a taxpayer realizes $100 of COD income from the reacquisition of an applicable debt instrument (Instrument A) and $100 of COD income from the reacquisition of a different applicable debt instrument (Instrument B), the taxpayer may elect to defer all or a portion of the COD income associated with Instrument A and none or a different portion of the COD income associated with Instrument B. Volunteer income tax (3) A partnership that elects to defer less than all of the COD income realized from the reacquisition of an applicable debt instrument may determine, in any manner, the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Volunteer income tax Thus, for example, one partner’s deferred amount may be zero while another partner’s deferred amount may equal that partner’s COD income amount (or any portion thereof). Volunteer income tax A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. Volunteer income tax The provisions of this section 4. Volunteer income tax 04(3) apply for purposes of § 108(i) only and are not intended as an interpretation of or a change to existing law under § 704. Volunteer income tax . Volunteer income tax 05 Contents of Election Statement. Volunteer income tax A statement meets the requirements of this section 4. Volunteer income tax 05 if the statement— (1) Label. Volunteer income tax States “Section 108(i) Election” across the top. Volunteer income tax (2) Required information. Volunteer income tax Provides, for each applicable debt instrument the reacquisition of which generates COD income that the taxpayer is electing to defer under § 108(i)— (a) The name and taxpayer identification numbers, if any, of the issuer or issuers of the applicable debt instrument; (b) A general description of the applicable debt instrument (including the issue and maturity dates) and, in the case of any person other than a C corporation, a general description of the person’s trade or business to which the applicable debt instrument is connected; (c) A general description of the reacquisition transaction or transactions generating the COD income (including the date(s) of the transaction(s)); (d) The total amount of COD income for the applicable debt instrument that results from the reacquisition (in the case of a partnership, the aggregate of the partners’ COD income amounts) and a general description of the manner in which this amount is calculated; (e) The amount of COD income for the applicable debt instrument that the taxpayer is electing to defer under § 108(i); (f) In the case of a partnership, a list of partners that have a deferred amount, their identifying information and each partner’s deferred amount; and in the case of an S corporation, a list of shareholders with COD income deferred under § 108(i), their identifying information and each shareholder’s share of the S corporation’s deferred COD income; and (g) In cases in which a new debt instrument is issued or deemed issued in exchange for the applicable debt instrument (including exchanges under § 108(e)(4), § 108(i)(2)(B), and § 1. Volunteer income tax 1001-3), the issuer’s name, the issuer’s taxpayer identification number, if any, a general description of the new debt instrument and whether the new debt instrument has OID, and if the new debt instrument has OID, a schedule of the OID that the issuer expects to accrue each taxable year on the instrument and the amount of OID that the issuer expects to defer under § 108(i)(2) each taxable year. Volunteer income tax . Volunteer income tax 06 Supplemental information. Volunteer income tax The statement described in section 4. Volunteer income tax 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. Volunteer income tax 05(2)(e) of this revenue procedure that the taxpayer elects to defer under § 108(i) in the event the Service subsequently concludes that the taxpayer understated the amount of COD income described in section 4. Volunteer income tax 05(2)(d) of this revenue procedure. Volunteer income tax This additional amount of COD income the taxpayer elects to defer may be described as the entire additional COD income, or as a percentage of any additional COD income. Volunteer income tax If the taxpayer is a partnership, the partnership must specify each partner’s share of the partnership’s additional COD income that would be deferred (the partner’s additional deferred amount), which the partnership may describe for each partner as the partner’s entire share of the partnership’s additional COD income or as a percentage of the partner’s share of the partnership’s additional COD income. Volunteer income tax If the taxpayer is an S corporation, the S corporation must specify each shareholder’s share of the S corporation’s additional COD income that would be deferred, which the S corporation may describe for each shareholder as the shareholder’s entire share of the S corporation’s additional COD income or as a percentage of the shareholder’s share of the S corporation’s additional COD income. Volunteer income tax In the case of partnerships and S corporations, the additional COD income and the portion of additional COD income that would be deferred are allocated or determined as provided in sections 2. Volunteer income tax 08, 2. Volunteer income tax 10 and, if applicable, 4. Volunteer income tax 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. Volunteer income tax . Volunteer income tax 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. Volunteer income tax The rules of this section 4. Volunteer income tax 07 apply to partnerships other than partnerships described in section 4. Volunteer income tax 10 of this revenue procedure. Volunteer income tax (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). Volunteer income tax For the taxable year in which the § 108(i) election is made, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B), Partner’s Share of Income, Deductions, Credits, etc. Volunteer income tax , in the manner specified in the instructions to the forms, for each partner § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Volunteer income tax Partnerships reporting § 108(i) information on the 2008 Schedule K-1 (Form 1065 or Form 1065-B) must report for each partner on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made: (a) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 11 (“other income”) using code F for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (b) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii) or § 108(i)(5)(D)(i) or (ii), in box 13 (“other deductions”) using code W for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (c) The partner’s deferred amount that has not been included in income in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (d) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); (e) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B); and (f) The partner’s deferred § 752 amount remaining as of the end of the current taxable year, in box 20 (“other information”) using code X for Schedule K-1 (Form 1065) or in box 9 (“other”) using code U for Schedule K-1 (Form 1065-B). Volunteer income tax (2) Election information statement provided to partners. Volunteer income tax The partnership must attach to the Schedule K-1 (Form 1065 or Form 1065-B) provided to each partner for the taxable year in which the § 108(i) election is made a statement satisfying