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File taxes online 1040ez Publication 971 - Main Content Table of Contents How To Request ReliefException for agreements relating to TEFRA partnership proceedings. File taxes online 1040ez The IRS Must Contact Your Spouse or Former Spouse Tax Court Review of Request Community Property LawsRelief for Married Persons Who Did Not File Joint Returns Innocent Spouse ReliefUnderstated Tax Erroneous Items Actual Knowledge or Reason To Know Indications of Unfairness for Innocent Spouse Relief Separation of Liability ReliefLimitations on Relief Equitable ReliefConditions for Getting Equitable Relief Factors for Determining Whether To Grant Equitable Relief RefundsProof Required Refunds Under Equitable Relief Limit on Amount of Refund Filled-in Form 8857 Flowcharts How To Request Relief File Form 8857 to ask the IRS for the types of relief discussed in this publication. File taxes online 1040ez If you are requesting relief for more than three tax years, you must file an additional Form 8857. File taxes online 1040ez The IRS will review your Form 8857 and let you know if you qualify. File taxes online 1040ez A completed Form 8857 is shown later. File taxes online 1040ez When to file Form 8857. File taxes online 1040ez   You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. File taxes online 1040ez The following are some of the ways you may become aware of such a liability. File taxes online 1040ez The IRS is examining your tax return and proposing to increase your tax liability. File taxes online 1040ez The IRS sends you a notice. File taxes online 1040ez   You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you that occurs after July 22, 1998. File taxes online 1040ez (But see the exceptions below for different filing deadlines that apply. File taxes online 1040ez ) For this reason, do not delay filing because you do not have all the documentation. File taxes online 1040ez   Collection activities that may start the 2-year period are: The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857. File taxes online 1040ez The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. File taxes online 1040ez This includes the filing of a proof of claim in a bankruptcy proceeding. File taxes online 1040ez The filing of a suit by the United States against you to collect the joint liability. File taxes online 1040ez The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. File taxes online 1040ez The collection-related notices include, but are not limited to, Letter 11 and Letter 1058. File taxes online 1040ez Exception for equitable relief. File taxes online 1040ez   On July 25, 2011, the IRS issued Notice 2011-70 (available at www. File taxes online 1040ez irs. File taxes online 1040ez gov/irb/2011-32_IRB/ar11. File taxes online 1040ez html) expanding the amount of time to request equitable relief. File taxes online 1040ez The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both: Balance Due – Generally, you must file your request within the time period the IRS has to collect the tax. File taxes online 1040ez Generally, the IRS has 10 years from the date the tax liability was assessed to collect the tax. File taxes online 1040ez In certain cases, the 10-year period is suspended. File taxes online 1040ez The amount of time the suspension is in effect will extend the time the IRS has to collect the tax. File taxes online 1040ez See Pub. File taxes online 1040ez 594, The IRS Collection Process, for details. File taxes online 1040ez Credit or Refund – Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. File taxes online 1040ez But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs. File taxes online 1040ez See Pub. File taxes online 1040ez 556, Examination of Returns, Appeal Rights, and Claims for Refund, for details. File taxes online 1040ez Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made, and the time period for collection of a balance due amount will apply to any unpaid liability. File taxes online 1040ez Exception for relief based on community property laws. File taxes online 1040ez   If you are requesting relief based on community property laws, a different filing deadline applies. File taxes online 1040ez See Relief from liability arising from community property law discussed later under Community Property Laws . File taxes online 1040ez Form 8857 filed by or on behalf of a decedent. File taxes online 1040ez   An executor (including any other duly appointed representative) may pursue a Form 8857 filed during the decedent's lifetime. File taxes online 1040ez An executor (including any other duly appointed representative) may also file Form 8857 as long as the decedent satisfied the eligibility requirements while alive. File taxes online 1040ez For purposes of separation of liability relief (discussed later), the decedent's marital status is determined on the earlier of the date relief was requested or the date of death. File taxes online 1040ez Situations in which you are not entitled to relief. File taxes online 1040ez   You are not entitled to innocent spouse relief for any tax year to which the following situations apply. File taxes online 1040ez In a final decision dated after July 22, 1998, a court considered whether to grant you relief from joint liability and decided not to do so. File taxes online 1040ez In a final decision dated after July 22, 1998, a court did not consider whether to grant you relief from joint liability, but you meaningfully participated in the proceeding and could have asked for relief. File taxes online 1040ez You entered into an offer in compromise with the IRS. File taxes online 1040ez You entered into a closing agreement with the IRS that disposed of the same liability for which you want to seek relief. File taxes online 1040ez Exception for agreements relating to TEFRA partnership proceedings. File taxes online 1040ez   You may be entitled to relief, discussed in (4) earlier, if you entered into a closing agreement for both partnership items and nonpartnership items, while you were a party to a pending TEFRA partnership proceeding. File taxes online 1040ez (TEFRA is an acronym that refers to the “Tax Equity and Fiscal Responsibility Act of 1982” that prescribed the tax treatment of partnership items. File taxes online 1040ez ) You are not entitled to relief for the nonpartnership items, but you will be entitled to relief for the partnership items (if you otherwise qualify). File taxes online 1040ez Transferee liability not affected by innocent spouse relief provisions. File taxes online 1040ez   The innocent spouse relief provisions do not affect tax liabilities that arise under federal or state transferee liability or property laws. File taxes online 1040ez Therefore, even if you are relieved of the tax liability under the innocent spouse relief provisions, you may remain liable for the unpaid tax, interest, and penalties to the extent provided by these laws. File taxes online 1040ez Example. File taxes online 1040ez Herb and Wanda timely filed their 2008 joint income tax return on April 15, 2009. File taxes online 1040ez Herb died in March 2010, and the executor of Herb's will transferred all of the estate's assets to Wanda. File taxes online 1040ez In August 2010, the IRS assessed a deficiency for the 2008 return. File taxes online 1040ez The items causing the deficiency belong to Herb. File taxes online 1040ez Wanda is relieved of the deficiency under the innocent spouse relief provisions, and Herb's estate remains solely liable for it. File taxes online 1040ez However, the IRS may collect the deficiency from Wanda to the extent permitted under federal or state transferee liability or property laws. File taxes online 1040ez The IRS Must Contact Your Spouse or Former Spouse By law, the IRS must contact your spouse or former spouse. File taxes online 1040ez There are no exceptions, even for victims of spousal abuse or domestic violence. File taxes online 1040ez We will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process. File taxes online 1040ez If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your request for relief. File taxes online 1040ez However, to protect your privacy, the IRS will not disclose your personal information (for example, your current name, address, phone number(s), information about your employer, your income or assets) or any other information that does not relate to making a determination about your request for relief from liability. File taxes online 1040ez If you petition the Tax Court (explained below), your spouse or former spouse may see your personal information. File taxes online 1040ez Tax Court Review of Request After you file Form 8857, you may be able to petition (ask) the United States Tax Court to review your request for relief in the following two situations. File taxes online 1040ez The IRS sends you a final determination letter regarding your request for relief. File taxes online 1040ez You do not receive a final determination letter from the IRS within six months from the date you filed Form 8857. File taxes online 1040ez If you seek equitable relief for an underpaid tax, you will be able to get a Tax Court review of your request only if the tax arose or remained unpaid on or after December 20, 2006. File taxes online 1040ez The United States Tax Court is an independent judicial body and is not part of the IRS. File taxes online 1040ez You must file a petition with the United States Tax Court in order for it to review your request for relief. File taxes online 1040ez You must file the petition no later than the 90th day after the date the IRS mails its final determination notice to you. File taxes online 1040ez If you do not file a petition, or you file it late, the Tax Court cannot review your request for relief. File taxes online 1040ez You can get a copy of the rules for filing a petition by writing to the Tax Court at the following address:    United States Tax Court 400 Second Street, NW Washington, DC 20217 Or you can visit the Tax Court's website at www. File taxes online 1040ez ustaxcourt. File taxes online 1040ez gov Community Property Laws You must generally follow community property laws when filing a tax return if you are married and live in a community property state. File taxes online 1040ez Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. File taxes online 1040ez Generally, community property laws require you to allocate community income and expenses equally between both spouses. File taxes online 1040ez However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. File taxes online 1040ez Relief for Married Persons Who Did Not File Joint Returns Married persons who live in community property states, but who did not file joint returns, have two ways to get relief. File taxes online 1040ez Relief From Liability Arising From Community Property Law You are not responsible for the tax relating to an item of community income if all the following conditions exist. File taxes online 1040ez You did not file a joint return for the tax year. File taxes online 1040ez You did not include the item of community income in gross income. File taxes online 1040ez The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. File taxes online 1040ez Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. File taxes online 1040ez Your spouse's (or former spouse's) distributive share of partnership income. File taxes online 1040ez Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). File taxes online 1040ez Use the appropriate community property law to determine what is separate property. File taxes online 1040ez Any other income that belongs to your spouse (or former spouse) under community property law. File taxes online 1040ez You establish that you did not know of, and had no reason to know of, that community income. File taxes online 1040ez See  Actual Knowledge or Reason To Know , below. File taxes online 1040ez Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. File taxes online 1040ez See Indications of unfairness for liability arising from community property law, later. File taxes online 1040ez Actual knowledge or reason to know. File taxes online 1040ez   You knew or had reason to know of an item of community income if: You actually knew of the item of community income, or A reasonable person in similar circumstances would have known of the item of community income. File taxes online 1040ez Amount of community income unknown. File taxes online 1040ez   If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. File taxes online 1040ez Not knowing the specific amount is not a basis for relief. File taxes online 1040ez Reason to know. File taxes online 1040ez   The IRS will consider all facts and circumstances in determining whether you had reason to know of an item of community income. File taxes online 1040ez The facts and circumstances include: The nature of the item of community income and the amount of the item relative to other income items. File taxes online 1040ez The financial situation of you and your spouse (or former spouse). File taxes online 1040ez Your educational background and business experience. File taxes online 1040ez Whether the item of community income represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). File taxes online 1040ez Indications of unfairness for liability arising from community property law. File taxes online 1040ez   The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax due to the item of community income. File taxes online 1040ez   The following are examples of factors the IRS will consider. File taxes online 1040ez Whether you received a benefit, either directly or indirectly, from the omitted item of community income (defined below). File taxes online 1040ez Whether your spouse (or former spouse) deserted you. File taxes online 1040ez Whether you and your spouse have been divorced or separated. File taxes online 1040ez  For other factors see Factors for Determining Whether To Grant Equitable Relief later. File taxes online 1040ez Benefit from omitted item of community income. File taxes online 1040ez   A benefit includes normal support, but does not include de minimis (small) amounts. File taxes online 1040ez Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers received several years after the filing of the return. File taxes online 1040ez   For example, if you receive property, including life insurance proceeds, from your spouse (or former spouse) and the property is traceable to omitted items of community income attributable to your spouse (or former spouse), you are considered to have benefitted from those omitted items of community income. File taxes online 1040ez Equitable Relief If you do not qualify for the relief described above and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief (discussed later). File taxes online 1040ez How and When To Request Relief You request relief by filing Form 8857, as discussed earlier. File taxes online 1040ez Fill in Form 8857 according to the instructions. File taxes online 1040ez For relief from liability arising from community property law, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse for the tax year for which you are requesting relief. File taxes online 1040ez However, if the IRS begins an examination of your return during that 6-month period, the latest time for requesting relief is 30 days after the date the IRS' initial contact letter to you. File taxes online 1040ez The period of limitation on assessment is the amount of time, generally three years, that the IRS has from the date you filed the return to assess taxes that you owe. File taxes online 1040ez Innocent Spouse Relief By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. File taxes online 1040ez Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). File taxes online 1040ez However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. File taxes online 1040ez The IRS can collect these amounts from either you or