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Need To File 2012 Taxes Late

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Need To File 2012 Taxes Late

Need to file 2012 taxes late 10. Need to file 2012 taxes late   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents Full-time student. Need to file 2012 taxes late Adjusted gross income. Need to file 2012 taxes late Distributions received by spouse. Need to file 2012 taxes late Testing period. Need to file 2012 taxes late If you or your employer make eligible contributions (defined later) to a retirement plan, you may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). Need to file 2012 taxes late This credit could reduce the federal income tax you pay dollar for dollar. Need to file 2012 taxes late Can you claim the credit?   If you or your employer make eligible contributions to a retirement plan, you can claim the credit if all of the following apply. Need to file 2012 taxes late You are not under age 18. Need to file 2012 taxes late You are not a full-time student (explained next). Need to file 2012 taxes late No one else, such as your parent(s), claims an exemption for you on their tax return. Need to file 2012 taxes late Your adjusted gross income (defined later) is not more than: $59,000 for 2013 ($60,000 for 2014) if your filing status is married filing jointly, $44,250 for 2013 ($45,000 for 2014) if your filing status is head of household (with qualifying person), or $29,500 for 2013 ($30,000 for 2014) if your filing status is single, married filing separately, or qualifying widow(er) with dependent child. Need to file 2012 taxes late Full-time student. Need to file 2012 taxes late   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. Need to file 2012 taxes late You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full-time. Need to file 2012 taxes late Adjusted gross income. Need to file 2012 taxes late   This is generally the amount on line 38 of your 2013 Form 1040 or line 22 of your 2013 Form 1040A. Need to file 2012 taxes late However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. Need to file 2012 taxes late Eligible contributions. Need to file 2012 taxes late   These include: Contributions to a traditional or Roth IRA, Elective deferrals, including amounts designated as after-tax Roth contributions, to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. Need to file 2012 taxes late They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or a section 403(b) annuity. Need to file 2012 taxes late For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. Need to file 2012 taxes late Reducing eligible contributions. Need to file 2012 taxes late   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included earlier under Eligible contributions. Need to file 2012 taxes late Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. Need to file 2012 taxes late      Do not reduce your eligible contributions by any of the following: The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. Need to file 2012 taxes late Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. Need to file 2012 taxes late Loans from a qualified employer plan treated as a distribution. Need to file 2012 taxes late Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). Need to file 2012 taxes late Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). Need to file 2012 taxes late Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. Need to file 2012 taxes late Distributions from a military retirement plan. Need to file 2012 taxes late Distributions received by spouse. Need to file 2012 taxes late   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. Need to file 2012 taxes late Testing period. Need to file 2012 taxes late   The testing period consists of: The year in which you claim the credit, The 2 years before the year in which you claim the credit, and The period after the end of the year in which you claim the credit and before the due date of the return (including extensions) for filing your return for the year in which you claimed the credit. Need to file 2012 taxes late Example. Need to file 2012 taxes late You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. Need to file 2012 taxes late You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible section 457(b) deferred compensation plan in 2012. Need to file 2012 taxes late Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. Need to file 2012 taxes late You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. Need to file 2012 taxes late You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you and your spouse received in 2011, 2012, 2013, and 2014. Need to file 2012 taxes late Maximum eligible contributions. Need to file 2012 taxes late   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. Need to file 2012 taxes late Effect on other credits. Need to file 2012 taxes late   The amount of this credit will not change the amount of your refundable tax credits. Need to file 2012 taxes late A refundable tax credit, such as the earned income credit or the additional child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. Need to file 2012 taxes late Maximum credit. Need to file 2012 taxes late   This is a nonrefundable credit. Need to file 2012 taxes late The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits or the adoption credit) in any year. Need to file 2012 taxes late If your tax liability is reduced to zero because of other nonrefundable credits, such as the education credits, then you will not be entitled to this credit. Need to file 2012 taxes late How to figure and report the credit. Need to file 2012 taxes late   The amount of the credit you can get is based on the contributions you make and your credit rate. Need to file 2012 taxes late The credit rate can be as low as 10% or as high as 50%. Need to file 2012 taxes late Your credit rate depends on your income and your filing status. Need to file 2012 taxes late See Form 8880, Credit for Qualified Retirement Savings Contributions, to determine your credit rate. Need to file 2012 taxes late   The maximum contribution taken into account is $2,000 per person. Need to file 2012 taxes late On a joint return, up to $2,000 is taken into account for each spouse. Need to file 2012 taxes late   Figure the credit on Form 8880. Need to file 2012 taxes late Report the credit on line 50 of your Form 1040 or line 32 of your Form 1040A, and attach Form 8880 to your return. Need to file 2012 taxes late Prev  Up  Next   Home   More Online Publications
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Understanding your CP02H Notice

You owe a balance due as a result of amending your tax return to show receipt of a grant received as a result of Hurricane Katrina, Rita or Wilma.