the requirements of this section 4. Volunteer income tax 07(2). Volunteer income tax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Volunteer income tax A statement meets the requirements of this section 4. Volunteer income tax 07(2) if the statement— (a) Label. Volunteer income tax States “Section 108(i) Election Information Statement for Partners” across the top. Volunteer income tax (b) Required information. Volunteer income tax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (i) The partner’s COD income amount, the partner’s deferred amount, and the partner’s included amount; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (v) The partner’s share of each liability of the partnership described in section 4. Volunteer income tax 05(2)(g) of this revenue procedure; (vi) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument; (vii) The partner’s share of the decrease in the partnership liability that results from the reacquisition of the applicable debt instrument that is treated as a distribution of money to the partner under § 752 in the current taxable year; (viii) The partner’s deferred § 752 amount as described in section 2. Volunteer income tax 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. Volunteer income tax 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. Volunteer income tax (c) If a partner fails to provide the written statement required by section 4. Volunteer income tax 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. Volunteer income tax 07(2)(b)(vii) and (viii) of this revenue procedure cannot be calculated because the partner did not provide the information necessary to report these amounts. Volunteer income tax (3) Partner reporting requirements. Volunteer income tax The partnership must make reasonable efforts prior to making a § 108(i) election to secure from each partner with a deferred amount for which it does not have the information necessary to compute the partner’s basis in its partnership interest (and its deferred § 752 amount as described in section 2. Volunteer income tax 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. Volunteer income tax Each partner with a deferred amount must provide this written statement to the partnership within 30 days of the date of request by the partnership. Volunteer income tax A partner’s failure to comply with this reporting requirement does not invalidate the partnership’s election under § 108(i) for an applicable debt instrument only if the partnership makes reasonable efforts before making the § 108(i) election to obtain the written statement from the partner and otherwise complies with the requirements of section 4 of this revenue procedure. Volunteer income tax If a partner provides its written statement under this section 4. Volunteer income tax 07(3) after the partnership has provided to the partner the Section 108(i) Election Information Statement for Partners, the partnership must provide to the partner a revised Section 108(i) Election Information Statement for Partners reporting the information required under section 4. Volunteer income tax 07(2)(b)(vii) and (viii) of this revenue procedure and report the partner’s deferred § 752 amount on the partner’s Schedule K-1 (Form 1065 or Form 1065-B) in subsequent taxable years. Volunteer income tax . Volunteer income tax 08 Additional Requirements for an S Corporation Making a § 108(i) Election. Volunteer income tax (1) Information filing on Schedule K-1 (Form 1120S). Volunteer income tax For the taxable year in which the § 108(i) election is made, the S corporation must report on the Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc. Volunteer income tax , in the manner specified in the instructions to the forms, for each shareholder § 108(i) information on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made. Volunteer income tax S corporations reporting § 108(i) information on the 2008 Schedule K-1 (Form 1120S) must report for each shareholder, on an aggregate basis for all applicable debt instruments for which a § 108(i) election is made, the shareholder’s share of the S corporation’s: (a) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1) or § 108(i)(5)(D)(i) or (ii), in box 10 (“other income”) using code E; (b) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii), or § 108(i)(5)(D)(i) or (ii), in box 12 (“other deductions”) using code S; (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years, in box 17 (“other information”) using code T; and (d) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years, in box 17 (“other information”) using code T. Volunteer income tax (2) Election information statement provided to shareholders. Volunteer income tax The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for the taxable year in which the § 108(i) election is made, a statement satisfying the requirements of this section 4. Volunteer income tax 08(2). Volunteer income tax The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Volunteer income tax A statement meets the requirements of this section 4. Volunteer income tax 08(2) if the statement— (a) Label. Volunteer income tax States “Section 108(i) Election Information Statement for Shareholders” across the top. Volunteer income tax (b) Required information. Volunteer income tax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income that the S corporation elects to defer under § 108(i); (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iii) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (iv) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (v) Additional COD income that would be deferred as described in section 4. Volunteer income tax 06 of this revenue procedure. Volunteer income tax . Volunteer income tax 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. Volunteer income tax The controlling domestic shareholder(s) (or common parent of the controlling domestic shareholder(s), if applicable) of a controlled foreign corporation or a noncontrolled § 902 corporation not otherwise required to file a return of tax may make the § 108(i) election on behalf of the foreign corporation by satisfying the requirements of § 1. Volunteer income tax 964-1(c)(3). Volunteer income tax Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. Volunteer income tax 05 of this revenue procedure and, if applicable, section 4. Volunteer income tax 06 of this revenue procedure, to its federal income tax return for the taxable year ending within or with the taxable year of the foreign corporation for which the § 108(i) election is made. Volunteer income tax . Volunteer income tax 10 Section 108(i) Elections Made By Certain Foreign Partnerships. Volunteer income tax The rules of this section 4. Volunteer income tax 10 apply to a foreign partnership making a § 108(i) election that is not otherwise required to file a federal partnership return (“nonfiling foreign partnership”). Volunteer income tax See § 1. Volunteer income tax 6031(a)-1(b). Volunteer income tax (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. Volunteer income tax 05 of this revenue procedure and, if applicable, section 4. Volunteer income tax 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. Volunteer income tax 6031(a)-1(b)(5) it files with the Service. Volunteer income tax In addition, a nonfiling foreign partnership must include in the information