your spouse (or former spouse). File taxes online 1040ez You must meet all of the following conditions to qualify for innocent spouse relief. File taxes online 1040ez You filed a joint return. File taxes online 1040ez There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse). File taxes online 1040ez You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). File taxes online 1040ez See Actual Knowledge or Reason To Know, later. File taxes online 1040ez Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. File taxes online 1040ez See Indications of Unfairness for Innocent Spouse Relief , later. File taxes online 1040ez Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. File taxes online 1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. File taxes online 1040ez Understated Tax You have an understated tax if the IRS determined that your total tax should be more than the amount that was actually shown on your return. File taxes online 1040ez Erroneous Items Erroneous items are either of the following. File taxes online 1040ez Unreported income. File taxes online 1040ez This is any gross income item received by your spouse (or former spouse) that is not reported. File taxes online 1040ez Incorrect deduction, credit, or basis. File taxes online 1040ez This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse). File taxes online 1040ez The following are examples of erroneous items. File taxes online 1040ez The expense for which the deduction is taken was never paid or incurred. File taxes online 1040ez For example, your spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C of your joint Form 1040, but never paid for any advertising. File taxes online 1040ez The expense does not qualify as a deductible expense. File taxes online 1040ez For example, your spouse claimed a business fee deduction of $10,000 that was for the payment of state fines. File taxes online 1040ez Fines are not deductible. File taxes online 1040ez No factual argument can be made to support the deductibility of the expense. File taxes online 1040ez For example, your spouse claimed $4,000 for security costs related to a home office, which were actually veterinary and food costs for your family's two dogs. File taxes online 1040ez Actual Knowledge or Reason To Know You knew or had reason to know of an understated tax if: You actually knew of the understated tax, or A reasonable person in similar circumstances would have known of the understated tax. File taxes online 1040ez Actual knowledge. File taxes online 1040ez   If you actually knew about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. File taxes online 1040ez You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. File taxes online 1040ez For information about the criteria for determining whether you actually knew about an erroneous item, see Actual Knowledge later under Separation of Liability Relief. File taxes online 1040ez Reason to know. File taxes online 1040ez   If you had reason to know about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. File taxes online 1040ez You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. File taxes online 1040ez   The IRS will consider all facts and circumstances in determining whether you had reason to know of an understated tax due to an erroneous item. File taxes online 1040ez The facts and circumstances include: The nature of the erroneous item and the amount of the erroneous item relative to other items. File taxes online 1040ez The financial situation of you and your spouse (or former spouse). File taxes online 1040ez Your educational background and business experience. File taxes online 1040ez The extent of your participation in the activity that resulted in the erroneous item. File taxes online 1040ez Whether you failed to ask, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question. File taxes online 1040ez Whether the erroneous item represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). File taxes online 1040ez Partial relief when a portion of erroneous item is unknown. File taxes online 1040ez   You may qualify for partial relief if, at the time you filed your return, you had no knowledge or reason to know of only a portion of an erroneous item. File taxes online 1040ez You will be relieved of the understated tax due to that portion of the item if all other requirements are met for that portion. File taxes online 1040ez Example. File taxes online 1040ez At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. File taxes online 1040ez The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. File taxes online 1040ez You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. File taxes online 1040ez The understated tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. File taxes online 1040ez The understated tax due to the $5,000 of gambling winnings you knew about will not qualify for relief. File taxes online 1040ez Indications of Unfairness for Innocent Spouse Relief The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax. File taxes online 1040ez The following are examples of factors the IRS will consider. File taxes online 1040ez Whether you received a significant benefit (defined below), either directly or indirectly, from the understated tax. File taxes online 1040ez Whether your spouse (or former spouse) deserted you. File taxes online 1040ez Whether you and your spouse have been divorced or separated. File taxes online 1040ez Whether you received a benefit on the return from the understated tax. File taxes online 1040ez For other factors, see Factors for Determining Whether To Grant Equitable Relief later under Equitable Relief. File taxes online 1040ez Significant benefit. File taxes online 1040ez   A significant benefit is any benefit in excess of normal support. File taxes online 1040ez Normal support depends on your particular circumstances. File taxes online 1040ez Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers that may be received several years after the year of the understated tax. File taxes online 1040ez Example. File taxes online 1040ez You receive money from your spouse that is beyond normal support. File taxes online 1040ez The money can be traced to your spouse's lottery winnings that were not reported on your joint return. File taxes online 1040ez You will be considered to have received a significant benefit from that income. File taxes online 1040ez This is true even if your spouse gives you the money several years after he or she received it. File taxes online 1040ez Separation of Liability Relief Under this type of relief, the understated tax (plus interest and penalties) on your joint return is allocated between you and your spouse (or former spouse). File taxes online 1040ez The understated tax allocated to you is generally the amount you are responsible for. File taxes online 1040ez This type of relief is available only for unpaid liabilities resulting from the understated tax. File taxes online 1040ez Refunds are not allowed. File taxes online 1040ez To request separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. File taxes online 1040ez You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. File taxes online 1040ez (Under this rule, you are no longer married if you are widowed. File taxes online 1040ez ) You were not a member of the same household (explained below) as the spouse with whom you filed the joint return at any time during the 12-month per- iod ending on the date you file Form 8857. File taxes online 1040ez Members of the same household. File taxes online 1040ez   You and your spouse are not members of the same household if you are living apart and are estranged. File taxes online 1040ez However, you and your spouse are considered members of the same household if any of the following conditions are met. File taxes online 1040ez You and your spouse reside in the same dwelling. File taxes online 1040ez You and your spouse reside in separate dwellings but are not estranged, and one of you is temporarily absent from the other's household as explained in (3) below. File taxes online 1040ez Either spouse is temporarily absent from the household and it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. File taxes online 1040ez Examples of temporary absences include absence due to imprisonment, illness, business, vacation, military service, or education. File taxes online 1040ez Burden of proof. File taxes online 1040ez   You must be able to prove that you meet all of the requirements for separation of liability relief (except actual knowledge) and that you did not transfer property to avoid tax (discussed later). File taxes online 1040ez You must also establish the basis for allocating the erroneous items. File taxes online 1040ez Limitations on Relief Even if you meet the requirements discussed previously, separation of liability relief will not be granted in the following situations. File taxes online 1040ez The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. File taxes online 1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. File taxes online 1040ez The IRS proves that at the time you signed your joint return, you had actual knowledge (explained below) of any erroneous items giving rise to the deficiency that were allocable to your spouse (or former spouse). File taxes online 1040ez For the definition of erroneous items, see Erroneous Items earlier under Innocent Spouse Relief. File taxes online 1040ez Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. File taxes online 1040ez See Transfers of Property To Avoid Tax , later. File taxes online 1040ez Actual Knowledge The relief discussed here does not apply to any part of the understated tax due to your spouse's (or former spouse's) erroneous items of which you had actual knowledge. File taxes online 1040ez You and your spouse (or former spouse) remain jointly and severally liable for this part of the understated tax. File taxes online 1040ez If you had actual knowledge of only a portion of an erroneous item, the IRS will not grant relief for that portion of the item. File taxes online 1040ez You had actual knowledge of an erroneous item if: You knew that an item of unreported income was received. File taxes online 1040ez (This rule applies whether or not there was a receipt of cash. File taxes online 1040ez ) You knew of the facts that made an incorrect deduction or credit unallowable. File taxes online 1040ez For a false or inflated deduction, you knew that the expense was not incurred, or not incurred to the extent shown on the tax return. File taxes online 1040ez Knowledge of the source of an erroneous item is not sufficient to establish actual knowledge. File taxes online 1040ez Also, your actual knowledge may not be inferred when you merely had a reason to know of the erroneous item. File taxes online 1040ez Similarly, the IRS does not have to establish that you knew of the source of an erroneous item in order to establish that you had actual knowledge of the item itself. File taxes online 1040ez Your actual knowledge of the proper tax treatment of an erroneous item is not relevant for purposes of demonstrating that you had actual knowledge of that item. File taxes online 1040ez Neither is your actual knowledge of how the erroneous item was treated on the tax return. File taxes online 1040ez For example, if you knew that your spouse received dividend income, relief is not available for that income even if you did not know it was taxable. File taxes online 1040ez Example. File taxes online 1040ez Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. File taxes online 1040ez The IRS audited their return and found that Bill did not report $20,000 of self-employment income. File taxes online 1040ez The additional income resulted in a $6,000 understated tax, plus interest and penalties. File taxes online 1040ez After obtaining a legal separation from Bill, Karen filed Form 8857 to request separation of liability relief. File taxes online 1040ez The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. File taxes online 1040ez Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. File taxes online 1040ez Karen is also liable for the understated tax, interest, and penalties due to the $20,000 of unreported income because she actually knew of the item. File taxes online 1040ez The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it. File taxes online 1040ez Factors supporting actual knowledge. File taxes online 1040ez   The IRS may rely on all facts and circumstances in determining whether you actually knew of an erroneous item at the time you signed the return. File taxes online 1040ez The following are examples of factors the IRS may use. File taxes online 1040ez Whether you made a deliberate effort to avoid learning about the item in order to be shielded from liability. File taxes online 1040ez Whether you and your spouse (or former spouse) jointly owned the property that resulted in the erroneous item. File taxes online 1040ez Exception for spousal abuse or domestic violence. File taxes online 1040ez   Even if you had actual knowledge, you may still qualify for relief if you establish that: You were the victim of spousal abuse or domestic violence before signing the return, and Because of that abuse, you did not challenge the treatment of any items on the return because you were afraid your spouse (or former spouse) would retaliate against you. File taxes online 1040ez   If you establish that you signed your joint return under duress (threat of harm or other form of coercion), then it is not a joint return, and you are not liable for any tax shown on that return or any tax deficiency for that return. File taxes online 1040ez However, you may be required to file a separate return for that tax year. File taxes online 1040ez For more information about duress, see the instructions for Form 8857. File taxes online 1040ez Transfers of Property To Avoid Tax If your spouse (or former spouse) transfers property (or the right to property) to you for the main purpose of avoiding tax or payment of tax, the tax liability allocated to you will be increased by the fair market value of the property on the date of the transfer. File taxes online 1040ez The increase may not be more than the entire amount of the liability. File taxes online 1040ez A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is 1 year before the date on which the IRS sent its first letter of proposed deficiency. File taxes online 1040ez This presumption will not apply if: The transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement, or You establish that the transfer did not have as its main purpose the avoidance of tax or payment of tax. File taxes online 1040ez If the presumption does not apply, but the IRS can establish that the purpose of the transfer was the avoidance of tax or payment of tax, the tax liability allocated to you will be increased as explained above. File taxes online 1040ez Equitable Relief If you do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief. File taxes online 1040ez Unlike innocent spouse relief or separation of liability relief, you can get equitable relief from an understated tax (defined earlier under Innocent Spouse Relief ) or an underpaid tax. File taxes online 1040ez An underpaid tax is an amount of tax you properly reported on your return but you have not paid. File taxes online 1040ez For example, your joint 2009 return shows that you and your spouse owed $5,000. File taxes online 1040ez You paid $2,000 with the return. File taxes online 1040ez You have an underpaid tax of $3,000. File taxes online 1040ez Conditions for Getting Equitable Relief You may qualify for equitable relief if you meet all of the following conditions. File taxes online 1040ez You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. File taxes online 1040ez You have an understated tax or an underpaid tax. File taxes online 1040ez You did not pay the tax. File taxes online 1040ez However, see Refunds , later, for situations