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1040 Amended Tax Form

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1040 Amended Tax Form

1040 amended tax form Internal Revenue Bulletin:  2009-36  September 8, 2009  Rev. 1040 amended tax form Proc. 1040 amended tax form 2009-37 Table of Contents SECTION 1. 1040 amended tax form PURPOSE SECTION 2. 1040 amended tax form BACKGROUND SECTION 3. 1040 amended tax form SCOPE SECTION 4. 1040 amended tax form ELECTION PROCEDURES SECTION 5. 1040 amended tax form REQUIRED INFORMATION STATEMENT SECTION 6. 1040 amended tax form EFFECTIVE DATE SECTION 7. 1040 amended tax form TRANSITION RULE SECTION 8. 1040 amended tax form PAPERWORK REDUCTION ACT DRAFTING INFORMATION SECTION 1. 1040 amended tax form PURPOSE . 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 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. 1040 amended tax form This revenue procedure describes the time and manner of providing this additional information. 1040 amended tax form . 1040 amended tax form 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. 1040 amended tax form Taxpayers should be aware that these regulations may be retroactive. 1040 amended tax form See § 7805(b)(2). 1040 amended tax form This revenue procedure may be modified to provide procedures consistent with additional guidance. 1040 amended tax form SECTION 2. 1040 amended tax form BACKGROUND . 1040 amended tax form 01 Section 108(i), Generally. 1040 amended tax form Section 108(i) was added to the Code by § 1231 of the American Recovery and Reinvestment Tax Act of 2009, Pub. 1040 amended tax form L. 1040 amended tax form No. 1040 amended tax form 111-5, 123 Stat. 1040 amended tax form 338. 1040 amended tax form 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. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form 1273-1(d) of the Income Tax Regulations. 1040 amended tax form The OID deferral rule in § 108(i)(2) applies at the entity level for a pass-through entity. 1040 amended tax form For example, a partnership (and therefore its partners) may not deduct currently the OID described in § 108(i)(2)(A)(i). 1040 amended tax form 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). 1040 amended tax form See § 108(i)(5)(D). 1040 amended tax form 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. 1040 amended tax form Section 108(i)(5)(D)(ii). 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 02 Applicable Debt Instrument. 1040 amended tax form 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. 1040 amended tax form 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). 1040 amended tax form Section 108(i)(3)(B). 1040 amended tax form For purposes of § 108(i), in the case of an intercompany obligation (as defined in § 1. 1040 amended tax form 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. 1040 amended tax form 1502-13(g)(5). 1040 amended tax form . 1040 amended tax form 03 Reacquisition. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form See § 108(i)(4)(B). 1040 amended tax form The term “acquisition” also includes an indirect acquisition within the meaning of § 1. 1040 amended tax form 108-2(c) if a direct acquisition of the debt instrument would qualify for an election under § 108(i). 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 04 General Requirements for the Section 108(i) Election. 1040 amended tax form 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. 1040 amended tax form (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. 1040 amended tax form ) The statement must include the amount of income to which § 108(i)(1) applies and other information the Service may prescribe. 1040 amended tax form Once made, a § 108(i) election is irrevocable and, except as provided in section 7 of this revenue procedure, may not be modified. 1040 amended tax form . 1040 amended tax form 05 Section 108(i) Elections Made by Pass-through Entities. 1040 amended tax form 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. 1040 amended tax form Section 108(i)(5)(B)(iii). 1040 amended tax form . 1040 amended tax form 06 Additional Information on Subsequent Years’ Returns. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 07 Exclusivity. 1040 amended tax form 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). 1040 amended tax form . 1040 amended tax form 08 Allocation of Deferred COD Income on Partnership Indebtedness. 1040 amended tax form Section 4. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 704-1(b)(2)(iii). 1040 amended tax form Each partner’s share of this COD income is the partner’s COD income amount (“COD income amount”). 1040 amended tax form The partner’s COD income amount that is deferred under § 108(i) is the partner’s deferred amount (“deferred amount”). 1040 amended tax form 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”). 1040 amended tax form . 1040 amended tax form 09 Partner’s Deferred § 752 Amount. 1040 amended tax form 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”). 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form 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). 1040 amended tax form See Rev. 1040 amended tax form Rul. 1040 amended tax form 92-97, 1992-2 C. 1040 amended tax form B. 1040 amended tax form 124, and Rev. 1040 amended tax form Rul. 1040 amended tax form 94-4, 1994-1 C. 1040 amended tax form B. 1040 amended tax form 195. 1040 amended tax form 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). 1040 amended tax form . 1040 amended tax form 10 Allocation of Deferred COD Income on S Corporation Indebtedness. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 11 Deferred COD Income, Earnings and Profits, and Alternative Minimum Taxable Income. 1040 amended tax form (1) In general. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form See § 1. 1040 amended tax form 56(g)-1(c)(1). 1040 amended tax form (2) Exceptions for certain special status corporations. 1040 amended tax form 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. 1040 amended tax form OID deductions deferred under § 108(i) generally decrease earnings and profits in the taxable year or years that the deferred OID deductions are deductible. 1040 amended tax form . 1040 amended tax form 12 Extension of Time to Make Election. 1040 amended tax form Under § 301. 1040 amended tax form 9100-1 of the Procedure and Administration Regulations, the Service may grant an extension of time to make a regulatory election. 1040 amended tax form An election is a regulatory election if the due date is prescribed by regulation or other published guidance of general applicability. 1040 amended tax form Section 301. 1040 amended tax form 9100-2(a) provides an automatic 12-month extension from the due date for making certain regulatory elections. 1040 amended tax form SECTION 3. 1040 amended tax form 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). 