required in section 4. Volunteer income tax 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. Volunteer income tax S. Volunteer income tax persons (as defined in § 7701(a)(30)) and controlled foreign corporation(s) that are partners with deferred amounts in the nonfiling foreign partnership (“affected partners”). Volunteer income tax (2) The nonfiling foreign partnership must make the election, in accordance with § 1. Volunteer income tax 6031(a)-1(b)(5), by the date provided in section 4. Volunteer income tax 01(1)(a) of this revenue procedure, as if it had a filing obligation for the taxable year in which the reacquisition of the applicable debt instrument occurs. Volunteer income tax (3) For each affected partner, the partnership must file with the Service a Schedule K-1 (Form 1065) and report on the Schedule K-1 (Form 1065) for the affected partner as provided in section 4. Volunteer income tax 07(1) of this revenue procedure. Volunteer income tax Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Volunteer income tax The partnership must provide a copy of the respective Schedule K-1 (Form 1065) to each affected partner and must also attach to the Schedule K-1 (Form 1065) provided to each affected partner a statement satisfying the requirements of section 4. Volunteer income tax 07(2) of this revenue procedure by the date provided in section 4. Volunteer income tax 01(1)(a) of this revenue procedure. Volunteer income tax The partnership should not attach any statement described in section 4. Volunteer income tax 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. Volunteer income tax However, the partnership must retain the statements provided to the affected partners, and each affected partner must retain that partner’s statement, in their respective books and records. Volunteer income tax (4) The partnership and each affected partner must satisfy the requirements of section 4. Volunteer income tax 07(3) of this revenue procedure. Volunteer income tax . Volunteer income tax 11 Protective § 108(i) Election. Volunteer income tax (1) In general. Volunteer income tax A taxpayer may make a protective election under § 108(i) for an applicable debt instrument if the taxpayer concludes that a particular transaction does not result in the realization of COD income, reports the transaction on its federal income tax return in a manner consistent with the taxpayer’s conclusion, and would be within the scope of this revenue procedure if the taxpayer’s conclusion were incorrect. Volunteer income tax If the Service at any time determines the taxpayer’s conclusion that the particular transaction does not result in the realization of COD income is incorrect, the taxpayer’s protective election is treated as a valid, irrevocable election under § 108(i). Volunteer income tax Thus, if a taxpayer makes a protective election, the Service subsequently may require the taxpayer to report COD income deferred pursuant to the valid and irrevocable protective election even if the statute of limitations has expired for the year in which the COD income was realized and the protective election was made. Volunteer income tax A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. Volunteer income tax 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. Volunteer income tax 01(1)(a) of this revenue procedure. Volunteer income tax The taxpayer also must attach the election to its federal income tax return in each of the 8 or 9 taxable years, as applicable, following the taxable year of the election. Volunteer income tax A statement meets the requirements of this section 4. Volunteer income tax 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. Volunteer income tax 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. Volunteer income tax 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. Volunteer income tax 06 of this revenue procedure. Volunteer income tax (2) Statements provided to shareholders and partners. Volunteer income tax (a) For each applicable debt instrument, a partnership or S corporation that makes a protective election must attach to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) it provides each of its partners or shareholders, as the case may be, for the taxable year in which the protective election is made a statement containing the information described in section 4. Volunteer income tax 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the partner’s or shareholder’s share of the additional COD income that would be deferred as described in section 4. Volunteer income tax 11(1)(d) of this revenue procedure. Volunteer income tax (b) The partnership or S corporation should not attach the statements described in this section 4. Volunteer income tax 11(2) to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Volunteer income tax . Volunteer income tax 12 Election-Year Reporting by Tiered Pass-Through Entities. Volunteer income tax (1) A partnership required to file a U. Volunteer income tax S. Volunteer income tax partnership return other than under § 1. Volunteer income tax 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting its share of any items listed in section 4. Volunteer income tax 07(1) of this revenue procedure, must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Volunteer income tax 07(1)(a) through (d) of this revenue procedure). Volunteer income tax (2) If a partnership described in section 4. Volunteer income tax 12(1) of this revenue procedure receives a statement described in sections 4. Volunteer income tax 07(2) or 4. Volunteer income tax 10(3) of this revenue procedure or this section 4. Volunteer income tax 12(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership, including the information described in section 4. Volunteer income tax 07(2)(b)(x) of this revenue procedure. Volunteer income tax If an S corporation receives a statement described in sections 4. Volunteer income tax 07(2) or 4. Volunteer income tax 10(3) of this revenue procedure or this section 4. Volunteer income tax 12(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 4. Volunteer income tax 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. Volunteer income tax The partnership or S corporation must attach this statement or statements to the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) that it provides to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Volunteer income tax The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Volunteer income tax (3) A partnership that receives a statement described in this section 4 identifying its COD income amount with respect to an applicable debt instrument must allocate its COD income amount, without regard to § 108(i), to the partners in the partnership immediately before the reacquisition transaction in the manner in which the income would be included in the distributive shares of these partners under § 704 and the regulations thereunder, including § 1. Volunteer income tax 704-1(b)(2)(iii). Volunteer income tax The partnership may determine in any manner the portion, if any, of a partner’s COD income amount that is the partner’s deferred amount and the portion, if any, of a partner’s COD income amount that is the partner’s included amount. Volunteer income tax No partner’s deferred amount with respect to an applicable debt instrument may exceed its COD income amount with