in which you are entitled to a refund of payments you made. File taxes online 1040ez You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax. File taxes online 1040ez See Factors for Determining Whether To Grant Equitable Relief, later. File taxes online 1040ez You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. File taxes online 1040ez A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. File taxes online 1040ez Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. File taxes online 1040ez See Transfers of Property To Avoid Tax, earlier, under Separation of Liability Relief. File taxes online 1040ez You did not file or fail to file your return with the intent to commit fraud. File taxes online 1040ez The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies: The item is attributable or partially attributable to you solely due to the operation of community property law. File taxes online 1040ez If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief. File taxes online 1040ez If the item is titled in your name, the item is presumed to be attributable to you. File taxes online 1040ez However, you can rebut this presumption based on the facts and circumstances. File taxes online 1040ez You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. File taxes online 1040ez If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse). File taxes online 1040ez You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse's (or former spouse's) retaliation. File taxes online 1040ez If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item. File taxes online 1040ez Factors for Determining Whether To Grant Equitable Relief The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold you responsible for the understated or underpaid tax. File taxes online 1040ez The following are examples of factors that the IRS will consider to determine whether to grant equitable relief. File taxes online 1040ez The IRS will consider all factors and weigh them appropriately. File taxes online 1040ez Relevant Factors The following are examples of factors that may be relevant to whether the IRS will grant equitable relief. File taxes online 1040ez Whether you are separated (whether legally or not) or divorced from your spouse. File taxes online 1040ez A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. File taxes online 1040ez A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. File taxes online 1040ez Whether you would suffer a significant economic hardship if relief is not granted. File taxes online 1040ez (In other words, you would not be able to pay your reasonable basic living expenses. File taxes online 1040ez ) Whether you have a legal obligation under a divorce decree or agreement to pay the tax. File taxes online 1040ez This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability. File taxes online 1040ez Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax. File taxes online 1040ez (For a definition of significant benefit, see Indications of Unfairness for Innocent Spouse Relief earlier. File taxes online 1040ez ) Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years. File taxes online 1040ez Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next. File taxes online 1040ez Knowledge or reason to know. File taxes online 1040ez   In the case of an underpaid tax, the IRS will consider whether you did not know and had no reason to know that your spouse (or former spouse) would not pay the income tax liability. File taxes online 1040ez   In the case of an income tax liability that arose from an understated tax, the IRS will consider whether you did not know and had no reason to know of the item causing the understated tax. File taxes online 1040ez Reason to know of the item giving rise to the understated tax will not be weighed more heavily than other factors. File taxes online 1040ez Actual knowledge of the item giving rise to the understated tax, however, is a strong factor weighing against relief. File taxes online 1040ez This strong factor may be overcome if the factors in favor of equitable relief are particularly compelling. File taxes online 1040ez Reason to know. File taxes online 1040ez   In determining whether you had reason to know, the IRS will consider your level of education, any deceit or evasiveness of your spouse (or former spouse), your degree of involvement in the activity generating the income tax liability, your involvement in business and household financial matters, your business or financial expertise, and any lavish or unusual expenditures compared with past spending levels. File taxes online 1040ez Example. File taxes online 1040ez You and your spouse filed a joint 2009 return. File taxes online 1040ez That return showed you owed $10,000. File taxes online 1040ez You had $5,000 of your own money and you took out a loan to pay the other $5,000. File taxes online 1040ez You gave 2 checks for $5,000 each to your spouse to pay the $10,000 liability. File taxes online 1040ez Without telling you, your spouse took the $5,000 loan and spent it on himself. File taxes online 1040ez You and your spouse were divorced in 2010. File taxes online 1040ez In addition, you had no knowledge or reason to know at the time you signed the return that the tax would not be paid. File taxes online 1040ez These facts indicate to the IRS that it may be unfair to hold you liable for the $5,000 underpaid tax. File taxes online 1040ez The IRS will consider these facts, together with all of the other facts and circumstances, to determine whether to grant you equitable relief from the $5,000 underpaid tax. File taxes online 1040ez Factors Weighing in Favor of Equitable Relief The following are examples of factors that will weigh in favor of equitable relief, but will not weigh against equitable relief. File taxes online 1040ez Whether your spouse (or former spouse) abused you. File taxes online 1040ez Whether you were in poor mental or physical health on the date you signed the return or at the time you requested relief. File taxes online 1040ez Refunds If you are granted relief, refunds are: Permitted under innocent spouse relief as explained later under Limit on Amount of Refund . File taxes online 1040ez Not permitted under separation of liability relief. File taxes online 1040ez Permitted in limited circumstances under equitable relief, as explained under Refunds Under Equitable Relief. File taxes online 1040ez Proof Required The IRS will only refund payments you made with your own money. File taxes online 1040ez However, you must provide proof that you made the payments with your own money. File taxes online 1040ez Examples of proof are a copy of your bank statement or a canceled check. File taxes online 1040ez No proof is required if your individual refund was used by the IRS to pay a tax you owed on a joint tax return for another year. File taxes online 1040ez Refunds Under Equitable Relief In the following situations, you are eligible to receive a refund of certain payments you made. File taxes online 1040ez Underpaid tax. File taxes online 1040ez   If you are granted relief for an underpaid tax, you are eligible for a refund of separate payments that you made after July 22, 1998. File taxes online 1040ez However, you are not eligible for refunds of payments made with the joint return, joint payments, or payments that your spouse (or former spouse) made. File taxes online 1040ez For example, withholding tax and estimated tax payments cannot be refunded because they are considered made with the joint return. File taxes online 1040ez   The amount of the refund is subject to the limit discussed later under Limit on Amount of Refund. File taxes online 1040ez Understated tax. File taxes online 1040ez   If you are granted relief for an understated tax, you are eligible for a refund of certain payments made under an installment agreement that you entered into with the IRS, if you have not defaulted on the installment agreement. File taxes online 1040ez You are not in default if the IRS did not issue you a notice of default or take any action to end the installment agreement. File taxes online 1040ez Only installment payments made after the date you filed Form 8857 are eligible for a refund. File taxes online 1040ez   The amount of the refund is subject to the limit discussed next. File taxes online 1040ez Limit on Amount of Refund The amount of your refund is limited. File taxes online 1040ez Read the following chart to find out the limit. File taxes online 1040ez IF you file Form 8857. File taxes online 1040ez . File taxes online 1040ez . File taxes online 1040ez THEN the refund cannot be more than. File taxes online 1040ez . File taxes online 1040ez . File taxes online 1040ez Within 3 years after filing your return The part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed Form 8857. File taxes online 1040ez After the 3-year period, but within 2 years from the time you paid the tax The tax you paid within 2 years immediately before you filed Form 8857. File taxes online 1040ez Filled-in Form 8857 This part explains how Janie Boulder fills out Form 8857 to request innocent spouse relief. File taxes online 1040ez Janie and Joe Boulder filed a joint tax return for 2007. File taxes online 1040ez They claimed one dependency exemption for their son Michael. File taxes online 1040ez Their return was adjusted by the IRS because Joe did not report a $5,000 award he won that year. File taxes online 1040ez Janie did not know about the award when the return was filed. File taxes online 1040ez They agreed to the adjustment but could not pay the additional amount due of $815 ($650 tax + $165 penalty and interest). File taxes online 1040ez Janie and Joe were divorced on May 13, 2009. File taxes online 1040ez In February 2010, Janie filed her 2009 federal income tax return as head of household. File taxes online 1040ez She expected a refund of $1,203. File taxes online 1040ez In May 2010, she received a notice informing her that the IRS had offset her refund against the $815 owed on her joint 2007 income tax return and that she had a right to file Form 8857. File taxes online 1040ez Janie applies the conditions listed earlier under Innocent Spouse Relief to see if she qualifies for relief. File taxes online 1040ez Janie meets the first and second conditions because the joint tax return they filed has an understated tax due to Joe's erroneous item. File taxes online 1040ez Janie believes she meets the third condition. File taxes online 1040ez She did not know about the award and had no reason to know about it because of the secretive way Joe conducted his financial affairs. File taxes online 1040ez Janie believes she meets the fourth condition. File taxes online 1040ez She believes it would be unfair to be held liable for the tax because she did not benefit from the award. File taxes online 1040ez Joe spent it on personal items for his use only. File taxes online 1040ez Because Janie believes she qualifies for innocent spouse relief, she first completes Part I of Form 8857 to determine if she should file the form. File taxes online 1040ez In Part I, she makes all entries under the Tax Year 1 column because she is requesting relief for only one year. File taxes online 1040ez Part I Line 1. File taxes online 1040ez   She enters “2007” on line 1 because this is the tax year for which she is requesting relief. File taxes online 1040ez Line 2. File taxes online 1040ez   She checks the box because she wants a refund. File taxes online 1040ez Note. File taxes online 1040ez Because the IRS used her individual refund to pay the tax owed on the joint tax return, she does not need to provide proof of payment. File taxes online 1040ez Line 3. File taxes online 1040ez   She checks the “No” box because the IRS did not use her share of a joint refund to pay Joe's past-due debts. File taxes online 1040ez Line 4. File taxes online 1040ez   She checks the “Yes” box because she filed a joint tax return for tax year 2007. File taxes online 1040ez Line 5. File taxes online 1040ez   She skips this line because she checked the “Yes” box on line 4. File taxes online 1040ez Part II Line 6. File taxes online 1040ez   She enters her name, address, social security number, county, and best daytime phone number. File taxes online 1040ez Part III Line 7. File taxes online 1040ez   She enters Joe's name, address, social security number, and best daytime phone number. File taxes online 1040ez Line 8. File taxes online 1040ez   She checks the “divorced since” box and enters the date she was divorced as “05/13/2009. File taxes online 1040ez ” She attaches a copy of her entire divorce decree (not Illustrated) to the form. File taxes online 1040ez Line 9. File taxes online 1040ez   She checks the box for “High school diploma, equivalent, or less,” because she had completed high school when her 2007 joint tax return was filed. File taxes online 1040ez Line 10. File taxes online 1040ez   She checks the “No” box because she was not a victim of spousal abuse or domestic violence. File taxes online 1040ez Line 11. File taxes online 1040ez   She checks the “No” box because neither she nor Joe incurred any large expenses during the year for which she wants relief. File taxes online 1040ez Line 12. File taxes online 1040ez   She checks the “Yes” box because she signed the 2007 joint tax return. File taxes online 1040ez Line 13. File taxes online 1040ez   She checks the “No” box because she did not have a mental or physical condition when the return was filed and does not have one now. File taxes online 1040ez Part IV Line 14. File taxes online 1040ez   Because she was not involved in preparing the return, she checks the box, “You were not involved in preparing the returns. File taxes online 1040ez ” Line 15. File taxes online 1040ez   She checks the box, “You did not know anything was incorrect or missing” because she did not know that Joe had received a $5,000 award. File taxes online 1040ez She explains this in the space provided. File taxes online 1040ez Line 16. File taxes online 1040ez   She checks the box, “You knew that person had income” because she knew Joe had income from wages. File taxes online 1040ez She also lists Joe's income. File taxes online 1040ez Under “Type of Income” she enters “wages. File taxes online 1040ez ” Under “Who paid it to that person,” she enters the name of Joe's employer, “Allied. File taxes online 1040ez ” Under “Tax Year 1” she enters the amount of Joe's wages, “$40,000. File taxes online 1040ez ” Because she is only requesting relief for one tax year, she leaves the entry spaces for “Tax Year 2” and “Tax Year 3” blank. File taxes online 1040ez Line 17. File taxes online 1040ez   She checks the “No” box because she did not know any amount was owed to the IRS when the 2007 return was signed. File taxes online 1040ez Line 18. File taxes online 1040ez   She checks the “No” box because, when the return was signed, she was not having financial problems. File taxes online 1040ez Line 19. File taxes online 1040ez   She checks the box, “You were not involved in handling money for the household” because Joe handled all the money for the household. File taxes online 1040ez She provides additional information in the space provided. File taxes online 1040ez Line 20. File taxes online 1040ez   She checks the “No” box because Joe has never transferred money or property to her. File taxes online 1040ez Part V Line 21. File taxes online 1040ez   She enters the number “1” on both the line for “Adults” and the line for “Children” because her current household consists of herself and her son. File taxes online 1040ez Line 22. File taxes online 1040ez   She enters her average monthly income for her entire household. File taxes online 1040ez Line 23. File taxes online 1040ez   She lists her assets, which are $500 for the fair market value of a car, $450 in her checking account, and $100 in her savings account. File taxes online 1040ez Signing and mailing Form 8857. File taxes online 1040ez    Janie signs and dates the form. File taxes online 1040ez She attaches the copy of her divorce decree (not illustrated) required by line 8. File taxes online 1040ez Finally, she sends the form to the IRS address or fax number shown in the instructions for Form 8857. File taxes online 1040ez This image is too large to be displayed in the current screen. File taxes online 1040ez Please click the link to view the image. File taxes online 1040ez Boulder's filled-in Form 8857 page 1 This image is too large to be displayed in the current screen. File taxes online 1040ez Please click the link to view the image. File taxes online 1040ez Boulder's filled-in Form 8857 page 2 This image is too large to be displayed in the current screen. File taxes online 1040ez Please click the link to view the image. File taxes online 1040ez Boulder's filled-in Form 8857 page 3 This image is too large to be displayed in the current screen. File taxes online 1040ez Please click the link to view the image. File taxes online 1040ez Boulder's filled-in Form 8857 page 4 Flowcharts The following flowcharts provide a quick way for determining whether you may qualify for relief. File taxes online 1040ez But do not rely on these flowcharts alone. File taxes online 1040ez Also read the earlier discussions. File taxes online 1040ez Figure A. File taxes online 1040ez Do You Qualify for Innocent Spouse Relief? Please click here for the text description of the image. File taxes online 1040ez "Do You Qualify for Innocent Spouse Relief?" Figure B. File taxes online 1040ez Do You Qualify for Separation of Liability Relief? Please click here for the text description of the image. File taxes online 1040ez "Do You Qualify for Separation of Liability Relief?" Figure C. File taxes online 1040ez Do You Qualify for Equitable Relief? This image is too large to be displayed in the current screen. File taxes online 1040ez Please click the link to view the image. File taxes online 1040ez "Do You Qualify for Equitable Relief?" Prev  Up  Next   Home   More Online Publications