1040 amended tax form SECTION 4. 1040 amended tax form ELECTION PROCEDURES . 1040 amended tax form 01 In General. 1040 amended tax form (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. 1040 amended tax form 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. 1040 amended tax form 07, 4. 1040 amended tax form 08, 4. 1040 amended tax form 09, or 4. 1040 amended tax form 10 of this revenue procedure. 1040 amended tax form (2) The Service grants an automatic extension of 12 months from the due date prescribed in section 4. 1040 amended tax form 01(1)(a) of this revenue procedure for making the § 108(i) election. 1040 amended tax form The rules that apply to an automatic extension under § 301. 1040 amended tax form 9100-2(a) apply to this automatic extension. 1040 amended tax form . 1040 amended tax form 02 Section 108(i) Elections Made by Members of Consolidated Groups. 1040 amended tax form The common parent of a consolidated group makes the § 108(i) election on behalf of all members of the group. 1040 amended tax form See § 1. 1040 amended tax form 1502-77(a). 1040 amended tax form . 1040 amended tax form 03 Aggregation Rule. 1040 amended tax form 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. 1040 amended tax form A pass-through entity may not treat two or more applicable debt instruments as one applicable debt instrument under this section 4. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 04 Partial Elections. 1040 amended tax form (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. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form (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). 1040 amended tax form 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. 1040 amended tax form (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. 1040 amended tax form 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). 1040 amended tax form A partner may exclude from income the partner’s included amount under § 108(a)(1)(A), (B), (C), or (D), if applicable. 1040 amended tax form The provisions of this section 4. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 05 Contents of Election Statement. 1040 amended tax form A statement meets the requirements of this section 4. 1040 amended tax form 05 if the statement— (1) Label. 1040 amended tax form States “Section 108(i) Election” across the top. 1040 amended tax form (2) Required information. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 06 Supplemental information. 1040 amended tax form The statement described in section 4. 1040 amended tax form 05 of this revenue procedure may specify for each applicable debt instrument an amount greater than the amount identified in section 4. 1040 amended tax form 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. 1040 amended tax form 05(2)(d) of this revenue procedure. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 08, 2. 1040 amended tax form 10 and, if applicable, 4. 1040 amended tax form 04(3) of this revenue procedure, respectively, as if the additional COD income was realized. 1040 amended tax form . 1040 amended tax form 07 Additional Requirements for Certain Partnerships Making a § 108(i) Election. 1040 amended tax form The rules of this section 4. 1040 amended tax form 07 apply to partnerships other than partnerships described in section 4. 1040 amended tax form 10 of this revenue procedure. 1040 amended tax form (1) Information filing on Schedule K-1 (Form 1065 and Form 1065-B). 1040 amended tax form 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. 1040 amended tax form , 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. 1040 amended tax form 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). 1040 amended tax form (2) Election information statement provided to partners. 1040 amended tax form 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. 1040 amended tax form 07(2). 1040 amended tax form 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. 1040 amended tax form A statement meets the requirements of this section 4. 1040 amended tax form 07(2) if the statement— (a) Label. 1040 amended tax form States “Section 108(i) Election Information Statement for Partners” across the top. 1040 amended tax form (b) Required information. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 09 of this revenue procedure; (ix) The partner’s additional deferred amount as described in section 4. 1040 amended tax form 06 of this revenue procedure; and (x) The date of the reacquisition transaction generating the COD income. 1040 amended tax form (c) If a partner fails to provide the written statement required by section 4. 1040 amended tax form 07(3) of this revenue procedure, the partnership must indicate that the amounts described in section 4. 1040 amended tax form 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. 1040 amended tax form (3) Partner reporting requirements. 1040 amended tax form 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. 1040 amended tax form 09 of this revenue procedure) a written statement signed under penalties of perjury that includes this information. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form If a partner provides its written statement under this section 4. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 08 Additional Requirements for an S Corporation Making a § 108(i) Election. 1040 amended tax form (1) Information filing on Schedule K-1 (Form 1120S). 1040 amended tax form 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. 1040 amended tax form , 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. 1040 amended tax form 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. 1040 amended tax form (2) Election information statement provided to shareholders. 1040 amended tax form 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. 1040 amended tax form 08(2). 1040 amended tax form 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. 1040 amended tax form A statement meets the requirements of this section 4. 1040 amended tax form 08(2) if the statement— (a) Label. 1040 amended tax form States “Section 108(i) Election Information Statement for Shareholders” across the top. 1040 amended tax form (b) Required information. 1040 amended tax form 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. 1040 amended tax form 06 of this revenue procedure. 1040 amended tax form . 1040 amended tax form 09 Section 108(i) Elections Made on Behalf of Certain Foreign Corporations. 1040 amended tax form 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. 1040 amended tax form 964-1(c)(3). 1040 amended tax form Each controlling domestic shareholder must attach a statement identifying the foreign corporation and satisfying the requirements of section 4. 1040 amended tax form 05 of this revenue procedure and, if applicable, section 4. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 10 Section 108(i) Elections Made By Certain Foreign Partnerships. 1040 amended tax form The rules of this section 4. 1040 amended tax form 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”). 1040 amended tax form See § 1. 1040 amended tax form 6031(a)-1(b). 1040 amended tax form (1) A nonfiling foreign partnership making the election must attach a statement satisfying the requirements of section 4. 1040 amended tax form 05 of this revenue procedure and, if applicable, section 4. 1040 amended tax form 06 of this revenue procedure, to a partnership return satisfying the requirements of § 1. 1040 amended tax form 6031(a)-1(b)(5) it files with the Service. 1040 amended tax form In addition, a nonfiling foreign partnership must include in the information required in section 4. 1040 amended tax form 05(2)(d) and (e) of this revenue procedure the aggregate amounts for all partners as well as the aggregate amounts for all U. 1040 amended tax form S. 1040 amended tax form 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”). 1040 amended tax form (2) The nonfiling foreign partnership must make the election, in accordance with § 1. 1040 amended tax form 6031(a)-1(b)(5), by the date provided in section 4. 1040 amended tax form 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. 1040 amended tax form (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. 1040 amended tax form 07(1) of this revenue procedure. 1040 amended tax form Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 1040 amended tax form 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. 1040 amended tax form 07(2) of this revenue procedure by the date provided in section 4. 1040 amended tax form 01(1)(a) of this revenue procedure. 1040 amended tax form The partnership should not attach any statement described in section 4. 1040 amended tax form 07(2) of this revenue procedure to the Schedules K-1 that are filed with the Service. 1040 amended tax form 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. 1040 amended tax form (4) The partnership and each affected partner must satisfy the requirements of section 4. 1040 amended tax form 07(3) of this revenue procedure. 1040 amended tax form . 1040 amended tax form 11 Protective § 108(i) Election. 1040 amended tax form (1) In general. 1040 amended tax form 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. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form A taxpayer makes a protective election by attaching a statement satisfying the requirements of this section 4. 1040 amended tax form 11(1) to the taxpayer’s original federal income tax return within the period described in section 4. 1040 amended tax form 01(1)(a) of this revenue procedure. 1040 amended tax form 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. 1040 amended tax form A statement meets the requirements of this section 4. 1040 amended tax form 11(1) if the statement— (a) States “Section 108(i) Protective Election” across the top; (b) Provides the information required under section 4. 1040 amended tax form 05(2)(a), (b), and (c) of this revenue procedure; (c) Provides that the amounts described in sections 4. 1040 amended tax form 05(2)(d) and (e) of this revenue procedure are zero; and (d) Provides the information described in section 4. 1040 amended tax form 06 of this revenue procedure. 1040 amended tax form (2) Statements provided to shareholders and partners. 1040 amended tax form (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. 1040 amended tax form 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. 1040 amended tax form 11(1)(d) of this revenue procedure. 1040 amended tax form (b) The partnership or S corporation should not attach the statements described in this section 4. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 12 Election-Year Reporting by Tiered Pass-Through Entities. 1040 amended tax form (1) A partnership required to file a U. 1040 amended tax form S. 1040 amended tax form partnership return other than under § 1. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 07(1)(a) through (d) of this revenue procedure). 1040 amended tax form (2) If a partnership described in section 4. 1040 amended tax form 12(1) of this revenue procedure receives a statement described in sections 4. 1040 amended tax form 07(2) or 4. 1040 amended tax form 10(3) of this revenue procedure or this section 4. 1040 amended tax form 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. 1040 amended tax form 07(2)(b)(x) of this revenue procedure. 1040 amended tax form If an S corporation receives a statement described in sections 4. 1040 amended tax form 07(2) or 4. 1040 amended tax form 10(3) of this revenue procedure or this section 4. 1040 amended tax form 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. 1040 amended tax form 07(2)(b)(i), (ii), (iii), (iv) and (ix) of this revenue procedure. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form (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. 1040 amended tax form 704-1(b)(2)(iii). 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form The partnership allocates amounts described in section 4. 1040 amended tax form 06 of this revenue procedure under this section 4. 1040 amended tax form 12(3) as if the additional COD income was realized. 1040 amended tax form (4) The deferred § 752 amount for partners in a partnership making a § 108(i) election is calculated only for the partnership’s direct partners. 1040 amended tax form 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. 1040 amended tax form (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. 1040 amended tax form (6) This paragraph 4. 1040 amended tax form 12(6) provides the rules for Category 1 and Category 2 filers of Form 8865, Return of U. 1040 amended tax form S. 1040 amended tax form 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. 1040 amended tax form 07(1) of this revenue procedure, or a statement described in sections 4. 1040 amended tax form 07(2) or 4. 1040 amended tax form 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). 1040 amended tax form (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. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form (b) A Category 2 filer must include its share of the information described in section 4. 1040 amended tax form 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 1040 amended tax form Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 1040 amended tax form (c) The Category 1 and Category 2 filers should not attach the statements described in sections 4. 1040 amended tax form 12(6)(a)(ii) and 4. 1040 amended tax form 12(6)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 1040 amended tax form However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 1040 amended tax form (7) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 4. 