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Www myfreetaxes com 11. Www myfreetaxes com   Other Expenses Table of Contents What's New Introduction Topics - This chapter discusses: Useful Items - You may want to see: Reimbursement of Travel, Meals, and EntertainmentReimbursements Miscellaneous ExpensesMeaning of generally enforced. Www myfreetaxes com Kickbacks. Www myfreetaxes com Form 1099-MISC. Www myfreetaxes com Exception. Www myfreetaxes com Tax preparation fees. Www myfreetaxes com Covered executive branch official. Www myfreetaxes com Exceptions to denial of deduction. Www myfreetaxes com Indirect political contributions. Www myfreetaxes com Type of deduction. Www myfreetaxes com Repayment—$3,000 or less. Www myfreetaxes com Repayment—over $3,000. Www myfreetaxes com Method 1. Www myfreetaxes com Method 2. Www myfreetaxes com Repayment does not apply. Www myfreetaxes com Year of deduction (or credit). Www myfreetaxes com Telephone. Www myfreetaxes com What's New Standard mileage rate. Www myfreetaxes com  Beginning in 2013, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for business use is 56. Www myfreetaxes com 5 cents per mile. Www myfreetaxes com For more information, see Car and truck expenses under Miscellaneous Expenses. Www myfreetaxes com Introduction This chapter covers business expenses that may not have been explained to you, as a business owner, in previous chapters of this publication. Www myfreetaxes com Topics - This chapter discusses: Travel, meals, and entertainment Bribes and kickbacks Charitable contributions Education expenses Lobbying expenses Penalties and fines Repayments (claim of right) Other miscellaneous expenses Useful Items - You may want to see: Publication 15-B Employer's Tax Guide to Fringe Benefits 463 Travel, Entertainment, Gift, and Car Expenses 526 Charitable Contributions 529 Miscellaneous Deductions 544 Sales and Other Dispositions of Assets 970 Tax Benefits for Education 1542 Per Diem Rates See chapter 12 for information about getting publications and forms. Www myfreetaxes com Reimbursement of Travel, Meals, and Entertainment The following discussion explains how to handle any reimbursements or allowances you may provide to your employees under a reimbursement or allowance arrangement for travel, meals, and entertainment expenses. Www myfreetaxes com If you are self-employed and report your income and expenses on Schedule C or C-EZ (Form 1040), see Publication 463. Www myfreetaxes com To be deductible for tax purposes, expenses incurred for travel, meals, and entertainment must be ordinary and necessary expenses incurred while carrying on your trade or business. Www myfreetaxes com Generally, you also must show that entertainment expenses (including meals) are directly related to, or associated with, the conduct of your trade or business. Www myfreetaxes com For more information on travel, meals, and entertainment, including deductibility, see Publication 463. Www myfreetaxes com Reimbursements A “reimbursement or allowance arrangement” provides for payment of advances, reimbursements, and allowances for travel, meals, and entertainment expenses incurred by your employees during the ordinary course of business. Www myfreetaxes com If the expenses are substantiated, you can deduct the allowable amount on your tax return. Www myfreetaxes com Because of differences between accounting methods and tax law, the amount you can deduct for tax purposes may not be the same as the amount you deduct on your business books and records. Www myfreetaxes com For example, you can deduct 100% of the cost of meals on your business books and records. Www myfreetaxes com However, only 50% of these costs are allowed by law as a tax deduction. Www myfreetaxes com How you deduct a business expense under a reimbursement or allowance arrangement depends on whether you have: An accountable plan, or A nonaccountable plan. Www myfreetaxes com If you reimburse these expenses under an accountable plan, deduct them as travel, meals, or entertainment expenses. Www myfreetaxes com If you reimburse these expenses under a nonaccountable plan, report the reimbursements as wages on Form W-2, Wage and Tax Statement, and deduct them as wages on the appropriate line of your tax return. Www myfreetaxes com If you make a single payment to your employees and it includes both wages and an expense reimbursement, you must specify the amount of the reimbursement and report it accordingly. Www myfreetaxes com See Table 11-1 , Reporting Reimbursements. Www myfreetaxes com Accountable Plans An accountable plan requires your employees to meet all of the following requirements. Www myfreetaxes com Each employee must: Have paid or incurred deductible expenses while performing services as your employee, Adequately account to you for these expenses within a reasonable period of time, and Return any excess reimbursement or allowance within a reasonable period of time. Www myfreetaxes com An arrangement under which you advance money to employees is treated as meeting (3) above only if the following requirements are also met. Www myfreetaxes com