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The File Taxes Online 1040ez

File taxes online 1040ez Publication 556 - Main Content Table of Contents Examination of ReturnsIf Your Return Is Examined Interest Netting Abatement of Interest Due to Error or Delay by the IRS Abatement of Interest for Individuals Affected by Presidentially Declared Disasters or Military or Terrorist Actions Offer in Compromise Appeal RightsAppeal Within the IRS Appeals to the Courts Refund or Credit of Overpayments Before Final Determination Claims for RefundTime for Filing a Claim for Refund Limit on Amount of Refund Processing Claims for Refund Reduced Refund How To Get Tax Help Examination of Returns Your return may be examined for a variety of reasons, and the examination may take place in any one of several ways. File taxes online 1040ez After the examination, if any changes to your tax are proposed, you can either agree with those changes and pay any additional tax you may owe, or you can disagree with the changes and appeal the decision. File taxes online 1040ez Examination selection criteria. File taxes online 1040ez   Your return may be selected for examination on the basis of computer scoring. File taxes online 1040ez A computer program called the Discriminant Inventory Function System (DIF) assigns a numeric score to each individual and some corporate tax returns after they have been processed. File taxes online 1040ez If your return is selected because of a high score under the DIF system, the potential is high that an examination of your return will result in a change to your income tax liability. File taxes online 1040ez   Your return may also be selected for examination on the basis of information received from third-party documentation, such as Forms 1099 and W-2, that does not match the information reported on your return. File taxes online 1040ez Or, your return may be selected to address both the questionable treatment of an item and to study the behavior of similar taxpayers (a market segment) in handling a tax issue. File taxes online 1040ez   In addition, your return may be selected as a result of information received from other sources on potential noncompliance with the tax laws or inaccurate filing. File taxes online 1040ez This information can come from a number of sources, including newspapers, public records, and individuals. File taxes online 1040ez The information is evaluated for reliability and accuracy before it is used as the basis of an examination or investigation. File taxes online 1040ez Notice of IRS contact of third parties. File taxes online 1040ez    The IRS must give you reasonable notice before contacting other persons about your tax matters. File taxes online 1040ez You must be given reasonable notice in advance that, in examining or collecting your tax liability, the IRS may contact third parties such as your neighbors, banks, employers, or employees. File taxes online 1040ez The IRS must also give you notice of specific contacts by providing you with a record of persons contacted on both a periodic basis and upon your request. File taxes online 1040ez    This provision does not apply: To any pending criminal investigation, When providing notice would jeopardize collection of any tax liability, Where providing notice may result in reprisal against any person, or When you authorized the contact. File taxes online 1040ez Taxpayer Advocate Service. File taxes online 1040ez   The Taxpayer Advocate Service is an independent organization within the IRS whose goal is to help taxpayers resolve problems with the IRS. File taxes online 1040ez If you have an ongoing issue with the IRS that has not been resolved through normal processes, or your problems with the IRS are causing financial difficulty, contact the Taxpayer Advocate Service. File taxes online 1040ez    Before contacting the Taxpayer Advocate Service, you should first discuss any problem with a supervisor. File taxes online 1040ez Your local Taxpayer Advocate will assist you if you are unable to resolve the problem with the supervisor. File taxes online 1040ez   For more information, see Publication 1546. File taxes online 1040ez See How To Get Tax Help , near the end of this publication, for more information about contacting the Taxpayer Advocate Service. File taxes online 1040ez Comments from small business. File taxes online 1040ez    The Small Business and Agricultural Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards have been established to receive comments from small business about federal agency enforcement actions. File taxes online 1040ez The Ombudsman will annually evaluate the enforcement activities of each agency and rate their responsiveness to small business. File taxes online 1040ez If you wish to comment on the enforcement actions of the IRS, you can take any of the following steps. File taxes online 1040ez Fax your comments to 1-202-481-5719. File taxes online 1040ez Write to the following address: Office of the National Ombudsman U. File taxes online 1040ez S. File taxes online 1040ez Small Business Administration 409 3rd Street, SW Washington, DC 20416 Call 1-888-734-3247. File taxes online 1040ez Send an email to ombudsman@sba. File taxes online 1040ez gov. File taxes online 1040ez File a comment or complaint online at www. File taxes online 1040ez sba. File taxes online 1040ez gov/ombudsman. File taxes online 1040ez If Your Return Is Examined Some examinations are handled entirely by mail. File taxes online 1040ez Examinations not handled by mail can take place in your home, your place of business, an Internal Revenue office, or the office of your authorized representative. File taxes online 1040ez If the time, place, or method is not convenient for you, the examiner will try to work out something more suitable. File taxes online 1040ez However, the IRS makes the final determination of when, where, and how the examination will take place. File taxes online 1040ez Throughout the examination, you can act on your own behalf or have someone represent you or accompany you. File taxes online 1040ez If you filed a joint return, either you or your spouse, or both, can meet with the IRS. File taxes online 1040ez The person representing you can be any federally authorized practitioner, including an attorney, a certified public accountant, an enrolled agent (a person enrolled to practice before the IRS), an enrolled actuary, or the person who prepared the return and signed it as the preparer. File taxes online 1040ez If you want someone to represent you in your absence, you must furnish that person with proper written authorization. File taxes online 1040ez You can use Form 2848 or any other properly written authorization. File taxes online 1040ez If you want to consult with an attorney, a certified public accountant, an enrolled agent, or any other person permitted to represent a taxpayer during an interview for examining a tax return or collecting tax, you should make arrangements with that person to be available for the interview. File taxes online 1040ez In most cases, the IRS must suspend the interview and reschedule it. File taxes online 1040ez The IRS cannot suspend the interview if you are there because of an administrative summons. File taxes online 1040ez Third party authorization. File taxes online 1040ez   If you checked the box in the signature area of your income tax return (Form 1040, Form 1040A, or Form 1040EZ) to allow the IRS to discuss your return with another person (a third party designee), this authorization does not replace Form 2848. File taxes online 1040ez The box you checked on your return only authorizes the other person to receive information about the processing of your return and the status of your refund during the period your return is being processed. File taxes online 1040ez For more information, see the instructions for your return. File taxes online 1040ez Confidentiality privilege. File taxes online 1040ez   Generally, the same confidentiality protection that you have with an attorney also applies to certain communications that you have with federally authorized practitioners. File taxes online 1040ez   Confidential communications are those that: Advise you on tax matters within the scope of the practitioner's authority to practice before the IRS, Would be confidential between an attorney and you, and Relate to noncriminal tax matters before the IRS, or Relate to noncriminal tax proceedings brought in federal court by or against the United States. File taxes online 1040ez   In the case of communications in connection with the promotion of a person's participation in a tax shelter, the confidentiality privilege does not apply to written communications between a federally authorized practitioner and that person, any director, officer, employee, agent, or representative of that person, or any other person holding a capital or profits interest in that person. File taxes online 1040ez   A tax shelter is any entity, plan, or arrangement, a significant purpose of which is the avoidance or evasion of income tax. File taxes online 1040ez Recordings. File taxes online 1040ez    You can make an audio recording of the examination interview. File taxes online 1040ez Your request to record the interview should be made in writing. File taxes online 1040ez You must notify the examiner 10 days in advance and bring your own recording equipment. File taxes online 1040ez The IRS also can record an interview. File taxes online 1040ez If the IRS initiates the recording, you must be notified 10 days in advance and you can get a copy of the recording at your expense. File taxes online 1040ez Transfers to another area. File taxes online 1040ez    Generally, your return is examined in the area where you live. File taxes online 1040ez But if your return can be examined more quickly and conveniently in another area, such as where your books and records are located, you can ask to have the case transferred to that area. File taxes online 1040ez Repeat examinations. File taxes online 1040ez    The IRS tries to avoid repeat examinations of the same items, but sometimes this happens. File taxes online 1040ez If your tax return was examined for the same items in either of the 2 previous years and no change was proposed to your tax liability, please contact the IRS as soon as possible to see if the examination should be discontinued. File taxes online 1040ez The Examination An examination usually begins when you are notified that your return has been selected. File taxes online 1040ez The IRS will tell you which records you will need. File taxes online 1040ez The examination can proceed more easily if you gather your records before any interview. File taxes online 1040ez Any proposed changes to your return will be explained to you or your authorized representative. File taxes online 1040ez It is important that you understand the reasons for any proposed changes. File taxes online 1040ez You should not hesitate to ask about anything that is unclear to you. File taxes online 1040ez The IRS must follow the tax laws set forth by Congress in the Internal Revenue Code. File taxes online 1040ez The IRS also follows Treasury Regulations, other rules, and procedures that were written to administer the tax laws and court decisions. File taxes online 1040ez However, the IRS can lose cases that involve taxpayers with the same issue and still apply its interpretation of the law to your situation. File taxes online 1040ez Most taxpayers agree to changes proposed by examiners, and the examinations are closed at this level. File taxes online 1040ez If you do not agree, you can appeal any proposed change by following the procedures provided to you by the IRS. File taxes online 1040ez A more complete discussion of appeal rights is found later under Appeal Rights . File taxes online 1040ez If You Agree If you agree with the proposed changes, you can sign an agreement form and pay any additional tax you may owe. File taxes online 1040ez You must pay interest on any additional tax. File taxes online 1040ez If you pay when you sign the agreement, the interest is generally figured from the due date of your return (excluding any extension of time to file) to the date of your payment. File taxes online 1040ez If you do not pay the additional tax when you sign the agreement, you will receive a bill that includes interest. File taxes online 1040ez If you pay the amount due within 10 business days of the billing date, you will not have to pay more interest or penalties. File taxes online 1040ez This period is extended to 21 calendar days if the amount due is less than $100,000. File taxes online 1040ez If you are due a refund, you will receive it sooner if you sign the agreement form. File taxes online 1040ez You will be paid interest on the refund. File taxes online 1040ez If the IRS accepts your tax return as filed, you will receive a letter in a few weeks stating that the examiner proposed no changes to your return. File taxes online 1040ez You should keep this letter with your tax records. File taxes online 1040ez If You Do Not Agree If you do not agree with the proposed changes, the examiner will explain your appeal rights. File taxes online 1040ez If your examination takes place in an IRS office, you can request an immediate meeting with the examiner's supervisor to explain your position. File taxes online 1040ez If an agreement is reached, your case will be closed. File taxes online 1040ez If you cannot reach an agreement with the supervisor at this meeting, or if the examination took place outside of an IRS office, the examiner will write up your case explaining your position and the IRS's position. File taxes online 1040ez The examiner will forward your case for processing. File taxes online 1040ez Fast track mediation. File taxes online 1040ez   The IRS offers fast track mediation services to help taxpayers resolve many disputes