1040 amended tax form 12(1) of this revenue procedure or a shareholder of an S corporation described in section 4. 1040 amended tax form 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. 1040 amended tax form 12(1) and (2) of this revenue procedure. 1040 amended tax form Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 1040 amended tax form 12(6) of this revenue procedure. 1040 amended tax form (8) The provisions of section 4. 1040 amended tax form 12(2), (3), (5) and (6) of this revenue procedure also apply to a statement received that is described in section 4. 1040 amended tax form 11(2) of this revenue procedure, except that the information that must be provided are those items described in section 4. 1040 amended tax form 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. 1040 amended tax form 11(1)(d) of this revenue procedure. 1040 amended tax form SECTION 5. 1040 amended tax form REQUIRED INFORMATION STATEMENT . 1040 amended tax form 01 Annual Information Statements. 1040 amended tax form Pursuant to § 108(i)(7)(B), a taxpayer that makes an election under § 108(i) (except for a protective election under section 4. 1040 amended tax form 11(1) of this revenue procedure) must attach a statement meeting the requirements of section 5. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 02 Contents of Statement. 1040 amended tax form A statement meets the requirements of this section 5. 1040 amended tax form 02 if the statement— (1) Label. 1040 amended tax form States “Section 108(i) Information Statement” across the top; (2) Required information. 1040 amended tax form 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. 1040 amended tax form (3) Election attached. 1040 amended tax form Includes a copy of the election statement described in section 4. 1040 amended tax form 05 of this revenue procedure. 1040 amended tax form . 1040 amended tax form 03 Additional Annual Reporting Requirements for Certain Partnerships. 1040 amended tax form The rules of this section 5. 1040 amended tax form 03 apply to partnerships other than partnerships described in section 5. 1040 amended tax form 05 of this revenue procedure. 1040 amended tax form (1) In general. 1040 amended tax form A partnership that makes an election under § 108(i) (except for a protective election under section 4. 1040 amended tax form 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 1040 amended tax form 01 of this revenue procedure. 1040 amended tax form In addition, for each taxable year in which a statement is required under section 5. 1040 amended tax form 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. 1040 amended tax form 07(1) of this revenue procedure. 1040 amended tax form (2) Annual information statements provided to partners. 1040 amended tax form 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. 1040 amended tax form 01 of this revenue procedure, a statement meeting the requirements of this section 5. 1040 amended tax form 03(2). 1040 amended tax form 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. 1040 amended tax form A statement meets the requirements of this section 5. 1040 amended tax form 03(2) if the statement— (a) Label. 1040 amended tax form States “Section 108(i) Annual Information Statement for Partners” across the top of the statement. 1040 amended tax form (b) Required information. 1040 amended tax form 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. 1040 amended tax form If a partner fails to provide the written statement required by section 4. 1040 amended tax form 07(3) of this revenue procedure, the partnership must indicate that the amounts described in this section 5. 1040 amended tax form 03(2)(b)(ix) cannot be calculated because the partner did not provide the information necessary to report these amounts. 1040 amended tax form . 1040 amended tax form 04 Additional Annual Reporting Requirements for an S Corporation. 1040 amended tax form (1) In general. 1040 amended tax form An S corporation that makes an election under § 108(i) (except for a protective election under section 4. 1040 amended tax form 11(1) of this revenue procedure) must attach to its federal income tax returns the statements required under section 5. 1040 amended tax form 01 of this revenue procedure. 1040 amended tax form In addition, for each taxable year in which a statement is required under section 5. 1040 amended tax form 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. 1040 amended tax form 08(1) of this revenue procedure. 1040 amended tax form (2) Annual information statements provided to shareholders. 1040 amended tax form 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. 1040 amended tax form 01 of this revenue procedure a statement meeting the requirements of this section 5. 1040 amended tax form 04(2). 1040 amended tax form 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. 1040 amended tax form A statement meets the requirements of this section 5. 1040 amended tax form 04(2) if the statement— (a) Label. 1040 amended tax form States “Section 108(i) Annual Information Statement for Shareholders” across the top; (b) Required information. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 05 Additional Annual Reporting Requirements for Certain Foreign Partnerships. 1040 amended tax form (1) The rules of this section 5. 1040 amended tax form 05 apply to nonfiling foreign partnerships. 1040 amended tax form (2) A nonfiling foreign partnership that makes an election under § 108(i) (except for a protective election under section 4. 1040 amended tax form 11(1) of this revenue procedure) must file federal income tax returns with the Service containing the information under § 1. 1040 amended tax form 6031(a)-1(b)(5) for each taxable year in which a statement is required by section 5. 1040 amended tax form 01 of this revenue procedure. 1040 amended tax form (3) The nonfiling foreign partnership must attach to its federal income tax returns the statements required under section 5. 1040 amended tax form 01 of this revenue procedure, but only for that portion of the COD income allocated to affected partners. 1040 amended tax form (4) For each taxable year in which a statement is required under section 5. 1040 amended tax form 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. 1040 amended tax form 07(1) of this revenue procedure. 1040 amended tax form Except for this § 108(i) information, the partnership need not complete Part III of the Schedule K-1 (Form 1065). 1040 amended tax form The partnership must provide each affected partner with a copy of the Schedule K-1 (Form 1065) by the date provided in § 1. 1040 amended tax form 6031(b)-1T(b). 1040 amended tax form The partnership must attach the Schedules K-1 (Form 1065) to the federal income tax returns filed with the Service pursuant to section 5. 1040 amended tax form 05(2) of this revenue procedure. 