respect to the applicable debt instrument, and the aggregate of deferred amounts of its partners with respect to an applicable debt instrument must equal the partnership’s deferred amount with respect to the applicable debt instrument. Volunteer income tax The partnership allocates amounts described in section 4. Volunteer income tax 06 of this revenue procedure under this section 4. Volunteer income tax 12(3) as if the additional COD income was realized. Volunteer income tax (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. Volunteer income tax No further adjustment to the deferred § 752 amount is made to reflect the basis or other attributes of partners that are indirect partners in the partnership. Volunteer income tax (5) If an S corporation receives a statement described in this section 4 identifying its COD income amount, deferred amount, included amount or additional COD income that would be deferred with respect to an applicable debt instrument, these amounts are shared pro rata only among those shareholders that are shareholders in the S corporation immediately before the reacquisition transaction. Volunteer income tax (6) This paragraph 4. Volunteer income tax 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. Volunteer income tax S. Volunteer income tax Persons With Respect to Certain Foreign Partnerships, as defined in the instructions for Form 8865, if the foreign partnership, for which the Category 1 or Category 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items listed in section 4. Volunteer income tax 07(1) of this revenue procedure, or a statement described in sections 4. Volunteer income tax 07(2) or 4. Volunteer income tax 10(3) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Volunteer income tax (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Volunteer income tax 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 4. Volunteer income tax 12(6)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Volunteer income tax (b) A Category 2 filer must include its share of the information described in section 4. Volunteer income tax 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Volunteer income tax Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Volunteer income tax (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. Volunteer income tax 12(6)(a)(ii) and 4. Volunteer income tax 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Volunteer income tax However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Volunteer income tax (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. Volunteer income tax 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. Volunteer income tax 12(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 4. Volunteer income tax 12(1) and (2) of this revenue procedure. Volunteer income tax Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Volunteer income tax 12(6) of this revenue procedure. Volunteer income tax (8) The provisions of section 4. Volunteer income tax 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. Volunteer income tax 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. Volunteer income tax 11(1)(b) of this revenue procedure (an S corporation need not provide its shareholders with the date(s) of the transaction(s) that would constitute the reacquisition transaction or transactions) and the share of the partner or shareholder in the amounts described in section 4. Volunteer income tax 11(1)(d) of this revenue procedure. Volunteer income tax SECTION 5. Volunteer income tax REQUIRED INFORMATION STATEMENT . Volunteer income tax 01 Annual Information Statements. Volunteer income tax Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. Volunteer income tax 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. Volunteer income tax 02 of this revenue procedure to its federal income tax return for each taxable year beginning with the taxable year following the taxable year for which the taxpayer makes the election and ending with the first taxable year in which all items deferred under § 108(i) have been recognized. Volunteer income tax . Volunteer income tax 02 Contents of Statement. Volunteer income tax A statement meets the requirements of this section 5. Volunteer income tax 02 if the statement— (1) Label. Volunteer income tax States “Section 108(i) Information Statement” across the top; (2) Required information. Volunteer income tax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies— (a) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(1); (b) COD income deferred under § 108(i) that is included in income in the current taxable year under § 108(i)(5)(D), including a description and date of the acceleration event described in § 108(i)(5)(D); (c) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years (in the case of a partnership, the aggregate of the partners’ deferred amounts that have not been included in income in the current or prior taxable years, and in the case of an S corporation, the S corporation’s COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years); (d) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (e) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D); and (f) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Volunteer income tax (3) Election attached. Volunteer income tax Includes a copy of the election statement described in section 4. Volunteer income tax 05 of this revenue procedure. Volunteer income tax . Volunteer income tax 03 Additional Annual Reporting Requirements for Certain Partnerships. Volunteer income tax The rules of this section 5. Volunteer income tax 03 apply to partnerships other than partnerships described in section 5. Volunteer income tax 05 of this revenue procedure. Volunteer income tax (1) In general. Volunteer income tax A partnership that makes an election under § 108(i) (except for a protective election under section 4. Volunteer income tax 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Volunteer income tax 01 of this revenue procedure. Volunteer income tax In addition, for each taxable year in which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure, the partnership must report on the Schedule K-1 (Form 1065 or Form 1065-B) for each partner § 108(i) information in the manner described in section 4. Volunteer income tax 07(1) of this revenue procedure. Volunteer income tax (2) Annual information statements provided to partners. Volunteer income tax The partnership must attach to the Schedule K-1 (Form 1065) provided to each partner for each taxable year in which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure, a statement meeting the requirements of this section 5. Volunteer income tax 03(2). Volunteer income tax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner must retain that partner’s statement, in their respective books and records. Volunteer income tax A statement meets the requirements of this section 5. Volunteer income tax 03(2) if the statement— (a) Label. Volunteer income tax States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. Volunteer income tax (b) Required information. Volunteer income tax Clearly identifies for each applicable debt instrument to which a § 108(i) election applies— (i) The partner’s deferred amount that has not been included in income as of the end of the prior taxable year; (ii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(1); (iii) The