resulting from: Examinations (audits), Offers in compromise, Trust fund recovery penalties, and Other collection actions. File taxes online 1040ez   Most cases that are not docketed in any court qualify for fast track mediation. File taxes online 1040ez Mediation can take place at a conference you request with a supervisor, or later. File taxes online 1040ez The process involves an Appeals Officer who has been trained in mediation. File taxes online 1040ez You may represent yourself at the mediation session, or someone else can act as your representative. File taxes online 1040ez For more information, see Publication 3605. File taxes online 1040ez 30-day letter and 90-day letter. File taxes online 1040ez   Within a few weeks after your closing conference with the examiner and/or supervisor, you will receive a package with: A letter (known as a 30-day letter) notifying you of your right to appeal the proposed changes within 30 days, A copy of the examination report explaining the examiner's proposed changes, An agreement or waiver form, and A copy of Publication 5. File taxes online 1040ez You generally have 30 days from the date of the 30-day letter to tell the IRS whether you will accept or appeal the proposed changes. File taxes online 1040ez The letter will explain what steps you should take, depending on which action you choose. File taxes online 1040ez Be sure to follow the instructions carefully. File taxes online 1040ez Appeal Rights are explained later. File taxes online 1040ez 90-day letter. File taxes online 1040ez   If you do not respond to the 30-day letter, or if you later do not reach an agreement with an Appeals Officer, the IRS will send you a 90-day letter, which is also known as a notice of deficiency. File taxes online 1040ez You will have 90 days (150 days if it is addressed to you outside the United States) from the date of this notice to file a petition with the Tax Court. File taxes online 1040ez Filing a petition with the Tax Court is discussed later under Appeals to the Courts and Tax Court . File taxes online 1040ez The notice will show the 90th (or 150th) day by which you must file your petition with the Tax Court. File taxes online 1040ez Suspension of interest and penalties. File taxes online 1040ez   Generally, the IRS has 3 years from the date you filed your return (or the date the return was due, if later) to assess any additional tax. File taxes online 1040ez However, if you file your return timely (including extensions), interest and certain penalties will be suspended if the IRS does not mail a notice to you, stating your liability and the basis for that liability, within a 36-month period beginning on the later of: The date on which you filed your tax return, or The due date (without extensions) of your tax return. File taxes online 1040ez If the IRS mails a notice after the 36-month period, interest and certain penalties applicable to the suspension period will be suspended. File taxes online 1040ez   The suspension period begins the day after the close of the 36-month period and ends 21 days after the IRS mails a notice to you stating your liability and the basis for that liability. File taxes online 1040ez Also, the suspension period applies separately to each notice stating your liability and the basis for that liability received by you. File taxes online 1040ez    The suspension does not apply to a: Failure-to-pay penalty, Fraudulent tax return, Penalty, interest, addition to tax, or additional amount with respect to any tax liability shown on your return or with respect to any gross misstatement, Penalty, interest, addition to tax, or additional amount with respect to any reportable transaction that is not adequately disclosed or any listed transaction, or Criminal penalty. File taxes online 1040ez Seeking relief from improperly assessed interest. File taxes online 1040ez   You can seek relief if interest is assessed for periods during which interest should have been suspended because the IRS did not mail a notice to you in a timely manner. File taxes online 1040ez   If you believe that interest was assessed with respect to a period during which interest should have been suspended, submit Form 843, writing “Section 6404(g) Notification” at the top of the form, with the IRS Service Center where you filed your return. File taxes online 1040ez The IRS will review the Form 843 and notify you whether interest will be abated. File taxes online 1040ez If the IRS does not abate interest, you can pay the disputed interest assessment and file a claim for refund. File taxes online 1040ez If your claim is denied or not acted upon within 6 months from the date you filed it, you can file suit for a refund in your United States District Court or in the United States Court of Federal Claims. File taxes online 1040ez   If you believe that an IRS officer or employee has made an unreasonable error or delay in performing a ministerial or managerial act (discussed later under Abatement of Interest Due to Error or Delay by the IRS ), file Form 843 with the IRS Service Center where you filed the tax return. File taxes online 1040ez If the IRS denies your claim, the Tax Court may be able to review that determination. File taxes online 1040ez See Tax Court can review failure to abate interest later under Abatement of Interest Due to Error or Delay by the IRS . File taxes online 1040ez If you later agree. File taxes online 1040ez    If you agree with the examiner's changes after receiving the examination report or the 30-day letter, sign and return either the examination report or the waiver form. File taxes online 1040ez Keep a copy for your records. File taxes online 1040ez You can pay any additional amount you owe without waiting for a bill. File taxes online 1040ez Include interest on the additional tax at the applicable rate. File taxes online 1040ez This interest rate is usually for the period from the due date of the return (excluding any extension of time to file) to the date of payment. File taxes online 1040ez The examiner can tell you the interest rate(s) or help you figure the amount. File taxes online 1040ez   You must pay interest on penalties and additions to tax for failing to file returns, for overstating valuations, for understating valuations on estate and gift tax returns, and for substantially understating tax liability. File taxes online 1040ez Interest is generally figured from the date (including extensions) the tax return is required to be filed to the date you pay the penalty and/or additions to tax. File taxes online 1040ez   If you pay the amount due within 10 business days after the date of notice and demand for immediate payment, you will not have to pay any additional penalties and interest. File taxes online 1040ez This period is extended to 21 calendar days if the amount due is less than $100,000. File taxes online 1040ez How To Stop Interest From Accruing If you think that you will owe additional tax at the end of the examination, you can stop the further accrual of interest by sending money to the IRS to cover all or part of the amount you think you will owe. File taxes online 1040ez Interest on part or all of any amount you owe will stop accruing on the date the IRS receives your money. File taxes online 1040ez You can send an amount either in the form of a deposit in the nature of a cash bond or as a payment of tax. File taxes online 1040ez Both a deposit and a payment stop any further accrual of interest. File taxes online 1040ez However, making a deposit or payment will stop the accrual of interest on only the amount you sent. File taxes online 1040ez Because of compounding rules, interest will continue to accrue on accrued interest, even though you have paid the underlying tax. File taxes online 1040ez To stop the accrual of interest on both tax and interest, you must make a deposit or payment for both the tax and interest that has accrued as of the date of deposit or payment. File taxes online 1040ez Payment or Deposit Deposits differ from payments in two ways: You can have all or part of your deposit returned to you without filing for a refund. File taxes online 1040ez However, if you request and receive your deposit and the IRS later assesses a deficiency for that period and type of tax, interest will be figured as if the funds were never on deposit. File taxes online 1040ez Also, your deposit will not be returned if one of the following situations applies: The IRS assesses a tax liability. File taxes online 1040ez The IRS determines that, by returning the deposit, it may not be able to collect a future deficiency. File taxes online 1040ez The IRS determines that the deposit should be applied against another tax liability. File taxes online 1040ez Deposits returned to you will include interest based on the Federal short-term rate determined under section 6621(b). File taxes online 1040ez The deposit returned will be treated as a tax payment to the extent of the disputed tax. File taxes online 1040ez A disputed tax means the amount of tax specified at the time of deposit as a reasonable estimate of the maximum amount of any tax owed by you, such as the deficiency proposed in the 30-day letter. File taxes online 1040ez Notice not mailed. File taxes online 1040ez    If you send money before the IRS mails you a notice of deficiency, you can ask the IRS to treat it as a deposit. File taxes online 1040ez You must make your request in writing. File taxes online 1040ez   If, after being notified of a proposed liability but before the IRS mails you a notice of deficiency, you send an amount large enough to cover the proposed liability, it will be considered a payment unless you request in writing that it be treated as a deposit. File taxes online 1040ez Keep copies of all correspondence you send to the IRS. File taxes online 1040ez   If the amount you send is at least as much as the proposed liability and you do not request that it be treated as a deposit, the IRS will not send you a notice of deficiency. File taxes online 1040ez If you do not receive a notice of deficiency, you cannot take your case to the Tax Court. File taxes online 1040ez See Tax Court , later under Appeal Rights . File taxes online 1040ez Notice mailed. File taxes online 1040ez    If, after the IRS mails the notice of deficiency, you send money without written instructions, it will be treated as a payment. File taxes online 1040ez You will still be able to petition the Tax Court. File taxes online 1040ez   If you send money after receiving a notice of deficiency and you have specified in writing that it is a “deposit in the nature of a cash bond,” the IRS will treat it as a deposit if you send it before either: The close of the 90-day or 150-day period for filing a petition with the Tax Court to appeal the deficiency, or The date the Tax Court decision is final, if you have filed a petition. File taxes online 1040ez Using a Deposit To Pay the Tax If you agree with the examiner's proposed changes after the examination, your deposit will be applied against any amount you may owe. File taxes online 1040ez The IRS will not mail you a notice of deficiency and you will not have the right to take your case to the Tax Court. File taxes online 1040ez If you do not agree to the full amount of the deficiency after the examination, the IRS will mail you a notice of deficiency. File taxes online 1040ez Your deposit will be applied against the proposed deficiency unless you write to the IRS before the end of the 90-day or 150-day period stating that you still want the money to be treated as a deposit. File taxes online 1040ez You will still have the right to take your case to the Tax Court. File taxes online 1040ez Installment Agreement Request You can request a monthly installment plan if you cannot pay the full amount you owe. File taxes online 1040ez To be valid, your request must be approved by the IRS. File taxes online 1040ez However, if you owe $10,000 or less in tax and you meet certain other criteria, the IRS must accept your request. File taxes online 1040ez Before you request an installment agreement, you should consider other less costly alternatives, such as a bank loan. File taxes online 1040ez You will continue to be charged interest and penalties on the amount you owe until it is paid in full. File taxes online 1040ez Unless your income is below a certain level, the fee for an approved installment agreement has increased to $105 ($52 if you make your payments by electronic funds withdrawal). File taxes online 1040ez If your income is below a certain level, you may qualify to pay a reduced fee of $43. File taxes online 1040ez For more information about installment agreements, see Form 9465, Installment Agreement Request. File taxes online 1040ez Interest Netting If you owe interest to the IRS on an underpayment for the same period the IRS owes you interest on an overpayment, the IRS will figure interest on the underpayment and overpayment at the same interest rate (up to the amount of the overpayment). File taxes online 1040ez As a result, the net rate is zero for that period. File taxes online 1040ez Abatement of Interest Due to Error or Delay by the IRS The IRS may abate (reduce) the amount of interest you owe if the interest is due to an unreasonable error or delay by an IRS officer or employee in performing a ministerial or managerial act (discussed later). File taxes online 1040ez Only the amount of interest on income, estate, gift, generation-skipping, and certain excise taxes can be reduced. File taxes online 1040ez The amount of interest will not be reduced if you or anyone related to you contributed significantly to the error or delay. File taxes online 1040ez Also, the interest will be reduced only if the error or delay happened after the IRS contacted you in writing about the deficiency or payment on which the interest is based. File taxes online 1040ez An audit notification letter is such a contact. File taxes online 1040ez The IRS cannot reduce the amount of interest due to a general administrative decision, such as a decision on how to organize the processing of tax returns. File taxes online 1040ez Ministerial act. File taxes online 1040ez    This is a procedural or mechanical act, not involving the exercise of judgment or discretion, during the processing of a case after all prerequisites (for example, conferences and review by supervisors) have taken place. File taxes online 1040ez A decision concerning the proper application of federal tax law (or other federal or state law) is not a ministerial act. File taxes online 1040ez Example 1. File taxes online 1040ez You move from one state to another before the IRS selects your tax return for examination. File taxes online 1040ez A letter stating that your return has been selected is sent to your old address and then forwarded to your new address. File taxes online 1040ez When you get the letter, you respond with a request that the examination be transferred to the area office closest to your new address. File taxes online 1040ez The examination group manager approves your request. File taxes online 1040ez After your request has been approved, the transfer is a ministerial act. File taxes online 1040ez The IRS can reduce the interest because of any unreasonable delay in transferring the case. File taxes online 1040ez Example 2. File taxes online 1040ez An examination of your return reveals tax due for which a notice of deficiency (90-day letter) will be issued. File taxes online 1040ez After you and the IRS discuss the issues, the notice is prepared and reviewed. File taxes online 1040ez After the review process, issuing the notice of deficiency is a ministerial act. File taxes online 1040ez If there is an unreasonable delay in sending the notice of deficiency to you, the IRS can reduce the interest resulting from the delay. File taxes online 1040ez Managerial act. File taxes online 1040ez    This is an administrative act during the processing of a case that