1040 amended tax form (5) For each taxable year for which a statement is required under section 5. 1040 amended tax form 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. 1040 amended tax form 03(2) of this revenue procedure. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 06 Information Statements Made on Behalf of Certain Foreign Corporations. 1040 amended tax form Each controlling domestic shareholder must attach a statement identifying the foreign corporation and meeting the requirements of section 5. 1040 amended tax form 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. 1040 amended tax form 01 of this revenue procedure. 1040 amended tax form . 1040 amended tax form 07 Additional Annual Reporting Requirements for Tiered Pass-Through Entities. 1040 amended tax form (1) A partnership required to file a U. 1040 amended tax form S. 1040 amended tax form partnership return other than under § 1. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form 07(1)(a) through (d) of this revenue procedure). 1040 amended tax form (2) If a partnership described in section 5. 1040 amended tax form 07(1) of this revenue procedure receives a statement described in sections 5. 1040 amended tax form 03(2) or 5. 1040 amended tax form 05(5) of this revenue procedure or this section 5. 1040 amended tax form 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. 1040 amended tax form If an S corporation receives a statement described in sections 5. 1040 amended tax form 03(2) or 5. 1040 amended tax form 05(5) of this revenue procedure or this section 5. 1040 amended tax form 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. 1040 amended tax form 03(2)(b)(i) through (viii) of this revenue procedure. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form (3) This paragraph 5. 1040 amended tax form 07(3) provides the rules for persons described in section 4. 1040 amended tax form 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. 1040 amended tax form 03(1) of this revenue procedure, or a statement described in sections 5. 1040 amended tax form 03(2) or 5. 1040 amended tax form 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). 1040 amended tax form (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. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form (b) A Category 2 filer must include its share of the information described in section 4. 1040 amended tax form 07(1) on the Schedule K-1 (Form 8865) that it is required to complete. 1040 amended tax form Category 2 filers also must complete a statement containing their share of the items listed on each statement received by the partnership. 1040 amended tax form (c) The Category 1 and Category 2 filers should not attach the statements described in sections 5. 1040 amended tax form 07(3)(a)(ii) and 5. 1040 amended tax form 07(3)(b) of this revenue procedure, respectively, to the Schedules K-1 that are filed with the Service. 1040 amended tax form However, Category 1 filers must retain the statements they complete and each partner must retain its own statement, in their respective books and records. 1040 amended tax form (4) If as a result of § 108(i)(5)(D)(ii), a partner of a partnership described in section 5. 1040 amended tax form 07(1) of this revenue procedure or a shareholder of an S corporation described in section 5. 1040 amended tax form 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. 1040 amended tax form 07(1) and (2) of this revenue procedure. 1040 amended tax form Similar rules apply to Category 1 and Category 2 filers (Form 8865) described in section 4. 1040 amended tax form 12(6) of this revenue procedure. 1040 amended tax form SECTION 6. 1040 amended tax form EFFECTIVE DATE This revenue procedure is effective for reacquisitions of applicable debt instruments in taxable years ending after December 31, 2008. 1040 amended tax form SECTION 7. 1040 amended tax form TRANSITION RULE . 1040 amended tax form 01 Noncomplying Election. 1040 amended tax form Except as otherwise provided in this section 7. 1040 amended tax form 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. 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 02 Modification of Election. 1040 amended tax form 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). 1040 amended tax form 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. 1040 amended tax form . 1040 amended tax form 03 Notations. 1040 amended tax form A taxpayer that files the amended return on paper must write “Section 108(i) Election” on the top of the first page. 1040 amended tax form A taxpayer that files the amended return electronically should indicate “Section 108(i) Election” on the return. 1040 amended tax form See Publication 4163, Modernized e-File (MeF) Information for Authorized IRS e-file Providers for Business Returns Tax Year 2008 for more details. 1040 amended tax form SECTION 8. 1040 amended tax form 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. 1040 amended tax form S. 1040 amended tax form C. 1040 amended tax form 3507) under control number 1545-2147. 1040 amended tax form 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. 1040 amended tax form The collection of information in this revenue procedure is in sections 4, 5 and 7. 1040 amended tax form 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. 1040 amended tax form This information will be used during examination to verify that a taxpayer has correctly deferred income and deductions. 1040 amended tax form The collection of information is required to obtain a benefit. 1040 amended tax form 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. 1040 amended tax form The estimated total annual reporting burden is 300,000 hours. 1040 amended tax form The estimated annual burden per respondent varies from 1 to 8 hours, depending on individual circumstances, with an estimated average of 6 hours. 1040 amended tax form The estimated number of respondents is 50,000. 1040 amended tax form 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. 1040 amended tax form Generally, tax returns and return information are confidential, as required by § 6103. 1040 amended tax form DRAFTING INFORMATION The principal authors of this revenue procedure are Megan A. 1040 amended tax form Stoner of the Office of Associate Chief Counsel (Passthroughs & Special Industries) and Craig Wojay of the Office of Associate Chief Counsel (Income Tax & Accounting). 1040 amended tax form For further information regarding this revenue procedure, contact Megan A. 1040 amended tax form Stoner at (202) 622-3070 for questions involving partnerships and S corporations, William E. 1040 amended tax form Blanchard at (202) 622-3950 for questions involving OID, Ronald M. 1040 amended tax form 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). 1040 amended tax 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IRS Releases the Dirty Dozen Tax Scams for 2012