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If interest is charged, will it be computed from the original due date of the return?
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The Need To File 2012 Taxes Late

Need to file 2012 taxes late 2. Need to file 2012 taxes late   Tax Shelters and Other Reportable Transactions Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Abusive Tax SheltersRules To Curb Abusive Tax Shelters Investor Reporting Penalties Whether To Invest Introduction Investments that yield tax benefits are sometimes called “tax shelters. Need to file 2012 taxes late ” In some cases, Congress has concluded that the loss of revenue is an acceptable side effect of special tax provisions designed to encourage taxpayers to make certain types of investments. Need to file 2012 taxes late In many cases, however, losses from tax shelters produce little or no benefit to society, or the tax benefits are exaggerated beyond those intended. Need to file 2012 taxes late Those cases are called “abusive tax shelters. Need to file 2012 taxes late ” An investment that is considered a tax shelter is subject to restrictions, including the requirement that it be disclosed, as discussed later. Need to file 2012 taxes late Topics - This chapter discusses: Abusive Tax Shelters , Rules To Curb Abusive Tax Shelters , Investor Reporting , Penalties , and Whether To Invest . Need to file 2012 taxes late Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 556 Examination of Returns, Appeal Rights, and Claims for Refund 561 Determining the Value of Donated Property 925 Passive Activity and At-Risk Rules Form (and Instructions) 8275 Disclosure Statement 8275-R Regulation Disclosure Statement 8283 Noncash Charitable Contributions 8886 Reportable Transaction Disclosure Statement See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Need to file 2012 taxes late Abusive Tax Shelters Abusive tax shelters are marketing schemes involving artificial transactions with little or no economic reality. Need to file 2012 taxes late They often make use of unrealistic allocations, inflated appraisals, losses in connection with nonrecourse loans, mismatching of income and deductions, financing techniques that do not conform to standard commercial business practices, or mischaracterization of the substance of the transaction. Need to file 2012 taxes late Despite appearances to the contrary, the taxpayer generally risks little. Need to file 2012 taxes late Abusive tax shelters commonly involve package deals designed from the start to generate losses, deductions, or credits that will be far more than present or future investment. Need to file 2012 taxes late Or, they may promise investors from the start that future inflated appraisals will enable them, for example, to reap charitable contribution deductions based on those appraisals. Need to file 2012 taxes late (But see the appraisal requirements discussed under Rules To Curb Abusive Tax Shelters , later. Need to file 2012 taxes late ) They are commonly marketed in terms of the ratio of tax deductions allegedly available to each dollar invested. Need to file 2012 taxes late This ratio (or “write-off”) is frequently said to be several times greater than one-to-one. Need to file 2012 taxes late Because there are many abusive tax shelters, it is not possible to list all the factors you should consider in determining whether an offering is an abusive tax shelter. Need to file 2012 taxes late However, you should ask the following questions, which might provide a clue to the abusive nature of the plan. Need to file 2012 taxes late Do the tax benefits far outweigh the economic benefits? Is this a transaction you would seriously consider, apart from the tax benefits, if you hoped to make a profit? Do shelter assets really exist and, if so, are they insured for less than their purchase price? Is there a nontax justification for the way profits and losses are allocated to partners? Do the facts and supporting documents make economic sense? In that connection, are there sales and resales of the tax shelter property at ever increasing prices? Does the investment plan involve a gimmick, device, or sham to hide the economic reality of the transaction? Does the promoter offer to backdate documents after the close of the year? Are you instructed to backdate checks covering your investment? Is your debt a real debt or are you assured by the promoter that you will never have to pay it? Does this transaction involve laundering United States source income through foreign corporations incorporated in a tax haven and owned by United States shareholders? Rules To Curb Abusive Tax Shelters Congress has enacted a series of