The advance is reasonably calculated not to exceed the amount of anticipated expenses. Www myfreetaxes com You make the advance within a reasonable period of time of your employee paying or incurring the expense. Www myfreetaxes com If any expenses reimbursed under this arrangement are not substantiated, or an excess reimbursement is not returned within a reasonable period of time by an employee, you cannot treat these expenses as reimbursed under an accountable plan. Www myfreetaxes com Instead, treat the reimbursed expenses as paid under a nonaccountable plan, discussed later. Www myfreetaxes com Adequate accounting. Www myfreetaxes com   Your employees must adequately account to you for their travel, meals, and entertainment expenses. Www myfreetaxes com They must give you documentary evidence of their travel, mileage, and other employee business expenses. Www myfreetaxes com This evidence should include items such as receipts, along with either a statement of expenses, an account book, a day-planner, or similar record in which the employee entered each expense at or near the time the expense was incurred. Www myfreetaxes com Excess reimbursement or allowance. Www myfreetaxes com   An excess reimbursement or allowance is any amount you pay to an employee that is more than the business-related expenses for which the employee adequately accounted. Www myfreetaxes com The employee must return any excess reimbursement or other expense allowance to you within a reasonable period of time. Www myfreetaxes com Reasonable period of time. Www myfreetaxes com   A reasonable period of time depends on the facts and circumstances. Www myfreetaxes com Generally, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time. Www myfreetaxes com You give an advance within 30 days of the time the employee pays or incurs the expense. Www myfreetaxes com Your employees adequately account for their expenses within 60 days after the expenses were paid or incurred. Www myfreetaxes com Your employees return any excess reimbursement within 120 days after the expenses were paid or incurred. Www myfreetaxes com You give a periodic statement (at least quarterly) to your employees that asks them to either return or adequately account for outstanding advances and they comply within 120 days of the date of the statement. Www myfreetaxes com How to deduct. Www myfreetaxes com   You can claim a deduction for travel, meals, and entertainment expenses if you reimburse your employees for these expenses under an accountable plan. Www myfreetaxes com Generally, the amount you can deduct for meals and entertainment is subject to a 50% limit, discussed later. Www myfreetaxes com If you are a sole proprietor, or are filing as a single member limited liability company, deduct the travel reimbursement on line 24a and the deductible part of the meals and entertainment reimbursement on line 24b, Schedule C (Form 1040) or line 2, Schedule C-EZ (Form 1040). Www myfreetaxes com   If you are filing an income tax return for a corporation, include the reimbursement on the Other deductions line of Form 1120, U. Www myfreetaxes com S. Www myfreetaxes com Corporation Income Tax Return. Www myfreetaxes com If you are filing any other business income tax return, such as a partnership or S corporation return, deduct the reimbursement on the appropriate line of the return as provided in the instructions for that return. Www myfreetaxes com Table 11-1. Www myfreetaxes com Reporting Reimbursements IF the type of reimbursement (or other expense allowance) arrangement is under THEN the employer reports on Form W-2 An accountable plan with: Actual expense reimbursement:  Adequate accounting made and excess returned No amount. Www myfreetaxes com Actual expense reimbursement:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Www myfreetaxes com Per diem or mileage allowance up to the federal rate:  Adequate accounting made and excess returned No amount. Www myfreetaxes com Per diem or mileage allowance up to the federal rate:  Adequate accounting and return of excess both required but excess not returned The excess amount as wages in box 1. Www myfreetaxes com The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Www myfreetaxes com Per diem or mileage allowance exceeds the federal rate:  Adequate accounting made up to the federal rate only and excess not returned The excess amount as wages in box 1. Www myfreetaxes com The amount up to the federal rate is reported only in box 12—it is not reported in box 1. Www myfreetaxes com A nonaccountable plan with: Either adequate accounting or return of excess, or both, not required by plan The entire amount as wages in box 1. Www myfreetaxes com No reimbursement plan The entire amount as wages in box 1. Www myfreetaxes com Per Diem and Car Allowances You can reimburse your employees under an accountable plan based on travel days, miles, or some other fixed allowance. Www myfreetaxes com In these cases, your employee is considered to have accounted to you for the amount of the expense that does not exceed the rates established by the federal government. Www myfreetaxes com