IR-2012-23, Feb. 16, 2012

WASHINGTON –– The Internal Revenue Service today issued its annual “Dirty Dozen” ranking of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

“Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen,” said IRS Commissioner Doug Shulman. “Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shutdown scams and prosecute the criminals behind them.

The following is the Dirty Dozen tax scams for 2012:

Identity Theft

Topping this year’s list Dirty Dozen list is identity theft. In response to growing identity theft concerns, the IRS has embarked on a comprehensive strategy that is focused on preventing, detecting and resolving identity theft cases as soon as possible. In addition to the law-enforcement crackdown, the IRS has stepped up its internal reviews to spot false tax returns before tax refunds are issued as well as working to help victims of the identity theft refund schemes.

Identity theft cases are among the most complex ones the IRS handles, but the agency is committed to working with taxpayers who have become victims of identity theft.

The IRS is increasingly seeing identity thieves looking for ways to use a legitimate taxpayer’s identity and personal information to file a tax return and claim a fraudulent refund.
 
An IRS notice informing a taxpayer that more than one return was filed in the taxpayer’s name or that the taxpayer received wages from an unknown employer may be the first tip off the individual receives that he or she has been victimized. 

The IRS has a robust screening process with measures in place to stop fraudulent returns. While the IRS is continuing to address tax-related identity theft aggressively, the agency is also seeing an increase in identity crimes, including more complex schemes. In 2011, the IRS protected more than $1.4 billion of taxpayer funds from getting into the wrong hands due to identity theft.

In January, the IRS announced the results of a massive, national sweep cracking down on suspected identity theft perpetrators as part of a stepped-up effort against refund fraud and identity theft.  Working with the Justice Department’s Tax Division and local U.S. Attorneys’ offices, the nationwide effort targeted 105 people in 23 states.

Anyone who believes his or her personal information has been stolen and used for tax purposes should immediately contact the IRS Identity Protection Specialized Unit.  For more information, visit the special identity theft page at www.IRS.gov/identitytheft

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information.  This includes any type of electronic communication, such as text messages and social media channels.  The IRS has information that can help you protect yourself from email scams.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare and file their tax returns. Most return preparers provide honest service to their clients. But as in any other business, there are also some who prey on unsuspecting taxpayers.