income tax laws designed to halt the growth of abusive tax shelters. Need to file 2012 taxes late These provisions include the following. Need to file 2012 taxes late Disclosure of reportable transactions. Need to file 2012 taxes late   You must disclose information for each reportable transaction in which you participate. Need to file 2012 taxes late See Reportable Transaction Disclosure Statement , later. Need to file 2012 taxes late   Material advisors with respect to any reportable transaction must disclose information about the transaction on Form 8918, Material Advisor Disclosure Statement. Need to file 2012 taxes late To determine whether you are a material advisor to a transaction, see the Instructions for Form 8918. Need to file 2012 taxes late   Material advisors will receive a reportable transaction number for the disclosed reportable transaction. Need to file 2012 taxes late They must provide this number to all persons to whom they acted as a material advisor. Need to file 2012 taxes late They must provide the number at the time the transaction is entered into. Need to file 2012 taxes late If they do not have the number at that time, they must provide it within 60 days from the date the number is mailed to them. Need to file 2012 taxes late For information on penalties for failure to disclose and failure to maintain lists, see Internal Revenue Code sections 6707, 6707A, and 6708. Need to file 2012 taxes late Requirement to maintain list. Need to file 2012 taxes late   Material advisors must maintain a list of persons to whom they provide material aid, assistance, or advice on any reportable transaction. Need to file 2012 taxes late The list must be available for inspection by the IRS, and the information required to be included on the list generally must be kept for 7 years. Need to file 2012 taxes late See Regulations section 301. Need to file 2012 taxes late 6112-1 for more information (including what information is required to be included on the list). Need to file 2012 taxes late Confidentiality privilege. Need to file 2012 taxes late   The confidentiality privilege between you and a federally authorized tax practitioner does not apply to written communications made after October 21, 2004, regarding the promotion of your direct or indirect participation in any tax shelter. Need to file 2012 taxes late Appraisal requirement for donated property. Need to file 2012 taxes late   If you claim a deduction of more than $5,000 for an item or group of similar items of donated property, you generally must get a qualified appraisal from a qualified appraiser and complete and attach section B of Form 8283 to your return. Need to file 2012 taxes late If you claim a deduction of more than $500,000 for the donated property, you generally must attach the qualified appraisal to your return. Need to file 2012 taxes late If you file electronically, see Form 8453, U. Need to file 2012 taxes late S. Need to file 2012 taxes late Individual Income Tax Transmittal for an IRS e-file Return, and its instructions. Need to file 2012 taxes late For more information about appraisals, including exceptions, see Publication 561. Need to file 2012 taxes late Passive activity loss and credit limits. Need to file 2012 taxes late   The passive activity loss and credit rules limit the amount of losses and credits that can be claimed from passive activities and limit the amount that can offset nonpassive income, such as certain portfolio income from investments. Need to file 2012 taxes late For more detailed information about determining and reporting income, losses, and credits from passive activities, see Publication 925. Need to file 2012 taxes late Interest on penalties. Need to file 2012 taxes late   If you are assessed an accuracy-related or civil fraud penalty (as discussed under Penalties , later), interest will be imposed on the amount of the penalty from the due date of the return (including any extensions) to the date you pay the penalty. Need to file 2012 taxes late Accounting method restriction. Need to file 2012 taxes late   Tax shelters generally cannot use the cash method of accounting. Need to file 2012 taxes late Uniform capitalization rules. Need to file 2012 taxes late   The uniform capitalization rules generally apply to producing property or acquiring it for resale. Need to file 2012 taxes late Under those rules, the direct cost and part of the indirect cost of the property must be capitalized or included in inventory. Need to file 2012 taxes late For more information, see Publication 538. Need to file 2012 taxes late Denial of deduction for interest on an underpayment due to a reportable transaction. Need to file 2012 taxes late   You cannot