Your employee must actually substantiate to you the other elements of the expense, such as time, place, and business purpose. Www myfreetaxes com Federal rate. Www myfreetaxes com   The federal rate can be figured using any one of the following methods. Www myfreetaxes com For car expenses: The standard mileage rate. Www myfreetaxes com A fixed and variable rate (FAVR). Www myfreetaxes com For per diem amounts: The regular federal per diem rate. Www myfreetaxes com The standard meal allowance. Www myfreetaxes com The high-low rate. Www myfreetaxes com Car allowance. Www myfreetaxes com   Your employee is considered to have accounted to you for car expenses that do not exceed the standard mileage rate. Www myfreetaxes com Beginning in 2013, the standard business mileage rate is 56. Www myfreetaxes com 5 cents per mile. Www myfreetaxes com   You can choose to reimburse your employees using a fixed and variable rate (FAVR) allowance. Www myfreetaxes com This is an allowance that includes a combination of payments covering fixed and variable costs, such as a cents-per-mile rate to cover your employees' variable operating costs (such as gas, oil, etc. Www myfreetaxes com ) plus a flat amount to cover your employees' fixed costs (such as depreciation, insurance, etc. Www myfreetaxes com ). Www myfreetaxes com For information on using a FAVR allowance, see Revenue Procedure 2010-51, available at www. Www myfreetaxes com irs. Www myfreetaxes com gov/irb/2010-51_IRB/ar14. Www myfreetaxes com html and Notice 2012-72, available at www. Www myfreetaxes com irs. Www myfreetaxes com gov/irb/2012-50_IRB/ar10. Www myfreetaxes com html. Www myfreetaxes com Per diem allowance. Www myfreetaxes com   If your employee actually substantiates to you the other elements (discussed earlier) of the expenses reimbursed using the per diem allowance, how you report and deduct the allowance depends on whether the allowance is for lodging and meal expenses or for meal expenses only and whether the allowance is more than the federal rate. Www myfreetaxes com Regular federal per diem rate. Www myfreetaxes com   The regular federal per diem rate is the highest amount the federal government will pay to its employees while away from home on travel. Www myfreetaxes com It has two components: Lodging expense, and Meal and incidental expense (M&IE). Www myfreetaxes com The rates are different for different locations. Www myfreetaxes com Publication 1542 lists the rates in the continental United States. Www myfreetaxes com Standard meal allowance. Www myfreetaxes com   The federal rate for meal and incidental expenses (M&IE) is the standard meal allowance. Www myfreetaxes com You can pay only an M&IE allowance to employees who travel away from home if: You pay the employee for actual expenses for lodging based on receipts submitted to you, You provide for the lodging, You pay for the actual expense of the lodging directly to the provider, You do not have a reasonable belief that lodging expenses were incurred by the employee, or The allowance is computed on a basis similar to that used in computing the employee's wages (that is, number of hours worked or miles traveled). Www myfreetaxes com Internet access. Www myfreetaxes com    Per diem rates are available on the Internet. Www myfreetaxes com You can access per diem rates at www. Www myfreetaxes com gsa. Www myfreetaxes com gov/perdiemrates. Www myfreetaxes com High-low method. Www myfreetaxes com   This is a simplified method of computing the federal per diem rate for travel within the continental United States. Www myfreetaxes com It eliminates the need to keep a current list of the per diem rate for each city. Www myfreetaxes com   Under the high-low method, the per diem amount for travel during January through September of 2013 is $242 ($65 for M&IE) for certain high-cost locations. Www myfreetaxes com All other areas have a per diem amount of $163 ($52 for M&IE). Www myfreetaxes com The high-cost locations eligible for the higher per diem amount under the high-low method are listed in Publication 1542. Www myfreetaxes com   Effective October 1, 2013, the per diem rate for high-cost locations increased to $251 ($65 for M&IE). Www myfreetaxes com The rate for all other locations increased to $170 ($52 for M&IE). Www myfreetaxes com For October, November, and December 2013, you can either continue to use the rates described in the preceding paragraph or change to the new rates. Www myfreetaxes com However, you must use the same rate for all employees reimbursed under the high-low method. Www myfreetaxes com   For more information about the high-low method, see Notice 2013-65, available at www. Www myfreetaxes com irs. Www myfreetaxes com gov/irb/2013-44_IRB/ar13. Www myfreetaxes com html. Www myfreetaxes com See Publication 1542 (available on the Internet at IRS. Www myfreetaxes com gov) for the current per diem rates for all locations. Www myfreetaxes com Reporting per diem and car allowances. Www myfreetaxes com   The following discussion explains how to report per diem and car allowances. Www myfreetaxes com The manner in which you