involves the loss of records or the exercise of judgment or discretion concerning the management of personnel. File taxes online 1040ez A decision concerning the proper application of federal tax law (or other federal or state law) is not a managerial act. File taxes online 1040ez Example. File taxes online 1040ez A revenue agent is examining your tax return. File taxes online 1040ez During the middle of the examination, the agent is sent to an extended training course. File taxes online 1040ez The agent's supervisor decides not to reassign your case, so the work is unreasonably delayed until the agent returns. File taxes online 1040ez Interest from the unreasonable delay can be abated since both the decision to send the agent to the training class and not to reassign the case are managerial acts. File taxes online 1040ez How to request abatement of interest. File taxes online 1040ez    You request an abatement (reduction) of interest on Form 843. File taxes online 1040ez You should file the claim with the IRS Service Center where you filed the tax return that was affected by the error or delay. File taxes online 1040ez   If you have already paid the interest and you would like a credit or refund of interest paid, you must file Form 843 within 3 years from the date you filed your original return or 2 years from the date you paid the interest, whichever is later. File taxes online 1040ez If you have not paid any of the interest, these time limitations for filing Form 843 do not apply. File taxes online 1040ez   Generally, you should file a separate Form 843 for each tax period and each type of tax. File taxes online 1040ez However, complete only one Form 843 if the interest is from an IRS error or delay that affected your tax for more than one tax period or for more than one type of tax (for example, where 2 or more tax years were being examined). File taxes online 1040ez   If your request for abatement of interest is denied, you can appeal the decision to the IRS Appeals Office. File taxes online 1040ez Tax Court can review failure to abate interest. File taxes online 1040ez    The Tax Court can review the IRS's refusal to abate (reduce) interest if all of the following requirements are met: You filed a request for abatement of interest (Form 843) with the IRS after July 30,1996. File taxes online 1040ez The IRS has mailed you a notice of final determination or a notice of disallowance. File taxes online 1040ez You file a petition with the Tax Court within 180 days of the mailing of the notice of final determination or the notice of disallowance. File taxes online 1040ez   The following requirements must also be met: For individual and estate taxpayers — your net worth must not exceed $2 million as of the filing date of your petition for review. File taxes online 1040ez For this purpose, individuals filing a joint return shall be treated as separate individuals. File taxes online 1040ez For charities and certain cooperatives — you must not have more than 500 employees as of the filing date of your petition for review. File taxes online 1040ez For all other taxpayers — your net worth must not exceed $7 million, and you must not have more than 500 employees as of the filing date of your petition for review. File taxes online 1040ez Abatement of Interest for Individuals Affected by Presidentially Declared Disasters or Military or Terrorist Actions If you are (or were) affected by a Presidentially declared disaster occurring after 1996 or a terrorist or military action occurring after September 10, 2001, the IRS may abate (reduce) the amount of interest you owe on certain taxes. File taxes online 1040ez The IRS may abate interest for the period of any additional time to file or pay that the IRS provides on account of the disaster or the terrorist or military action. File taxes online 1040ez The IRS will issue a notice or news release indicating who are affected taxpayers and stating the period of relief. File taxes online 1040ez If you are eligible for relief from interest, but were charged interest for the period of relief, the IRS may retroactively abate your interest. File taxes online 1040ez To the extent possible, the IRS can take the following actions: Make appropriate adjustments to your account. File taxes online 1040ez Notify you when the adjustments are made. File taxes online 1040ez Refund any interest paid by you where appropriate. File taxes online 1040ez For more information on disaster area losses, see Disaster Area Losses in Publication 547. File taxes online 1040ez For more information on other tax relief for victims of terrorist attacks, see Publication 3920. File taxes online 1040ez Offer in Compromise In certain circumstances, the IRS will allow you to pay less than the full amount you owe. File taxes online 1040ez If you think you may qualify, you should submit your offer by filing Form 656, Offer in Compromise. File taxes online 1040ez The IRS may accept your offer for any of the following reasons: There is doubt about the amount you owe (or whether you owe it). File taxes online 1040ez There is doubt as to whether you can pay the amount you owe based on your financial situation. File taxes online 1040ez An economic hardship would result if you had to pay the full amount owed. File taxes online 1040ez Your case presents compelling reasons that the IRS determines are a sufficient basis for compromise. File taxes online 1040ez If your offer is rejected, you have 30 days to ask the Appeals Office of the IRS to reconsider your offer. File taxes online 1040ez The IRS offers fast track mediation services to help taxpayers resolve many issues including a dispute regarding an offer in compromise. File taxes online 1040ez For more information, see Publication 3605. File taxes online 1040ez Generally, if you submit an offer in compromise, the IRS will delay certain collection activities. File taxes online 1040ez The IRS usually will not levy (take) your property to settle your tax bill during the following periods: While the IRS is evaluating your offer in compromise. File taxes online 1040ez The 30 days immediately after the offer is rejected. File taxes online 1040ez While your timely-filed appeal is being considered by Appeals. File taxes online 1040ez Also, if the IRS rejects your original offer and you submit a revised offer within 30 days of the rejection, the IRS generally will not levy your property while it considers your revised offer. File taxes online 1040ez For more information about submitting an offer in compromise, see Form 656. File taxes online 1040ez Appeal Rights Because people sometimes disagree on tax matters, the IRS has an appeals system. File taxes online 1040ez Most differences can be settled within this system without expensive and time-consuming court trials. File taxes online 1040ez However, your reasons for disagreeing must come within the scope of the tax laws. File taxes online 1040ez For example, you cannot appeal your case based only on moral, religious, political, constitutional, conscientious, or similar grounds. File taxes online 1040ez In most instances, you may be eligible to take your case to court if you do not reach an agreement at your appeals conference, or if you do not want to appeal your case to the IRS Office of Appeals. File taxes online 1040ez See Appeals to the Courts , later, for more information. File taxes online 1040ez Appeal Within the IRS You can appeal an IRS tax decision to a local Appeals Office, which is separate from and independent of the IRS office taking the action you disagree with. File taxes online 1040ez The Appeals Office is the only level of appeal within the IRS. File taxes online 1040ez Conferences with Appeals Office personnel are held in an informal manner by correspondence, by telephone, or at a personal conference. File taxes online 1040ez If you want an appeals conference, follow the instructions in the letter you received. File taxes online 1040ez Your request will be sent to the Appeals Office to arrange a conference at a convenient time and place. File taxes online 1040ez You or your representative should be prepared to discuss all disputed issues at the conference. File taxes online 1040ez Most differences are settled at this level. File taxes online 1040ez If agreement is not reached at your appeals conference, you may be eligible to take your case to court. File taxes online 1040ez See Appeals to the Courts , later. File taxes online 1040ez Protests and Small Case Requests When you request an Appeals conference, you may also need to file either a formal written protest or a small case request with the office named in the letter you received. File taxes online 1040ez Also, see the special appeal request procedures in Publication 1660. File taxes online 1040ez Written protest. File taxes online 1040ez   You need to file a written protest in the following cases: All employee plan and exempt organization cases without regard to the dollar amount at issue. File taxes online 1040ez All partnership and S corporation cases without regard to the dollar amount at issue. File taxes online 1040ez All other cases, unless you qualify for the small case request procedure, or other special appeal procedures such as requesting Appeals consideration of liens, levies, seizures, or installment agreements. File taxes online 1040ez   If you must submit a written protest, see the instructions in Publication 5 about the information you need to provide. File taxes online 1040ez The IRS urges you to provide as much information as you can, as it will help speed up your appeal. File taxes online 1040ez That will save you both time and money. File taxes online 1040ez    Be sure to send the protest within the time limit specified in the letter you received. File taxes online 1040ez Small case request. File taxes online 1040ez   If the total amount for any tax period is not more than $25,000, you may make a small case request instead of filing a formal written protest. File taxes online 1040ez In figuring the total amount, include a proposed increase or decrease in tax (including penalties), or claimed refund. File taxes online 1040ez If you are making an offer in compromise, include total unpaid tax, penalty, and interest due. File taxes online 1040ez For a small case request, follow the instructions in our letter to you by sending a letter: Requesting Appeals consideration, Indicating the changes you do not agree with, and Indicating the reasons why you do not agree. File taxes online 1040ez Representation You can represent yourself at your appeals conference, or you can be represented by any federally authorized practitioner, including an attorney, a certified public accountant, an enrolled actuary, or an enrolled agent. File taxes online 1040ez If your representative attends a conference without you, he or she can receive or inspect confidential information only if you have filed a power of attorney or a tax information authorization. File taxes online 1040ez You can use a Form 2848 or any other properly written power of attorney or authorization. File taxes online 1040ez You can also bring witnesses to support your position. File taxes online 1040ez Confidentiality privilege. File taxes online 1040ez   Generally, the same confidentiality protection that you have with an attorney also applies to certain communications that you have with federally authorized practitioners. File taxes online 1040ez See Confidentiality privilege under If Your Return Is Examined , earlier. File taxes online 1040ez Appeals to the Courts If you and the IRS still disagree after the appeals conference, you may be entitled to take your case to the United States Tax Court, the United States Court of Federal Claims, or a United States District Court. File taxes online 1040ez These courts are independent of the IRS. File taxes online 1040ez If you elect to bypass the IRS's appeals system, you may be able to take your case to one of the courts listed above. File taxes online 1040ez However, a case petitioned to the United States Tax Court will normally be considered for settlement by an Appeals Officer before the Tax Court hears the case. File taxes online 1040ez If you unreasonably fail to pursue the IRS's appeals system, or if your case is intended primarily to cause a delay, or your position is frivolous or groundless, the Tax Court may impose a penalty of up to $25,000. File taxes online 1040ez See Appeal Within the IRS, earlier. File taxes online 1040ez Prohibition on requests to taxpayers to give up rights to bring civil action. File taxes online 1040ez   The Government cannot ask you to waive your right to sue the United States or a Government officer or employee for any action taken in connection with the tax laws. File taxes online 1040ez However, your right to sue can be waived if: You knowingly and voluntarily waive that right, The request to waive that right is made in writing to your attorney or other federally authorized practitioner, or The request is made in person and your attorney or other representative is present. File taxes online 1040ez Burden of proof. File taxes online 1040ez   For court proceedings resulting from examinations started after July 22, 1998, the IRS generally has the burden of proof for any factual issue if you have met the following requirements: You introduced credible evidence relating to the issue. File taxes online 1040ez You complied with all substantiation requirements of the Internal Revenue Code. File taxes online 1040ez You maintained all records required by the Internal Revenue Code. File taxes online 1040ez You cooperated with all reasonable requests by the IRS for information regarding the preparation and related tax treatment of any item reported on your tax return. File taxes online 1040ez You had a net worth of $7 million or less and not more than 500 employees at the time your tax liability is contested in any court proceeding if your tax return is for a corporation, partnership, or trust. File taxes online 1040ez    The burden of proof does not change on an issue when another provision of the tax laws requires a specific burden of proof with respect to that issue. File taxes online 1040ez Use of statistical information. File taxes online 1040ez   In the case of an individual, the IRS has the burden of proof in court proceedings based on any IRS reconstruction of income solely through the use of statistical information on unrelated taxpayers. File taxes online 1040ez Penalties. File taxes online 1040ez   The IRS has the burden of initially producing evidence in court proceedings with respect to the liability of any individual taxpayer for any penalty, addition to tax, or additional amount imposed by the tax laws. File taxes online 1040ez Recovering litigation or administrative costs. File taxes online 1040ez   These are the expenses that you pay to defend your position to the IRS or the courts. File taxes online 1040ez You may be able to recover reasonable litigation or administrative costs if all of the following conditions apply: You are the prevailing party. File taxes online 1040ez You exhaust all administrative remedies within the IRS. File taxes online 1040ez Your net worth is below a certain limit (see Net worth requirements , later). File taxes online 1040ez You do not unreasonably delay the proceeding. File taxes online 1040ez You apply for administrative costs within 90 days of the date on which the final decision of the IRS Office of Appeals as to the determination of the tax, interest, or penalty was mailed to you. File taxes online 1040ez You apply for litigation costs within the time frames provided by Tax Court Rule 231, found at http://www. File taxes online 1040ez ustaxcourt. File taxes online 1040ez gov  www. File taxes online 1040ez ustaxcourt. File taxes online 1040ez gov . File taxes online 1040ez   Prevailing party, reasonable litigation costs, and reasonable administrative costs are explained later. File taxes online 1040ez Note. File