deduct any interest you paid or accrued on any part of an underpayment of tax due to an understatement arising from a reportable transaction (discussed later) if the relevant facts affecting the tax treatment of the item are not adequately disclosed. Need to file 2012 taxes late This rule applies to reportable transactions entered into in tax years beginning after October 22, 2004. Need to file 2012 taxes late Authority for Disallowance of Tax Benefits The IRS has published guidance concluding that the claimed tax benefits of various abusive tax shelters should be disallowed. Need to file 2012 taxes late The guidance is the conclusion of the IRS on how the law is applied to a particular set of facts. Need to file 2012 taxes late Guidance is published in the Internal Revenue Bulletin for taxpayers' information and also for use by IRS officials. Need to file 2012 taxes late So, if your return is examined and an abusive tax shelter is identified and challenged, published guidance dealing with that type of shelter, which disallows certain claimed tax shelter benefits, could serve as the basis for the examining official's challenge of the tax benefits you claimed. Need to file 2012 taxes late In such a case, the examiner will not compromise even if you or your representative believes you have authority for the positions taken on your tax return. Need to file 2012 taxes late The courts have generally been unsympathetic to taxpayers involved in abusive tax shelter schemes and have ruled in favor of the IRS in the majority of the cases in which these shelters have been challenged. Need to file 2012 taxes late Investor Reporting You may be required to file a reportable transaction disclosure statement. Need to file 2012 taxes late Reportable Transaction Disclosure Statement Use Form 8886 to disclose information for each reportable transaction (discussed later) in which you participated. Need to file 2012 taxes late Generally, you must attach Form 8886 to your return for each tax year in which you participated in the transaction. Need to file 2012 taxes late Under certain circumstances, a transaction must be disclosed within 90 days of the transaction being identified as a listed transaction or a transaction of interest (discussed later). Need to file 2012 taxes late In addition, for the first year Form 8886 is attached to your return, you must send a copy of the form to: Internal Revenue Service OTSA Mail Stop 4915 1973 North Rulon White Blvd. Need to file 2012 taxes late  Ogden, UT 84404 If you file your return electronically, the copy sent to OTSA must show exactly the same information, word for word, provided with the electronically filed return and it must be provided on the official IRS Form 8886 or an exact copy of the form. Need to file 2012 taxes late If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form. Need to file 2012 taxes late If you fail to file Form 8886 as required or fail to include any required information on the form, you may have to pay a penalty. Need to file 2012 taxes late See Penalty for failure to disclose a reportable transaction , later under Penalties. Need to file 2012 taxes late The following discussion briefly describes reportable transactions. Need to file 2012 taxes late For more details, see the Instructions for Form 8886. Need to file 2012 taxes late Reportable transaction. Need to file 2012 taxes late   A reportable transaction is any of the following. Need to file 2012 taxes late A listed transaction. Need to file 2012 taxes late A confidential transaction. Need to file 2012 taxes late A transaction with contractual protection. Need to file 2012 taxes late A loss transaction. Need to file 2012 taxes late A transaction of interest entered into after November 1, 2006. Need to file 2012 taxes late Note. Need to file 2012 taxes late Transactions with a brief asset holding period were removed from the definition of reportable transaction for transactions entered into after August 2, 2007. Need to file 2012 taxes late Listed transaction. Need to file 2012 taxes late   A listed transaction is the same as, or substantially similar to, one of the types of transactions the IRS has determined to be a tax-avoidance transaction. Need to file 2012 taxes late These transactions have been identified in notices, regulations, and other published guidance issued by the IRS. Need to file 2012 taxes late For a list of existing guidance, see Notice 2009-59 in Internal Revenue Bulletin 2009-31, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2009-31_IRB/ar07. Need to file 2012 taxes late html. Need to file 2012 taxes late Confidential transaction. Need to file 2012 taxes late   A confidential transaction is offered