partner’s deferred amount that the partner must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) The partner’s deferred amount that has not been included in income in the current or prior taxable years; (v) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); (viii) The partner’s share of the partnership’s OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years; and (ix) The partner’s deferred § 752 amount that is treated as a distribution of money to the partner under § 752 in the current taxable year and any remaining deferred § 752 amount. Volunteer income tax If a partner fails to provide the written statement required by section 4. Volunteer income tax 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. Volunteer income tax 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. Volunteer income tax . Volunteer income tax 04 Additional Annual Reporting Requirements for an S Corporation. Volunteer income tax (1) In general. Volunteer income tax An S corporation that makes an election under § 108(i) (except for a protective election under section 4. Volunteer income tax 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. Volunteer income tax 01 of this revenue procedure. Volunteer income tax In addition, for each taxable year in which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure, the S corporation must report on the Schedule K-1 (Form 1120S) for each shareholder § 108(i) information in the manner described in section 4. Volunteer income tax 08(1) of this revenue procedure. Volunteer income tax (2) Annual information statements provided to shareholders. Volunteer income tax The S corporation must attach to the Schedule K-1 (Form 1120S) provided to each shareholder for each taxable year in which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure a statement meeting the requirements of this section 5. Volunteer income tax 04(2). Volunteer income tax The S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each shareholder must retain that shareholder’s statement, in their respective books and records. Volunteer income tax A statement meets the requirements of this section 5. Volunteer income tax 04(2) if the statement— (a) Label. Volunteer income tax States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. Volunteer income tax Clearly identifies for each applicable debt instrument to which an election under § 108(i) applies, the shareholder’s share of the S corporation’s— (i) COD income deferred under § 108(i) that has not been included in income as of the end of the prior taxable year; (ii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(1); (iii) COD income deferred under § 108(i) that the shareholder must include in income in the current taxable year under § 108(i)(5)(D)(i) or (ii); (iv) COD income deferred under § 108(i) that has not been included in income in the current or prior taxable years; (v) OID deduction deferred under § 108(i)(2)(A)(i) in the current taxable year; (vi) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(2)(A)(ii); (vii) OID deduction deferred under § 108(i)(2)(A)(i) that is allowable as a deduction in the current taxable year under § 108(i)(5)(D)(i) or (ii); and (viii) OID deduction deferred under § 108(i)(2)(A)(i) that has not been deducted in the current or prior taxable years. Volunteer income tax . Volunteer income tax 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. Volunteer income tax (1) The rules of this section 5. Volunteer income tax 05 apply to nonfiling foreign partnerships. Volunteer income tax (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. Volunteer income tax 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. Volunteer income tax 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. Volunteer income tax 01 of this revenue procedure. Volunteer income tax (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. Volunteer income tax 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. Volunteer income tax (4) For each taxable year in which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure, the nonfiling foreign partnership must provide each affected partner a Schedule K-1 (Form 1065) reporting § 108(i) information in the manner described in section 4. Volunteer income tax 07(1) of this revenue procedure. Volunteer income tax Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). Volunteer income tax The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. Volunteer income tax 6031(b)-1T(b). Volunteer income tax The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. Volunteer income tax 05(2) of this revenue procedure. Volunteer income tax (5) For each taxable year for which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure, the nonfiling foreign partnership must attach to each affected partner’s Schedule K-1 (Form 1065) a statement meeting the requirements of section 5. Volunteer income tax 03(2) of this revenue procedure. Volunteer income tax The partnership should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain the statements, and each partner must retain that partner’s statement, in their respective books and records. Volunteer income tax . Volunteer income tax 06 Information Statements Made on Behalf of Certain Foreign Corporations. Volunteer income tax Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. Volunteer income tax 02 of this revenue procedure to the shareholder’s federal income tax return for each taxable year for which a statement is required under section 5. Volunteer income tax 01 of this revenue procedure. Volunteer income tax . Volunteer income tax 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. Volunteer income tax (1) A partnership required to file a U. Volunteer income tax S. Volunteer income tax partnership return other than under § 1. Volunteer income tax 6031(a)-1(b)(5), or an S corporation, that receives a Schedule K-1 (Form 1065 or Form 1065-B) described in the second sentence of section 5. Volunteer income tax 03(1) of this revenue procedure reflecting its share of any § 108(i) information must report on the Schedules K-1 (Form 1065, Form 1065-B, or Form 1120S) to its partners or shareholders, as the case may be, each partner’s or shareholder’s share of those items (an S corporation only reports to its shareholders the items described in section 4. Volunteer income tax 07(1)(a) through (d) of this revenue procedure). Volunteer income tax (2) If a partnership described in section 5. Volunteer income tax 07(1) of this revenue procedure receives a statement described in sections 5. Volunteer income tax 03(2) or 5. Volunteer income tax 05(5) of this revenue procedure or this section 5. Volunteer income tax 07(2), it must provide each of its partners a statement containing the partner’s share of each of the items listed on each statement received by the partnership. Volunteer income tax If an S corporation receives a statement described in sections 5. Volunteer income tax 03(2) or 5. Volunteer income tax 05(5) of this revenue procedure or this section 5. Volunteer income tax 07(2), it must provide each of its shareholders a statement containing the shareholder’s share of each of the items listed on each statement received by the S corporation that are described in section 5. Volunteer income tax 03(2)(b)(i) through (viii) of this revenue procedure. Volunteer