taxes online 1040ez If the IRS denies your award of administrative costs, and you want to appeal, you must petition the Tax Court within 90 days of the date on which the IRS mails the denial notice. File taxes online 1040ez Prevailing party. File taxes online 1040ez   Generally, you are the prevailing party if: You substantially prevail with respect to the amount in controversy or on the most significant tax issue or set of issues in question, and You meet the net worth requirements, discussed later. File taxes online 1040ez   You will not be treated as the prevailing party if the United States establishes that its position was substantially justified. File taxes online 1040ez The position of the United States is presumed not to be substantially justified if the IRS: Did not follow its applicable published guidance (such as regulations, revenue rulings, notices, announcements, private letter rulings, technical advice memoranda, and determination letters issued to the taxpayer) in the proceeding (This presumption can be overcome by evidence. File taxes online 1040ez ), or Has lost in courts of appeal for other circuits on substantially similar issues. File taxes online 1040ez   The court will generally decide who is the prevailing party. File taxes online 1040ez Reasonable litigation costs. File taxes online 1040ez   These include the following costs: Reasonable court costs. File taxes online 1040ez The reasonable costs of studies, analyses, engineering reports, tests, or projects found by the court to be necessary for the preparation of your case. File taxes online 1040ez The reasonable costs of expert witnesses. File taxes online 1040ez Attorney fees that generally may not exceed $125 maximum hourly rate as set by statute and indexed for inflation. File taxes online 1040ez See Attorney fees , later. File taxes online 1040ez Reasonable administrative costs. File taxes online 1040ez   These include the following costs: Any administrative fees or similar charges imposed by the IRS. File taxes online 1040ez The reasonable costs of studies, analyses, engineering reports, tests, or projects. File taxes online 1040ez The reasonable costs of expert witnesses. File taxes online 1040ez Attorney fees that generally may not exceed $125 per hour. File taxes online 1040ez See Attorney fees , later. File taxes online 1040ez Timing of costs. File taxes online 1040ez    Administrative costs can be awarded for costs incurred after the earliest of: The date the first letter of proposed deficiency is sent that allows you an opportunity to request administrative review in the IRS Office of Appeals, The date you receive notice of the IRS Office of Appeals' decision, or The date of the notice of deficiency. File taxes online 1040ez Net worth requirements. File taxes online 1040ez   An individual taxpayer may be able to recover litigation or administrative costs if the following requirements are met: For individuals — your net worth does not exceed $2 million as of the filing date of your petition for review. File taxes online 1040ez For this purpose, individuals filing a joint return are treated as separate individuals. File taxes online 1040ez For estates — your net worth does not exceed $2 million as of the date of the decedent's death. File taxes online 1040ez For charities and certain cooperatives — you do not have more than 500 employees as of the filing date of your petition for review. File taxes online 1040ez For all other taxpayers — as of the filing date of your petition for review, your net worth does not exceed $7 million, and you must not have more than 500 employees. File taxes online 1040ez Qualified offer rule. File taxes online 1040ez    You can also receive reasonable costs and fees and be treated as a prevailing party in a civil action or proceeding if: You make a qualified offer to the IRS to settle your case, The IRS does not accept that offer, and The tax liability (not including interest, unless interest is at issue) later determined by the court is equal to or less than the amount of your qualified offer. File taxes online 1040ez You must also meet the remaining requirements, including the exhaustion of administrative remedies and the net worth requirement, discussed earlier, to get the benefit of the qualified offer rule. File taxes online 1040ez Qualified offer. File taxes online 1040ez    This is a written offer made by you during the qualified offer period. File taxes online 1040ez It must specify both the offered amount of your liability (not including interest) and that it is a qualified offer. File taxes online 1040ez   To be a qualified offer, it must remain open from the date it is made until the earliest of: The date it is rejected, The date the trial begins, or 90 days from the date it is made. File taxes online 1040ez Qualified offer period. File taxes online 1040ez    This period begins on the day the IRS mails you the first letter of proposed deficiency that allows you to request review by the IRS Office of Appeals. File taxes online 1040ez It ends 30 days before your case is first set for trial. File taxes online 1040ez Attorney fees. File taxes online 1040ez   Attorney fees generally may not exceed $125 maximum hourly rate as set by statute and indexed for inflation. File taxes online 1040ez However, this amount can be higher in certain limited circumstances depending on the level of difficulty of the issues in the case and the local availability of tax expertise. File taxes online 1040ez See IRS. File taxes online 1040ez gov for more information. File taxes online 1040ez    Attorney fees include the fees paid by a taxpayer for the services of anyone who is authorized to practice before the Tax Court or before the IRS. File taxes online 1040ez In addition, attorney fees can be awarded in civil actions for unauthorized inspection or disclosure of a taxpayer's return or return information. File taxes online 1040ez   Fees can be awarded in excess of the actual amount charged if: You are represented for no fee, or for a nominal fee, as a pro bono service, and The award is paid to your representative or to your representative's employer. File taxes online 1040ez Jurisdiction for determination of employment status. File taxes online 1040ez    The Tax Court can review IRS employment status determinations (for example, whether individuals hired by you are in fact your employees or independent contractors) and the amount of employment tax under such determinations. File taxes online 1040ez Tax Court review can take place only if, in connection with an audit of any person, there is a controversy involving a determination by the IRS that either: One or more individuals performing services for that person are employees of that person, or That person is not entitled to relief under Section 530(a) of the Revenue Act of 1978 (discussed later). File taxes online 1040ez   The following rules also apply to a Tax Court review of employment status: A Tax Court petition to review these determinations can be filed only by the person for whom the services are performed, If you receive a Notice of Determination by certified or registered mail, you must file a petition for Tax Court review within 90 days of the date of mailing that notice (150 days if the notice is addressed to you outside the United States), If during the Tax Court proceeding, you begin to treat as an employee an individual whose employment status is at issue, the Tax Court will not consider that change in its decision, Assessment and collection of tax is suspended while the Tax Court review is taking place, Payment of the asserted employment tax deficiency is not required to petition the U. File taxes online 1040ez S. File taxes online 1040ez Tax Court for a determination of employment status. File taxes online 1040ez There can be a de novo review by the Tax Court (a review which does not consider IRS administrative findings), and At your request and with the Tax Court's agreement, small tax case procedures (discussed later) are available to simplify the case resolution process when the amount at issue (including additions to tax and penalties) is $50,000 or less for each tax period involved. File taxes online 1040ez   For further information, see Publication 3953, Questions and Answers About Tax Court Proceedings for Determination of Employment Status Under IRC Section 7436. File taxes online 1040ez Section 530(a) of the Revenue Act of 1978. File taxes online 1040ez   This section relieves an employer of certain employment tax responsibilities for individuals not treated as employees. File taxes online 1040ez It also provides relief to taxpayers under audit or involved in administrative or judicial proceedings. File taxes online 1040ez Tax Court review of request for relief from joint and several liability on a joint return. File taxes online 1040ez    As discussed later, at Relief from joint and several liability on a joint return under Claims for Refund, you can request relief from liability for tax you owe, plus related penalties and interest, that you believe should be paid by your spouse (or former spouse). File taxes online 1040ez You also can petition (ask) the Tax Court to review your request for innocent spouse relief or separation of liability if either: The IRS sends you a determination notice denying, in whole or in part, your request, or You do not receive a determination notice from the IRS within 6 months from the date you file Form 8857. File taxes online 1040ez   If you receive a determination notice, you must petition the Tax Court to review your request during the 90-day period that begins on the date the IRS mails the notice. File taxes online 1040ez See Publication 971 for more information. File taxes online 1040ez Note. File taxes online 1040ez Your spouse or former spouse may file a written protest and request an Appeals conference to protest your claim of innocent spouse relief or separation of liability. File taxes online 1040ez See Rev. File taxes online 1040ez Proc. File taxes online 1040ez 2003-19, which is on page 371 of the Internal Revenue Bulletin 2003-5 at  www. File taxes online 1040ez irs. File taxes online 1040ez gov/pub/irs-irbs/irb03-05. File taxes online 1040ez pdf. File taxes online 1040ez Tax Court You can take your case to the United States Tax Court if you disagree with the IRS over: Income tax, Estate tax, Gift tax, Employment tax involving IRS employment status determinations, or Certain excise taxes of private foundations, public charities, qualified pension and other retirement plans, or real estate investment trusts. File taxes online 1040ez For information on Tax Court review of a determination of employment status, see Jurisdiction for determination of employment status, earlier. File taxes online 1040ez For information on Tax Court review of an IRS refusal to abate interest, see Tax Court can review failure to abate interest, earlier under Examination of Returns. File taxes online 1040ez For information on Tax Court review of Appeals determinations with respect to lien notices and proposed levies, see Publication 1660. File taxes online 1040ez You cannot take your case to the Tax Court before the IRS sends you a notice of deficiency. File taxes online 1040ez You can only appeal your case if you file a petition within 90 days from the date the notice is mailed to you (150 days if it is addressed to you outside the United States). File taxes online 1040ez The notice will show the 90th (or 150th) day by which you must file your petition with the Tax Court. File taxes online 1040ez Withdrawal of notice of deficiency. File taxes online 1040ez If you consent, the IRS can withdraw a notice of deficiency. File taxes online 1040ez A notice of deficiency may be rescinded if the notice was issued as a result of an administrative error; the taxpayer submits information establishing the actual tax due is less than the amount shown in the notice; the taxpayer specifically requests a conference with the appropriate Appeals office for the purpose of entering into settlement negotiations. File taxes online 1040ez However, the notice may be rescinded only if the appropriate Appeals office first decides that the case is susceptible to agreement. File taxes online 1040ez See Revenue Procedure 98-54 for a more detailed explanation of the requirements. File taxes online 1040ez Once withdrawn, the limits on credits, refunds, and assessments concerning the notice are void, and you and the IRS have the rights and obligations that you had before the notice was issued. File taxes online 1040ez The suspension of any time limitation while the notice of deficiency was issued will not change when the notice is withdrawn. File taxes online 1040ez After the notice is withdrawn, you cannot file a petition with the Tax Court based on the notice. File taxes online 1040ez Also, the IRS can later issue a notice of deficiency in a greater or lesser amount than the amount in the withdrawn deficiency. File taxes online 1040ez Generally, the Tax Court hears cases before any tax has been assessed and paid; however, you can pay the tax after the notice of deficiency has been issued and still petition the Tax Court for review. File taxes online 1040ez If you do not file your petition on time, the proposed tax will be assessed, a bill will be sent, and you will not be able to take your case to the Tax Court. File taxes online 1040ez Under the law, you must pay the tax within 21 days (10 business days if the amount is $100,000 or more). File taxes online 1040ez Collection can proceed even if you think that the amount is excessive. File taxes online 1040ez Publication 594 explains IRS collection procedures. File taxes online 1040ez If you filed your petition on time, the court will schedule your case for trial at a location convenient to you. File taxes online 1040ez You can represent yourself before the Tax Court or you can be represented by anyone admitted to practice before that court. File taxes online 1040ez Small tax case procedure. File taxes online 1040ez   If the amount in your case is $50,000 or less for any 1 tax year or period, you can request that your case be handled under the small tax case procedure. File taxes online 1040ez If the Tax Court approves, you can present your case to the Tax Court for a decision that is final and that you cannot appeal. File taxes online 1040ez You can get more information regarding the small tax case procedure and other Tax Court matters from the United States Tax Court, 400 Second Street, N. File taxes online 1040ez W. File taxes online 1040ez , Washington, DC 20217. File taxes online 1040ez More information can be found on the Tax Court's website at www. File taxes online 1040ez ustaxcourt. File taxes online 1040ez gov. File taxes online 1040ez Motion to request redetermination of interest. File taxes online 1040ez   In certain cases, you can file a motion asking the Tax Court to redetermine the amount of interest on either an underpayment or an overpayment. File taxes online 1040ez You can do this only in a situation that meets all of the following requirements: The IRS has assessed a deficiency that was determined by the Tax Court. File taxes online 1040ez The assessment included interest. File taxes online 1040ez You have paid the entire amount of the deficiency plus the interest claimed by the IRS. File taxes online 1040ez The Tax Court has found that you made an overpayment. File taxes online 1040ez You must file the motion within one year after the decision of the Tax Court becomes final. File taxes online 1040ez District Court and Court of Federal Claims Generally, the District Courts and the Court of Federal Claims hear tax cases only after you have paid the entire tax and penalties, and filed a claim for a credit or refund. File taxes online 1040ez The taxpayer may litigate certain types of employment tax cases in either the United States District Court or the United States Court of Federal Claims. File taxes online 1040ez