to you under conditions of confidentiality and for which you have paid an advisor a minimum fee. Need to file 2012 taxes late A transaction is offered under conditions of confidentiality if the advisor who is paid the fee places a limit on your disclosure of the tax treatment or tax structure of the transaction and the limit protects the confidentiality of the advisor's tax strategies. Need to file 2012 taxes late The transaction is treated as confidential even if the conditions of confidentiality are not legally binding on you. Need to file 2012 taxes late Transaction with contractual protection. Need to file 2012 taxes late   Generally, a transaction with contractual protection is one in which you or a related party has the right to a full or partial refund of fees if all or part of the intended tax consequences of the transaction are not sustained, or a transaction for which the fees are contingent on your realizing the tax benefits from the transaction. Need to file 2012 taxes late For information on exceptions, see Revenue Procedure 2007-20 in Internal Revenue Bulletin 2007-7, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2007-07_IRB/ar15. Need to file 2012 taxes late html. Need to file 2012 taxes late Loss transaction. Need to file 2012 taxes late   For individuals, a loss transaction is one that results in a deductible loss if the gross amount of the loss is at least $2 million in a single tax year or $4 million in any combination of tax years. Need to file 2012 taxes late A loss from a foreign currency transaction under Internal Revenue Code section 988 is a loss transaction if the gross amount of the loss is at least $50,000 in a single tax year, whether or not the loss flows through from an S corporation or partnership. Need to file 2012 taxes late   Certain losses (such as losses from casualties, thefts, and condemnations) are excepted from this category and do not have to be reported on Form 8886. Need to file 2012 taxes late For information on other exceptions, see Revenue Procedure 2004-66 in Internal Revenue Bulletin 2004-50, as modified and superseded by Revenue Procedure 2013-11, (or future published guidance) available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2004-50_IRB/ar11. Need to file 2012 taxes late html. Need to file 2012 taxes late Transaction of interest. Need to file 2012 taxes late   A transaction of interest is a transaction entered into after November 1, 2006, that is the same as, or substantially similar to, one of the types of transactions that the IRS has identified by notice, regulation, or other form of published guidance as a transaction of interest. Need to file 2012 taxes late The IRS has identified the following transactions of interest. Need to file 2012 taxes late “Toggling” grantor trusts as described in Notice 2007-73, 2007-36 I. Need to file 2012 taxes late R. Need to file 2012 taxes late B. Need to file 2012 taxes late 545, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2007-36_IRB/ar20. Need to file 2012 taxes late html. Need to file 2012 taxes late Certain transactions involving contributions of a successor member interest in a limited liability company as described in Notice 2007-72, 2007-36 I. Need to file 2012 taxes late R. Need to file 2012 taxes late B. Need to file 2012 taxes late 544, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2007-36_IRB/ar19. Need to file 2012 taxes late html. Need to file 2012 taxes late Certain transactions involving the sale or other disposition of all interests in a charitable remainder trust and claiming little or no taxable gain as described in Notice 2008-99, 2008-47 I. Need to file 2012 taxes late R. Need to file 2012 taxes late B. Need to file 2012 taxes late 1194, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2008-47_IRB/ar11. Need to file 2012 taxes late html. Need to file 2012 taxes late Certain transactions involving a U. Need to file 2012 taxes late S. Need to file 2012 taxes late taxpayer owning controlled foreign corporations (CFCs) that hold stock of a lower-tier CFC through a domestic partnership to avoid reporting income as described in Notice 2009-7, 2009-3 I. Need to file 2012 taxes late R. Need to file 2012 taxes late B. Need to file 2012 taxes late 312, available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2009-03_IRB/ar10. Need to file 2012 taxes late html. Need to file 2012 taxes late   For updates to this list, go to www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/Businesses/Corporations/Abusive-Tax-Shelters-and-Transactions. Need to file 2012 taxes late Penalties Investing in an abusive tax shelter may lead to substantial expenses. Need to file 2012 taxes late First, the promoter