income tax The partnership or S corporation must attach the statement or statements to the Schedule K-1 (Form 1065 or Form 1065-B) or Schedule K-1 (Form 1120S) that is provided to each of its partners or shareholders, as the case may be, for the taxable year of the partnership or S corporation. Volunteer income tax The partnership or S corporation should not attach these statements to the Schedules K-1 that are filed with the Service, but must retain these statements, and each partner and shareholder must retain that partner’s or shareholder’s statement, in their respective books and records. Volunteer income tax (3) This paragraph 5. Volunteer income tax 07(3) provides the rules for persons described in section 4. Volunteer income tax 12(6) of this revenue procedure if the foreign partnership, for which the Category 1 or 2 filer has a filing requirement, receives a Schedule K-1 (Form 1065 or Form 1065-B) reflecting the partnership’s share of any items described in the second sentence of section 5. Volunteer income tax 03(1) of this revenue procedure, or a statement described in sections 5. Volunteer income tax 03(2) or 5. Volunteer income tax 05(5) of this revenue procedure (because the foreign partnership owns an interest directly or indirectly in another partnership in which an election was made under § 108(i) with respect to that foreign partnership’s distributive share from the other entity). Volunteer income tax (a) For each partner for whom the Category 1 filer is required to complete a Schedule K-1 (Form 8865) (which includes the Category 1 filer itself), the Category 1 filer must: (i) Include the information described in section 4. Volunteer income tax 07(1) of this revenue procedure in the Schedule K-1 (Form 8865) that the Category 1 filer files with the Service and completes for the partner; (ii) Produce a statement containing the partner’s share of the items listed on each statement received by the partnership; and (iii) Attach the statement described in section 5. Volunteer income tax 07(3)(a)(ii) of this revenue procedure to each Schedule K-1 (Form 8865) that it is required to provide to a partner of the foreign partnership. Volunteer income tax (b) A Category 2 filer must include its share of the information described in section 4. Volunteer income tax 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. Volunteer income tax Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. Volunteer income tax (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. Volunteer income tax 07(3)(a)(ii) and 5. Volunteer income tax 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. Volunteer income tax However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. Volunteer income tax (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. Volunteer income tax 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. Volunteer income tax 07(1) of this revenue procedure must recognize items deferred under § 108(i), the partnership or S corporation must report these items on the Schedule K-1 (Form 1065, Form 1065-B, or Form 1120S) and statements provided to the partner or shareholder pursuant to section 5. Volunteer income tax 07(1) and (2) of this revenue procedure. Volunteer income tax Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. Volunteer income tax 12(6) of this revenue procedure. Volunteer income tax SECTION 6. Volunteer income tax EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. Volunteer income tax SECTION 7. Volunteer income tax TRANSITION RULE . Volunteer income tax 01 Noncomplying Election. Volunteer income tax Except as otherwise provided in this section 7. Volunteer income tax 01, the Service will treat a § 108(i) election as effective if a taxpayer files an election with the taxpayer’s federal income tax return filed on or before September 16, 2009, using any reasonable procedure to make the election. Volunteer income tax However, an election that does not comply with section 4 of this revenue procedure will not be effective unless the taxpayer on or before November 16, 2009, files an amended return for the taxable year of the election and complies with the requirements of section 4 of this revenue procedure. Volunteer income tax . Volunteer income tax 02 Modification of Election. Volunteer income tax A taxpayer that files a § 108(i) election on or before September 16, 2009, may modify that election by filing an amended return on or before November 16, 2009 (for example, to modify the amount of COD income the taxpayer elects to defer). Volunteer income tax To be effective, a modification of an election described in the preceding sentence must satisfy the requirements for an election described in section 4 of this revenue procedure. Volunteer income tax . Volunteer income tax 03 Notations. Volunteer income tax A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. Volunteer income tax A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. Volunteer income tax See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. Volunteer income tax SECTION 8. Volunteer income tax PAPERWORK REDUCTION ACT The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U. Volunteer income tax S. Volunteer income tax C. Volunteer income tax 3507) under control number 1545-2147. Volunteer income tax An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Volunteer income tax The collection of information in this revenue procedure is in sections 4, 5 and 7. Volunteer income tax This information is required to determine the amount of income and deductions a taxpayer elects to defer and to track those amounts until the taxpayer has reported all deferred income and deductions on the taxpayer’s tax return. Volunteer income tax This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. Volunteer income tax The collection of information is required to obtain a benefit. Volunteer income tax The likely respondents are C corporations, shareholders of S corporations, partners of partnerships, and other individuals engaged in a trade or business, that reacquire applicable debt instruments in 2009 or 2010. Volunteer income tax The estimated total annual reporting burden is 300,000 hours. Volunteer income tax The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. Volunteer income tax The estimated number of respondents is 50,000. Volunteer income tax Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Volunteer income tax Generally, tax returns and return information are confidential, as required by § 6103. Volunteer income tax DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. Volunteer income tax Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). Volunteer income tax For further information regarding this revenue procedure, contact Megan A. Volunteer income tax Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. Volunteer income tax Blanchard at (202) 622-3950 for questions involving OID, Ronald M. Volunteer income tax Gootzeit at (202) 622-3860 for questions involving foreign entities, Robert Rhyne at (202) 622-7790 for questions involving earnings and profits and consolidated groups, and Craig Wojay at (202) 622-4920 for questions on § 108(i) generally (not toll-free calls). Volunteer income tax Prev  Up  Next   Home   More Internal Revenue Bulletins
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Understanding Your CP210/CP220 Notice