Questionable return preparers have been known to skim off their clients’ refunds, charge inflated fees for return preparation services and attract new clients by promising guaranteed or inflated refunds. Taxpayers should choose carefully when hiring a tax preparer. Federal courts have issued hundreds of injunctions ordering individuals to cease preparing returns, and the Department of Justice has pending complaints against many others.

In 2012, every paid preparer needs to have a Preparer Tax Identification Number (PTIN) and enter it on the returns he or she prepares.

Signals to watch for when you are dealing with an unscrupulous return preparer would include that they:

  • Do not sign the return or place a Preparer Tax identification Number on it.
  • Do not give you a copy of your tax return.
  • Promise larger than normal tax refunds.
  • Charge a percentage of the refund amount as preparation fee.
  • Require you to split the refund to pay the preparation fee.
  • Add forms to the return you have never filed before.
  • Encourage you to place false information on your return, such as false income, expenses and/or credits.

For advice on how to find a competent tax professional, see  Tips for Choosing a Tax Preparer.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities, using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting and disclosure requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.
 
Since 2009, 30,000 individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to bring their money back into the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore will become increasingly more difficult.

At the beginning of this year, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.  This program will be open for an indefinite period until otherwise announced.

The IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from up front payments required under the 2011 program.  That number will grow as the IRS processes the 2011 cases.

“Free Money” from the IRS & Tax Scams Involving Social Security

Flyers and advertisements for free money from the IRS, suggesting that the taxpayer can file a tax return with little or no documentation, have been appearing in community churches around the country. These schemes are also often spread by word of mouth as unsuspecting and well-intentioned people tell their friends and relatives.

Scammers prey on low income individuals and the elderly. They build false hopes and charge people good money for bad advice. In the end, the victims discover their claims are rejected. Meanwhile, the promoters are long gone. The IRS warns all taxpayers to remain vigilant.

There are a number of tax scams involving Social Security. For example, scammers have been known to lure the unsuspecting with promises of non-existent Social Security refunds or rebates. In another situation, a taxpayer may really be due a credit or refund but uses inflated information to complete the return. 

Beware. Intentional mistakes of this kind can result in a $5,000 penalty.

False/Inflated Income and Expenses

Including income that was never earned, either as wages or as self-employment income in order to maximize refundable credits, is another popular scam. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions.  This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution. 

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit when their occupations or income levels make the claims unreasonable. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

False Form 1099 Refund Claims

In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are false and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law.

Falsely Claiming Zero Wages

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Abuse of Charitable Organizations and Deductions

IRS examiners continue to uncover the intentional abuse of 501(c)(3) organizations, including arrangements that improperly shield income or assets from taxation and attempts by donors to maintain control over donated assets or the income from donated property. The IRS is investigating schemes that involve the donation of non-cash assets –– including situations in which several organizations claim the full value of the same non-cash contribution. Often these donations are highly overvalued or the organization receiving the donation promises that the donor can repurchase the items later at a price set by the donor. The Pension Protection Act of 2006 imposed increased penalties for inaccurate appraisals and set new standards for qualified appraisals.

Disguised Corporate Ownership

Third parties are improperly used to request employer identification numbers and form corporations that obscure the true ownership of the business.

These entities can be used to underreport income, claim fictitious deductions, avoid filing tax returns, participate in listed transactions and facilitate money laundering, and financial crimes. The IRS is working with state authorities to identify these entities and bring the owners into compliance with the law.

Misuse of Trusts

For years, unscrupulous promoters have urged taxpayers to transfer assets into trusts. While there are legitimate uses of trusts in tax and estate planning, some highly questionable transactions promise reduction of income subject to tax, deductions for personal expenses and reduced estate or gift taxes. Such trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel have seen an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.
 

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Page Last Reviewed or Updated: 11-Feb-2014