generally charges a substantial fee. Need to file 2012 taxes late If your return is examined by the IRS and a tax deficiency is determined, you will be faced with payment of more tax, interest on the underpayment, possibly a 20%, 30%, or even 40% accuracy-related penalty, or a 75% civil fraud penalty. Need to file 2012 taxes late You may also be subject to the penalty for failure to pay tax. Need to file 2012 taxes late These penalties are explained in the following paragraphs. Need to file 2012 taxes late Accuracy-related penalties. Need to file 2012 taxes late   An accuracy-related penalty of 20% can be imposed for underpayments of tax due to: Negligence or disregard of rules or regulations, Substantial understatement of tax, Substantial valuation misstatement (increased to 40% for gross valuation misstatement), Transaction lacking economic substance (increased to 40% for undisclosed transaction lacking economic substance), or Undisclosed foreign financial asset understatement (40% in all cases). Need to file 2012 taxes late Except for a transaction lacking economic substance, this penalty will not be imposed if you can show you had reasonable cause for any understatement of tax and that you acted in good faith. Need to file 2012 taxes late Your failure to disclose a reportable transaction is a strong indication that you failed to act in good faith. Need to file 2012 taxes late   If you are charged an accuracy-related penalty, interest will be imposed on the amount of the penalty from the due date of the return (including extensions) to the date you pay the penalty. Need to file 2012 taxes late   The 20% penalties do not apply to any underpayment attributable to a reportable transaction understatement subject to an accuracy-related penalty (discussed later). Need to file 2012 taxes late Negligence or disregard of rules or regulations. Need to file 2012 taxes late   The penalty for negligence or disregard of rules or regulations is imposed only on the part of the underpayment due to negligence or disregard of rules or regulations. Need to file 2012 taxes late The penalty will not be charged if you can show you had reasonable cause for understating your tax and that you acted in good faith. Need to file 2012 taxes late    Negligence includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Need to file 2012 taxes late It also includes any failure to keep adequate books and records. Need to file 2012 taxes late A return position that has a reasonable basis is not negligence. Need to file 2012 taxes late   Disregard includes any careless, reckless, or intentional disregard of rules or regulations. Need to file 2012 taxes late   The penalty for disregard of rules and regulations can be avoided if all the following are true. Need to file 2012 taxes late You keep adequate books and records. Need to file 2012 taxes late You have a reasonable basis for your position on the tax issue. Need to file 2012 taxes late You make an adequate disclosure of your position. Need to file 2012 taxes late Use Form 8275 to make your disclosure and attach it to your return. Need to file 2012 taxes late To disclose a position contrary to a regulation, use Form 8275-R. Need to file 2012 taxes late Use Form 8886 to disclose a reportable transaction (discussed earlier). Need to file 2012 taxes late Substantial understatement of tax. Need to file 2012 taxes late   An understatement is considered to be substantial if it is more than the greater of: 10% of the tax required to be shown on the return, or $5,000. Need to file 2012 taxes late An “understatement” is the amount of tax required to be shown on your return for a tax year minus the amount of tax shown on the return, reduced by any rebates. Need to file 2012 taxes late The term “rebate” generally means a decrease in the tax shown on your original return as the result of your filing an amended return or claim for refund. Need to file 2012 taxes late   For items other than tax shelters, you can file Form 8275 or Form 8275-R to disclose items that could cause a substantial understatement of income tax. Need to file 2012 taxes late In that way, you can avoid the substantial understatement penalty if you have a reasonable basis for your position on the tax issue. Need to file 2012 taxes late Disclosure of the tax shelter item on a tax return does not reduce the amount of the understatement. Need to file 2012 taxes late   Also, the understatement penalty will not be imposed if you can show there was reasonable cause for the underpayment caused by the understatement and that you acted in good faith. Need to file 2012 taxes late An important factor in establishing reasonable cause and good faith will be the extent of your