We made change(s) for the tax year specified on the notice.


What you need to do

  • Read your notice carefully - it explains the changes we made to your tax account.
  • If you agree, make your payment (if you have a balance) by your due date. Go to the payments page to find out more about your payment options.
  • If you disagree, contact us at the toll-free number on the top right corner of your notice.
  • Correct the copy of your tax return that you kept for your records.

You may want to


Answers to Common Questions

Q. The notice says "Based on the information you provided, we changed your 200X Form XXXX to correct your...", but I don't remember sending any change to IRS. How can I find out what IRS received to initiate this change?

A. Please contact us at the number listed on the top right corner of your notice for specific information about your tax return. 

Q. What do I say when I call the IRS?

A. Mention that you received a CP210 or CP 220 notice and you need to review your account with a customer service representative. Be sure to have a copy of your notice and your tax return before you call. 

Q. What should I do if I disagree with the changes you made?

A. If you disagree, contact us at the toll-free number listed on the top right corner of your notice. 

Q. What happens if I can't pay the full amount I owe?

A. See if you may be able to set up a payment plan through our Online Payment Agreement Application

Q. Am I charged interest on the money I owe?

A. If you don't full pay the amount you owe by the date on your notice, interest will accrue on the unpaid balance after that date. 

Q. Will I receive a penalty if I can't pay the full amount?

A. Yes, you'll receive a late payment penalty if you did not pay the tax in full. You can contact us at the number listed on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty. 

Q. What if I'm due a refund and haven't received it within 2-3 weeks?

A. If you don't owe other taxes or debts we're required to collect, such as child support, and 3 weeks have lapsed, call us at the toll-free number listed on the top right corner of your notice. 

Q. Will I receive information about the interest that I need to report on my next tax return?

A. If you were paid $10 or more in interest, you'll receive a Form 1099-INT from IRS by January 31st of next year. Please note, even if the interest amount paid to you is less than $10, you must report this amount on your tax return. 

Q. What if I need to make another correction to my account?

A. You'll need to file an amended return. 

Q. What if I have tried to get answers and after contacting IRS several times have not been successful?

A. Call Taxpayer Advocate at 1-877-777-4778 or for TTY/TDD 1-800-829-4059. 

Q. What if I think I’m a victim of identity theft?

A. Please contact us at the number listed on the top right corner of your notice. Refer to the IRS Identity Theft resource page for more information.


Tips for next year

  • Consider filing your taxes electronically in the future if you did not file this return electronically. Filing online can help you avoid mistakes. Learn more about e-file.

 

 

Page Last Reviewed or Updated: 27-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Volunteer Income Tax