Before taxpayers can initiate suit in either of these courts with respect to certain employment taxes, they will have to pay, at a minimum, the employment tax assessment attributable to one employee for any one quarter and file a claim for refund of the tax. File taxes online 1040ez Once the claim for refund is denied or 6 months elapse without any action by the IRS, the taxpayer may initiate suit. File taxes online 1040ez As explained later under Claims for Refund, you can file a claim with the IRS for a credit or refund if you think that the tax you paid is incorrect or excessive. File taxes online 1040ez If your claim is totally or partially disallowed by the IRS, you should receive a notice of claim disallowance. File taxes online 1040ez If the IRS does not act on your claim within 6 months from the date you filed it, you can then file suit for a refund. File taxes online 1040ez You generally must file suit for a credit or refund no later than 2 years after the IRS informs you that your claim has been rejected. File taxes online 1040ez However, you can file suit if it has been 6 months since you filed your claim and the IRS has not yet delivered a decision. File taxes online 1040ez You can file suit for a credit or refund in your United States District Court or in the United States Court of Federal Claims. File taxes online 1040ez However, you cannot appeal to the United States Court of Federal Claims if your claim is for credit or refund of a penalty that relates to promoting an abusive tax shelter or to aiding and abetting the understatement of tax liability on someone else's return. File taxes online 1040ez For information about procedures for filing suit in either court, contact the Clerk of your District Court or of the United States Court of Federal Claims. File taxes online 1040ez Refund or Credit of Overpayments Before Final Determination Any court with proper jurisdiction, including the Tax Court, can order the IRS to refund any part of a tax deficiency that the IRS collects from you during a period when the IRS is not permitted to assess that deficiency, or to levy or engage in any court proceeding to collect that deficiency. File taxes online 1040ez In addition, the court can order a refund of any part of an overpayment determined by the Tax Court that is not at issue on appeal to a higher court. File taxes online 1040ez The court can order these refunds before its decision on the case is final. File taxes online 1040ez Taxpayers should thoroughly review IRS settlement offers before signing a Tax Court Decision document to ensure that all adjustments are correct, including the inclusion of any tax credits that the taxpayer is allowed to claim. File taxes online 1040ez Note. File taxes online 1040ez The court may no longer order a refund of an overpayment after the case is final. File taxes online 1040ez Generally, the IRS is not permitted to take action on a tax deficiency during: The 90-day (or 150-day if outside the United States) period that you have to petition a notice of deficiency to the Tax Court, or The period that the case is under appeal if a bond is provided. File taxes online 1040ez Claims for Refund If you believe you have overpaid your tax, you have a limited amount of time in which to file a claim for a credit or refund. File taxes online 1040ez You can claim a credit or refund by filing Form 1040X. File taxes online 1040ez See Time for Filing a Claim for Refund , later. File taxes online 1040ez File your claim by mailing it to the IRS Service Center where you filed your original return. File taxes online 1040ez File a separate form for each year or period involved. File taxes online 1040ez Include an explanation of each item of income, deduction, or credit on which you are basing your claim. File taxes online 1040ez Corporations should file Form 1120X, Amended U. File taxes online 1040ez S. File taxes online 1040ez Corporation Income Tax Return, or other form appropriate to the type of credit or refund claimed. File taxes online 1040ez See Publication 3920 for information on filing claims for tax forgiveness for individuals affected by terrorist attacks. File taxes online 1040ez Requesting a copy of your tax return. File taxes online 1040ez   You can obtain a copy of the actual return and all attachments you filed with the IRS for an earlier year. File taxes online 1040ez This includes a copy of the Form W-2 or Form 1099 filed with your return. File taxes online 1040ez Use Form 4506 to make your request. File taxes online 1040ez You will be charged a fee, which you must pay when you submit Form 4506. File taxes online 1040ez Requesting a copy of your tax account information. File taxes online 1040ez   Use Form 4506-T, Request for Transcript of Tax Return, to request free copies of your tax return transcript, tax account transcript, record of account, verification of nonfiling, or Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript. File taxes online 1040ez The tax return transcript contains most of the line items of a tax return. File taxes online 1040ez A tax account transcript contains information on the financial status of the account, such as payments, penalty assessments, and adjustments. File taxes online 1040ez A record of account is a combination of line item information and later adjustments to the account. File taxes online 1040ez Form W-2, Form 1099 series, Form 1098 series, or Form 5498 series transcript contains data from these information returns. File taxes online 1040ez Penalty for erroneous claim for refund. File taxes online 1040ez   If you claim an excessive amount of tax refund or credit relating to income tax (other than a claim relating to the earned income credit), you may be liable for a penalty of 20% of the amount that is determined to be excessive. File taxes online 1040ez An excessive amount is the amount of the claim for refund or credit that is more than the amount of claim allowable for the tax year. File taxes online 1040ez The penalty may be waived if you can show that you had a reasonable basis for making the claim. File taxes online 1040ez Time for Filing a Claim for Refund Generally, you must file a claim for a credit or refund within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. File taxes online 1040ez If you do not file a claim within this period, you may no longer be entitled to a credit or a refund. File taxes online 1040ez If the due date to file a return or a claim for a credit or refund is a Saturday, Sunday, or legal holiday, it is filed on time if it is filed on the next business day. File taxes online 1040ez Returns you filed before the due date are considered filed on the due date. File taxes online 1040ez This is true even when the due date is a Saturday, Sunday, or legal holiday. File taxes online 1040ez Disaster area claims for refund. File taxes online 1040ez   If you live in a Presidentially declared disaster area or are affected by terroristic or military action, the deadline to file a claim for a refund may be postponed. File taxes online 1040ez This section discusses the special rules that apply to Presidentially declared disaster area refunds. File taxes online 1040ez    A Presidentially declared disaster is a disaster that occurred in an area declared by the President to be eligible for federal assistance under the Disaster Relief and Emergency Assistance Act. File taxes online 1040ez Postponed refund deadlines. File taxes online 1040ez   The IRS may postpone for up to 1 year the deadlines for filing a claim for refund. File taxes online 1040ez The postponement can be used by taxpayers who are affected by a Presidentially declared disaster. File taxes online 1040ez The IRS may also postpone deadlines for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA. File taxes online 1040ez For more information, see Publication 547. File taxes online 1040ez   If any deadline is postponed, the IRS will publicize the postponement in your area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin. File taxes online 1040ez A list of the areas eligible for assistance under the Disaster Relief and Emergency Assistance Act is available at the Federal Emergency Management Agency (FEMA) website at www. File taxes online 1040ez fema. File taxes online 1040ez gov and at the IRS website at www. File taxes online 1040ez irs. File taxes online 1040ez gov. File taxes online 1040ez Nonfilers can get refund of overpayments paid within 3-year period. File taxes online 1040ez   The Tax Court can consider taxes paid during the 3-year period preceding the date of a notice of deficiency for determining any refund due to a nonfiler. File taxes online 1040ez This means that if you do not file your return, and you receive a notice of deficiency in the third year after the due date (with extensions) of your return and file suit with the Tax Court to contest the notice of deficiency, you may be able to receive a refund of excessive amounts paid within the 3-year period preceding the date of the notice of deficiency. File taxes online 1040ez The IRS may postpone for up to 1 year certain tax deadlines, including the time for filing claims for refund, for taxpayers who are affected by a terrorist attack occurring after September 10, 2001. File taxes online 1040ez For more information, see Publication 3920. File taxes online 1040ez Claim for refund by estates electing the installment method of payment. File taxes online 1040ez   In certain cases where an estate has elected to make tax payments through the installment method, the executor can file a suit for refund with a U. File taxes online 1040ez S. File taxes online 1040ez District Court or the U. File taxes online 1040ez S. File taxes online 1040ez Court of Federal Claims before all the installment payments have been made. File taxes online 1040ez However, all the following must be true before a suit can be filed: The estate consists largely of an interest in a closely-held business. File taxes online 1040ez All installment payments due on or before the date the suit is filed have been made. File taxes online 1040ez No accelerated installment payments have been made. File taxes online 1040ez No Tax Court case is pending with respect to any estate tax liability. File taxes online 1040ez If a notice of deficiency was issued to the estate regarding its liability for estate tax, the time for petitioning the Tax Court has passed. File taxes online 1040ez No proceeding is pending for a declaratory judgment by the Tax Court on whether the estate is eligible to pay tax in installments. File taxes online 1040ez The executor has not included any previously litigated issues in the current suit for refund. File taxes online 1040ez The executor does not discontinue making installment payments timely, while the court considers the suit for refund. File taxes online 1040ez    If in its final decision on the suit for refund the court redetermines the estate's tax liability, the IRS must refund any part of the estate tax amount that is disallowed. File taxes online 1040ez This includes any part of the disallowed amount previously collected by the IRS. File taxes online 1040ez Protective claim for refund. File taxes online 1040ez   If your right to a refund is contingent on future events and may not be determinable until after the time period for filing a claim for refund expires, you can file a protective claim for refund. File taxes online 1040ez A protective claim can be either a formal claim or an amended return for credit or refund. File taxes online 1040ez Protective claims are often based on current litigation or expected changes in the tax law, other legislation, or regulations. File taxes online 1040ez A protective claim preserves your right to claim a refund when the contingency is resolved. File taxes online 1040ez A protective claim does not have to state a particular dollar amount or demand an immediate refund. File taxes online 1040ez However, to be valid, a protective claim must: Be in writing and be signed, Include your name, address, social security number or individual taxpayer identification number, and other contact information, Identify and describe the contingencies affecting the claim, Clearly alert the IRS to the essential nature of the claim, and Identify the specific year(s) for which a refund is sought. File taxes online 1040ez   Generally, the IRS will delay action on the protective claim until the contingency is resolved. File taxes online 1040ez Once the contingency is resolved, the IRS may obtain additional information necessary to process the claim and then either allow or disallow the claim. File taxes online 1040ez   Mail your protective claim for refund to the address listed in the instructions for Form 1040X, under Where To File. File taxes online 1040ez Exceptions The limits on your claim for refund can be affected by the type of item that forms the basis of your claim. File taxes online 1040ez Special refunds. File taxes online 1040ez   If you file a claim for refund based on one of the items listed below, the limits discussed earlier under Time for Filing a Claim for Refund may not apply. File taxes online 1040ez These special items are: A bad debt, A worthless security, A payment or accrual of foreign tax, A net operating loss carryback, and A carryback of certain tax credits. File taxes online 1040ez   The limits discussed earlier also may not apply if you have signed an agreement to extend the period of assessment of tax. File taxes online 1040ez For information on special rules on filing claims for an individual affected by a terrorist attack, see Publication 3920. File taxes online 1040ez Periods of financial disability. File taxes online 1040ez   If you are an individual (not a corporation or other taxpaying entity), the period of limitations on credits and refunds can be suspended during periods when you cannot manage your financial affairs because of physical or mental impairment that is medically determinable and either: Has lasted or can be expected to last continuously for at least 12 months, or Can be expected to result in death. File taxes online 1040ez    The period for filing a claim for refund will not be suspended for any time that someone else, such as your spouse or guardian, was authorized to act for you in financial matters. File taxes online 1040ez   To claim financial disability, you generally must submit the following statements with your claim for credit or refund: A written statement signed by a physician, qualified to make the determination, that sets forth: The name and a description of your physical or mental impairment, The physician's medical opinion that your physical or mental impairment prevented you from managing your financial affairs, The physician's medical opinion that your physical or mental impairment was or can be expected to result in death, or that it has lasted (or can be expected to last) for a continuous period of not less than 12 months, and To the best of the physician's knowledge, the specific time period during which you were prevented by such physical or mental impairment from managing your financial affairs, and A written statement by the person signing the claim for credit or refund that no person, including your spouse, was authorized to act on your behalf in financial matters during the period described in paragraph (1)(d) of the physician's statement. File taxes online 1040ez Alternatively, if a person was authorized to act on your behalf in financial matters during any part of the period described in that paragraph, the beginning and ending dates of the period of time the person was so authorized. File taxes online 1040ez    The period of limitations will not be suspended on any claim for refund that (without regard to this provision) was barred as of July 22, 1998. File taxes online 1040ez Limit on Amount of Refund If you file your claim within 3 years after filing your return, the credit or refund cannot be more than the part of the tax paid wi