The 1040 Amended Tax Form

1040 amended tax form 2. 1040 amended tax form   The Tax and Filing Requirements Table of Contents Returns and Filing Requirements Payment of TaxFederal Tax Deposits Must be Made by Electronic Funds Transfer All organizations subject to the tax on unrelated business income, except the exempt trusts described in section 511(b)(2), are taxable at corporate rates on that income. 1040 amended tax form All exempt trusts subject to the tax on unrelated business income that, if not exempt, would be taxable as trusts are taxable at trust rates on that income. 1040 amended tax form However, an exempt trust may not claim the deduction for a personal exemption that is normally allowed to a trust. 1040 amended tax form The tax is imposed on the organization's unrelated business taxable income (described in chapter 4). 1040 amended tax form The tax is reduced by any applicable tax credits, including the general business credits (such as the investment credit) and the foreign tax credit. 1040 amended tax form Alternative minimum tax. 1040 amended tax form   Organizations liable for tax on unrelated business income may be liable for alternative minimum tax on certain adjustments and tax preference items. 1040 amended tax form Returns and Filing Requirements An exempt organization subject to the tax on unrelated business income must file Form 990-T and attach any required supporting schedules and forms. 1040 amended tax form The obligation to file Form 990-T is in addition to the obligation to file any other required returns. 1040 amended tax form Form 990-T is required if the organization's gross income from unrelated businesses is $1,000 or more. 1040 amended tax form An exempt organization must report income from all its unrelated businesses on a single Form 990-T. 1040 amended tax form Each organization must file a separate Form 990-T, except section 501(c)(2) title holding corporations and organizations receiving their earnings that file a consolidated return under section 1501. 1040 amended tax form The various provisions of tax law relating to accounting periods, accounting methods, at-risk limits (described in section 465), assessments, and collection penalties that apply to tax returns generally also apply to Form 990-T. 1040 amended tax form When to file. 1040 amended tax form   The Form 990-T of an employees' trust described in section 401(a), an IRA (including a traditional, SEP, SIMPLE, Roth, or Coverdell IRA), or an MSA must be filed by the 15th day of the 4th month after the end of its tax year. 1040 amended tax form The Form 990-T of any other exempt organization must be filed by the 15th day of the 5th month after the end of its tax year. 1040 amended tax form If the due date falls on a Saturday, Sunday, or legal holiday, the return is due by the next business day. 1040 amended tax form Extension of time to file. 1040 amended tax form   A Form 990-T filer may request an automatic 3-month (6 months for corporation) extension of time to file a return by submitting Form 8868, Application for Extension of Time To File an Exempt Organization Return. 1040 amended tax form The Form 990-T filer may also use Form 8868 to apply for an additional (not automatic) 3-month extension to file the return if the original 3-month extension was not enough time. 1040 amended tax form Public Inspection Requirements of Section 501(c)(3) Organizations. 1040 amended tax form   Under section 6104(d), a section 501(c)(3) organization that has gross income from an unrelated trade or business of $1,000 or more must make its annual exempt organization business income tax return (including amended returns) available for public inspection. 1040 amended tax form    A section 501(c)(3) organization filing the Form 990-T only to request a credit for certain federal excise taxes paid does not have to make the Form 990-T available for public inspection. 1040 amended tax form Payment of Tax Estimated tax. 1040 amended tax form   A tax-exempt organization must make estimated tax payments if it expects its tax (unrelated business income tax after certain adjustments) to be $500 or more. 1040 amended tax form Estimated tax payments are generally due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. 1040 amended tax form If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. 1040 amended tax form   Any organization that fails to pay the proper estimated tax when due may be charged an underpayment penalty for the period of underpayment. 1040 amended tax form Generally, to avoid the estimated tax penalty, the organization must make estimated tax payments that total 100% of the organization's current tax year liability. 1040 amended tax form However, an organization can base its required estimated tax payments on 100% of the tax shown on its return for the preceding year (unless no tax is shown) if its taxable income for each of the 3 preceding tax years was less than $1 million. 1040 amended tax form If an organization's taxable income for any of those years was $1 million or more, it can base only its first required installment payment on its last year's tax. 1040 amended tax form   All tax-exempt organizations should use Form 990-W (Worksheet), to figure their estimated tax. 1040 amended tax form    Tax due with Form 990-T. 1040 amended tax form   Any tax due with Form 990-T must be paid in full when the return is filed, but no later than the date the return is due (determined without extensions). 1040 amended tax form Federal Tax Deposits Must be Made by Electronic Funds Transfer You must use electronic funds transfer to make all federal deposits (such as deposits of estimated tax, employment tax, and excise tax). 1040 amended tax form Forms 8109 and 8109-B, Federal Tax Deposit Coupon, are no longer in use. 1040 amended tax form Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). 1040 amended tax form If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. 1040 amended tax form Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. 1040 amended tax form EFTPS is a free service provided by the Department of Treasury. 1040 amended tax form Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. 1040 amended tax form To get more information about EFTPS or to enroll in EFTPS, visit www. 1040 amended tax form eftps. 1040 amended tax form gov or call 1-800-555-4477. 1040 amended tax form Additional information about EFTPS is available in Publication 966, The Secure Way to Pay Your Federal Taxes. 1040 amended tax form Deposits on business days only. 1040 amended tax form   If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. 1040 amended tax form A business day is any day other than a Saturday, Sunday, or legal holiday. 1040 amended tax form For example, if a deposit is required to be made on a Friday and Friday is a legal holiday, the deposit will be considered timely if it is made by the following Monday (if that Monday is a business day). 1040 amended tax form The term "legal holiday" means any legal holiday in the District of Columbia. 1040 amended tax form Prev  Up  Next   Home   More Online Publications