Volunteer income tax Publication 971 - Additional Material Table of Contents How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Volunteer income tax Questions & AnswersThis section answers questions commonly asked by taxpayers about innocent spouse relief. Volunteer income tax . Volunteer income tax What is joint and several liability? . Volunteer income tax How can I get relief from joint and several liability? . Volunteer income tax What are the rules for innocent spouse relief? . Volunteer income tax What are erroneous items? . Volunteer income tax What is an understated tax? . Volunteer income tax Will I qualify for innocent spouse relief in any situation where there is an understated tax? . Volunteer income tax What are the rules for separation of liability relief? . Volunteer income tax Why would a request for separation of liability relief be denied? . Volunteer income tax What are the rules for equitable relief? . Volunteer income tax How do state community property laws affect my ability to qualify for relief? . Volunteer income tax How do I request relief? . Volunteer income tax When should I file Form 8857? . Volunteer income tax Where should I file Form 8857? . Volunteer income tax I am currently undergoing an examination of my return. Volunteer income tax How do I request innocent spouse relief? . Volunteer income tax What if the IRS has given me notice that it will levy my account for the tax liability and I decide to request relief? . Volunteer income tax What is injured spouse relief? . Volunteer income tax What is joint and several liability? When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. Volunteer income tax This is called joint and several liability. Volunteer income tax Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to the income, deductions, or credits of your spouse or former spouse. Volunteer income tax You remain jointly and severally liable for taxes, and the IRS still can collect from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax. Volunteer income tax There are three types of relief for filers of joint returns: “innocent spouse relief,” “separation of liability relief,” and “equitable relief. Volunteer income tax ” Each type has different requirements. Volunteer income tax They are explained separately below. Volunteer income tax To qualify for innocent spouse relief, you must meet all of the following conditions. Volunteer income tax You must have filed a joint return which has an understated tax. Volunteer income tax The understated tax must be due to erroneous items of your spouse (or former spouse). Volunteer income tax You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Volunteer income tax Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Volunteer income tax You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Volunteer income tax You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Volunteer income tax For example, you reported total tax on your 2008 return of $2,500. Volunteer income tax IRS determined in an audit of your 2008 return that the total tax should be $3,000. Volunteer income tax You have a $500 understated tax. Volunteer income tax No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax How can I get relief from joint and several liability? There are three types of relief for filers of joint returns: “innocent spouse relief,” “separation of liability relief,” and “equitable relief. Volunteer income tax ” Each type has different requirements. Volunteer income tax They are explained separately below. Volunteer income tax To qualify for innocent spouse relief, you must meet all of the following conditions. Volunteer income tax You must have filed a joint return which has an understated tax. Volunteer income tax The understated tax must be due to erroneous items of your spouse (or former spouse). Volunteer income tax You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Volunteer income tax Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Volunteer income tax You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Volunteer income tax You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Volunteer income tax For example, you reported total tax on your 2008 return of $2,500. Volunteer income tax IRS determined in an audit of your 2008 return that the total tax should be $3,000. Volunteer income tax You have a $500 understated tax. Volunteer income tax No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax What are the rules for innocent spouse relief? To qualify for innocent spouse relief, you must meet all of the following conditions. Volunteer income tax You must have filed a joint return which has an understated tax. Volunteer income tax The understated tax must be due to erroneous items of your spouse (or former spouse). Volunteer income tax You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax. Volunteer income tax Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax. Volunteer income tax You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Volunteer income tax You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Volunteer income tax For example, you reported total tax on your 2008 return of $2,500. Volunteer income tax IRS determined in an audit of your 2008 return that the total tax should be $3,000. Volunteer income tax You have a $500 understated tax. Volunteer income tax No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax What are “erroneous items”? Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return. Volunteer income tax You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Volunteer income tax For example, you reported total tax on your 2008 return of $2,500. Volunteer income tax IRS determined in an audit of your 2008 return that the total tax should be $3,000. Volunteer income tax You have a $500 understated tax. Volunteer income tax No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax What is an “understated tax”? You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. Volunteer income tax For example, you reported total tax on your 2008 return of $2,500. Volunteer income tax IRS determined in an audit of your 2008 return that the total tax should be $3,000. Volunteer income tax You have a $500 understated tax. Volunteer income tax No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax Will I qualify for innocent spouse relief in any situation where there is an understated tax? No. Volunteer income tax There are many situations in which you may owe tax that is related to your spouse (or former spouse), but not be eligible for innocent spouse relief. Volunteer income tax For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. Volunteer income tax You are not eligible for innocent spouse relief because you have knowledge of the understated tax. Volunteer income tax Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax What are the rules for separation of liability relief? Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse (or former spouse). Volunteer income tax The understated tax allocated to you is generally the amount you are responsible for. Volunteer income tax To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Volunteer income tax You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Volunteer income tax (Under this rule, you are no longer married if you are widowed. Volunteer income tax ) You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857. Volunteer income tax In addition to the above requirements, you must file a Form 8857 within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998. Volunteer income tax Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax Why would a request for separation of liability relief be denied? Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations. Volunteer income tax The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Volunteer income tax The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse (or former spouse). Volunteer income tax Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Volunteer income tax Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax What are the rules for equitable relief? Equitable relief is only available if you meet all of the following conditions. Volunteer income tax You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Volunteer income tax You have an understated tax or underpaid tax. Volunteer income tax See Note later. Volunteer income tax You did not pay the tax. Volunteer income tax However, see Refunds , earlier, for exceptions. Volunteer income tax The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances. Volunteer income tax You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Volunteer income tax Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Volunteer income tax You did not file or fail to file your return with the intent to commit fraud. Volunteer income tax The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. Volunteer income tax For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief , earlier. Volunteer income tax You timely file Form 8857 as explained earlier in Exception for equitable relief under How To Request Relief. Volunteer income tax Note. Volunteer income tax Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. Volunteer income tax (An underpaid tax is tax that is properly shown on the return, but has not been paid. Volunteer income tax ) Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or resume collecting from you. Volunteer income tax The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days. Volunteer income tax See Publication 594 for more information. Volunteer income tax Injured spouse relief is different from innocent spouse relief. Volunteer income tax When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. Volunteer income tax The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. Volunteer income tax You are considered an injured spouse if: You are not legally obligated to pay the past-due amount, and You meet any of the following conditions: You made and reported tax payments (such as federal income tax withholding or estimated tax payments). Volunteer income tax You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit. Volunteer income tax You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax. Volunteer income tax Note. Volunteer income tax If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies. Volunteer income tax . Volunteer income tax How do state community property laws affect my ability to qualify for relief? Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Volunteer income tax Generally, community property laws require you to allocate community income and expenses equally between both spouses. Volunteer income tax However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Volunteer income tax      File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. Volunteer income tax You must file an additional Form 8857 if you are requesting relief for more than three years. Volunteer income tax If you are requesting innocent spouse relief or separation of liability relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. Volunteer income tax If you are requesting equitable relief, see Exception for equitable relief. Volunteer income tax under How To Request Relief, earlier, for when to file Form 8857. Volunteer income tax If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857. Volunteer income tax Use the address or fax number shown in the Instructions for Form 8857. Volunteer income tax File Form 8857 at the address or send it to the fax number shown in the Instructions for Form 8857. Volunteer income tax Do not file it with the employee assigned to examine your return. Volunteer income tax Generally, the IRS has 10 years to collect an amount you owe. Volunteer income tax This is the collection statute of limitations. Volunteer income tax By law, the IRS is not allowed to collect from you after the 10-year period ends. Volunteer income tax If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. Volunteer income tax But interest and penalties continue to accrue. Volunteer income tax Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. Volunteer income tax This includes the time the Tax Court is considering your request. Volunteer income tax After your case is resolved, the IRS can begin or