effort to determine your proper tax liability under the law. Need to file 2012 taxes late Substantial valuation misstatement. Need to file 2012 taxes late   In general, you are liable for a 20% penalty for a substantial valuation misstatement if all the following are true. Need to file 2012 taxes late The value or adjusted basis of any property claimed on the return is 150% or more of the correct amount. Need to file 2012 taxes late You underpaid your tax by more than $5,000 because of the misstatement. Need to file 2012 taxes late You cannot establish that you had reasonable cause for the underpayment and that you acted in good faith. Need to file 2012 taxes late   You may be assessed a penalty of 40% for a gross valuation misstatement. Need to file 2012 taxes late If you misstate the value or the adjusted basis of property by 200% or more of the amount determined to be correct, you will be assessed a penalty of 40%, instead of 20%, of the amount you underpaid because of the gross valuation misstatement. Need to file 2012 taxes late The penalty rate is also 40% if the property's correct value or adjusted basis is zero. Need to file 2012 taxes late Transaction lacking economic substance. Need to file 2012 taxes late   The economic substance doctrine only applies to an individual that entered into a transaction in connection with a trade or business or an activity engaged in for the production of income. Need to file 2012 taxes late For transactions entered into after March 30, 2010, a transaction has economic substance for you as an individual taxpayer only if: The transaction changes your economic position in a meaningful way (apart from federal income tax effects), or You have a substantial purpose (apart from federal income tax effects) for entering into the transaction. Need to file 2012 taxes late   For purposes of determining whether economic substance exists, a transaction's profit potential will only be taken into account if the present value of the reasonably expected pre-tax profit from the transaction is substantial compared to the present value of the expected net tax benefits that would be allowed if the transaction were respected. Need to file 2012 taxes late   If any part of your underpayment is due to any disallowance of claimed tax benefits by reason of a transaction lacking economic substance or failing to meet the requirements of any similar rule of law, that part of your underpayment will be subject to the 20% accuracy-related penalty even if you had a reasonable cause and acted in good faith concerning that part. Need to file 2012 taxes late   Additionally, the penalty increases to 40% if you do not adequately disclose on your return or in a statement attached to your return the relevant facts affecting the tax treatment of a transaction that lacks economic substance. Need to file 2012 taxes late Relevant facts include any facts affecting the tax treatment of the transaction. Need to file 2012 taxes late    Any excessive amount of an erroneous claim for an income tax refund or credit (other than a refund or credit related to the earned income credit) that results from a transaction found to be lacking economic substance will not be treated as having a reasonable basis and could be subject to a 20% penalty. Need to file 2012 taxes late Undisclosed foreign financial asset understatement. Need to file 2012 taxes late   For tax years beginning after March 18, 2010, you may be liable for a 40% penalty for an understatement of your tax liability due to an undisclosed foreign financial asset. Need to file 2012 taxes late An undisclosed foreign financial asset is any asset for which an information return, required to be provided under Internal Revenue Code section 6038, 6038B, 6038D, 6046A, or 6048 for any taxable year, is not provided. Need to file 2012 taxes late The penalty applies to any part of an underpayment related to the following undisclosed foreign financial assets. Need to file 2012 taxes late Any foreign business you control, reportable on Form 5471, Information Return of U. Need to file 2012 taxes late S. Need to file 2012 taxes late Persons With Respect To Certain Foreign Corporations, or Form 8865, Return of U. Need to file 2012 taxes late S. Need to file 2012 taxes late Persons With Respect to Certain Foreign Partnerships. Need to file 2012 taxes late Certain transfers of property to a foreign corporation or partnership, reportable on Form 926, Return by a U. Need to file 2012 taxes late S. Need to file 2012 taxes late Transferor of Property to a Foreign Corporation, or certain distributions to a foreign person, reportable on Form 8865. Need to file 2012 taxes late Your ownership interest in certain foreign financial assets, temporarily reportable on Form 8275 or 8275-R. Need to file 2012 taxes late    Instead of, or in addition to, Form 8275 or 8275-R, you may have to file Form 8938, Statement of Specified Foreign Financial Assets, with your tax return. Need to file 2012 taxes late See the Instructions for Form 8938 for details. Need to file 2012 taxes late    Your acquisition, disposition, or substantial change in ownership interest in a foreign partnership, reportable on Form 8865. Need to file 2012 taxes late Creation or transfer of money or property to certain foreign trusts, reportable on Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Need to file 2012 taxes late Penalty for incorrect appraisals. Need to file 2012 taxes late   The person who prepares an appraisal of the value of property may have to pay a penalty if: He or she knows, or reasonably should have known, that the appraisal would be used in connection with a return or claim for refund; and The claimed value of the property on a return or claim for refund based on that appraisal results in a substantial valuation misstatement or a gross valuation misstatement as discussed earlier. Need to file 2012 taxes late For details on the penalty amount and exceptions, see Publication 561. Need to file 2012 taxes late Penalty for failure to disclose a reportable transaction. Need to file 2012 taxes late   If you fail to include any required information regarding a reportable transaction (discussed earlier) on a return or statement, you may have to pay a penalty of 75% of the decrease in tax shown on your return as a result of such transaction (or that would have resulted if the transaction were respected for federal tax purposes). Need to file 2012 taxes late For an individual, the minimum penalty is $5,000 and the maximum is $10,000 (or $100,000 for a listed transaction). Need to file 2012 taxes late This penalty is in addition to any other penalty that may be imposed. Need to file 2012 taxes late   The IRS may rescind or abate the penalty for failing to disclose a reportable transaction under certain limited circumstances but cannot rescind the penalty for failing to disclose a listed transaction. Need to file 2012 taxes late For information on rescission, see Revenue Procedure 2007-21 in Internal Revenue Bulletin 2007-9 available at www. Need to file 2012 taxes late irs. Need to file 2012 taxes late gov/irb/2007-09_IRB/ar12. Need to file 2012 taxes late html. Need to file 2012 taxes late Accuracy-related penalty for a reportable transaction understatement. Need to file 2012 taxes late   If you have a reportable transaction understatement, you may have to pay a penalty equal to 20% of the amount of that understatement. Need to file 2012 taxes late This applies to any item due to a listed transaction or other reportable transaction with a significant purpose of avoiding or evading federal income tax. Need to file 2012 taxes late The penalty is 30% rather than 20% for the part of any reportable transaction understatement if the transaction was not properly disclosed. Need to file 2012 taxes late You may not have to pay the 20% penalty if you meet the strengthened reasonable cause and good faith exception. Need to file 2012 taxes late The reasonable cause and good faith exception does not apply to any part of a reportable transaction understatement attributable to one or more transactions that lack economic substance. Need to file 2012 taxes late   This penalty does not apply to the part of an understatement on which the fraud penalty, gross valuation misstatement penalty, or penalty for nondisclosure of noneconomic substance transactions is imposed. Need to file 2012 taxes late Civil fraud penalty. Need to file 2012 taxes late   If any underpayment of tax on your return is due to fraud, a penalty of 75% of the underpayment will be added to your tax. Need to file 2012 taxes late Joint return. Need to file 2012 taxes late   The fraud penalty on a joint return applies to a spouse only if some part of the underpayment is due to the fraud of that spouse. Need to file 2012 taxes late Failure to pay tax. Need to file 2012 taxes late   If a deficiency is assessed and is not paid within 10 days of the demand for payment, an investor can be penalized with up to a 25% addition to tax if the failure to pay continues. Need to file 2012 taxes late Whether To Invest In light of the adverse tax consequences and the substantial amount of penalties and interest that will result if the claimed tax benefits are disallowed, you should consider tax shelter investments carefully and seek competent legal and financial advice. Need to file 2012 taxes late Prev  Up  Next   Home   More Online Publications