report them depends on how the allowance compares to the federal rate. Www myfreetaxes com See Table 11-1. Www myfreetaxes com Allowance less than or equal to the federal rate. Www myfreetaxes com   If your allowance for the employee is less than or equal to the appropriate federal rate, that allowance is not included as part of the employee's pay in box 1 of the employee's Form W-2. Www myfreetaxes com Deduct the allowance as travel expenses (including meals that may be subject to the 50% limit, discussed later). Www myfreetaxes com See How to deduct under Accountable Plans, earlier. Www myfreetaxes com Allowance more than the federal rate. Www myfreetaxes com   If your employee's allowance is more than the appropriate federal rate, you must report the allowance as two separate items. Www myfreetaxes com   Include the allowance amount up to the federal rate in box 12 (code L) of the employee's Form W-2. Www myfreetaxes com Deduct it as travel expenses (as explained above). Www myfreetaxes com This part of the allowance is treated as reimbursed under an accountable plan. Www myfreetaxes com   Include the amount that is more than the federal rate in box 1 (and in boxes 3 and 5 if they apply) of the employee's Form W-2. Www myfreetaxes com Deduct it as wages subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Www myfreetaxes com This part of the allowance is treated as reimbursed under a nonaccountable plan as explained later under Nonaccountable Plans. Www myfreetaxes com Meals and Entertainment Under an accountable plan, you can generally deduct only 50% of any otherwise deductible business-related meal and entertainment expenses you reimburse your employees. Www myfreetaxes com The deduction limit applies even if you reimburse them for 100% of the expenses. Www myfreetaxes com Application of the 50% limit. Www myfreetaxes com   The 50% deduction limit applies to reimbursements you make to your employees for expenses they incur for meals while traveling away from home on business and for entertaining business customers at your place of business, a restaurant, or another location. Www myfreetaxes com It applies to expenses incurred at a business convention or reception, business meeting, or business luncheon at a club. Www myfreetaxes com The deduction limit may also apply to meals you furnish on your premises to your employees. Www myfreetaxes com Related expenses. Www myfreetaxes com   Taxes and tips relating to a meal or entertainment activity you reimburse to your employee under an accountable plan are included in the amount subject to the 50% limit. Www myfreetaxes com Reimbursements you make for expenses, such as cover charges for admission to a nightclub, rent paid for a room to hold a dinner or cocktail party, or the amount you pay for parking at a sports arena, are all subject to the 50% limit. Www myfreetaxes com However, the cost of transportation to and from an otherwise allowable business meal or a business-related entertainment activity is not subject to the 50% limit. Www myfreetaxes com Amount subject to 50% limit. Www myfreetaxes com   If you provide your employees with a per diem allowance only for meal and incidental expenses, the amount treated as an expense for food and beverages is the lesser of the following. Www myfreetaxes com The per diem allowance. Www myfreetaxes com The federal rate for M&IE. Www myfreetaxes com   If you provide your employees with a per diem allowance that covers lodging, meals, and incidental expenses, you must treat an amount equal to the federal M&IE rate for the area of travel as an expense for food and beverages. Www myfreetaxes com If the per diem allowance you provide is less than the federal per diem rate for the area of travel, you can treat 40% of the per diem allowance as the amount for food and beverages. Www myfreetaxes com Meal expenses when subject to “hours of service” limits. Www myfreetaxes com   You can deduct 80% of the cost of reimbursed meals your employees consume while away from their tax home on business during, or incident to, any period subject to the Department of Transportation's “hours of service” limits. Www myfreetaxes com   See Publication 463 for a detailed discussion of individuals subject to the Department of Transportation's “hours of service” limits. Www myfreetaxes com De minimis (minimal) fringe benefit. Www myfreetaxes com   The 50% limit does not apply to an expense for food or beverage that is excluded from the gross income of an employee because it is a de minimis fringe benefit. Www myfreetaxes com See Publication 15-B for additional information on de minimis fringe benefits. Www myfreetaxes com Company cafeteria or executive dining room. Www myfreetaxes com   The cost of food and beverages you provide primarily to your employees on your business premises is deductible. Www myfreetaxes com This includes the cost of maintaining the facilities for providing the food and beverages. Www myfreetaxes com These expenses are subject to the 50% limit unless they qualify as a de minimis fringe benefit, as just discussed, or unless they are compensation to your employees (explained later). Www myfreetaxes com Employee activities. Www myfreetaxes com   The expense of providing recreational, social, or similar activities (including the use of a facility) for your employees is deductible and is not subject to the 50% limit. Www myfreetaxes com The benefit must be primarily for your employees who are not highly compensated. Www myfreetaxes com   For this purpose, a highly compensated employee is an employee who meets either of the following requirements. Www myfreetaxes com Owned a 10% or more interest in the business during the year or the preceding year. Www myfreetaxes com An employee is treated as owning any interest owned by his or her brother, sister, spouse, ancestors, and lineal descendants. Www myfreetaxes com Received more than $115,000 in pay for the preceding year. Www myfreetaxes com You can choose to include only employees who were also in the top 20% of employees when ranked by pay for the preceding year. Www myfreetaxes com   For example, the expenses for food, beverages, and entertainment for a company-wide picnic are not subject to the 50% limit. Www myfreetaxes com Meals or entertainment treated as compensation. Www myfreetaxes com   The 50% limit does not apply to either of the following. Www myfreetaxes com Expenses for meals or entertainment that you treat as: Compensation to an employee who was the recipient of the meals or entertainment, and Wages subject to withholding of federal income tax. Www myfreetaxes com Expenses for meals or entertainment if: A recipient of the meals or entertainment who is not your employee has to include the expenses in gross income as compensation for services or as a prize or award, and You include that amount on a Form 1099 issued to the recipient, if a Form 1099 is required. Www myfreetaxes com Sales of meals or entertainment. Www myfreetaxes com   You can deduct the cost of meals or entertainment (including the use of facilities) you sell to the public. Www myfreetaxes com For example, if you run a nightclub, your expense for the entertainment you furnish to your customers, such as a floor show, is a business expense that is fully deductible. Www myfreetaxes com The 50% limit does not apply to this expense. Www myfreetaxes com Providing meals or entertainment to general public to promote goodwill. Www myfreetaxes com   You can deduct the cost of providing meals, entertainment, or recreational facilities to the general public as a means of advertising or promoting goodwill in the community. Www myfreetaxes com The 50% limit does not apply to this expense. Www myfreetaxes com Director, stockholder, or employee meetings. Www myfreetaxes com   You can deduct entertainment expenses directly related to business meetings of your employees, partners, stockholders, agents, or directors. Www myfreetaxes com You can provide some minor social activities, but the main purpose of the meeting must be your company's business. Www myfreetaxes com These expenses are subject to the 50% limit. Www myfreetaxes com Trade association meetings. Www myfreetaxes com   You can deduct expenses directly related to and necessary for attending business meetings or conventions of certain tax-exempt organizations. Www myfreetaxes com These organizations include business leagues, chambers of commerce, real estate boards, and trade and professional associations. Www myfreetaxes com Nonaccountable Plans A nonaccountable plan is an arrangement that does not meet the requirements for an accountable plan. Www myfreetaxes com All amounts paid, or treated as paid, under a nonaccountable plan are reported as wages on Form W-2. Www myfreetaxes com The payments are subject to income tax withholding, social security, Medicare, and federal unemployment taxes. Www myfreetaxes com You can deduct the reimbursement as compensation or wages only to the extent it meets the deductibility tests for employees' pay in chapter 2. Www myfreetaxes com Deduct the allowable amount as compensation or wages on the appropriate line of your income tax return, as provided in its instructions. Www myfreetaxes com Miscellaneous Expenses In addition to travel, meal, and entertainment expenses, there are other expenses you can deduct. Www myfreetaxes com Advertising expenses. Www myfreetaxes com   You generally can deduct reasonable advertising expenses that are directly related to your business activities. Www myfreetaxes com Generally, you cannot deduct amounts paid to influence legislation (i. Www myfreetaxes com e. Www myfreetaxes com , lobbying). Www myfreetaxes com See Lobbying expenses , later. Www myfreetaxes com   You can usually deduct as a business expense the cost of institutional or goodwill advertising to keep your name before the public if it relates to business you reasonably expect to gain in the future. Www myfreetaxes com For example, the cost of advertising that encourages people to contribute to the Red Cross, to buy U. Www myfreetaxes com S. Www myfreetaxes com Savings Bonds, or to participate in similar causes is usually deductible. Www myfreetaxes com Anticipated liabilities. Www myfreetaxes com   Anticipated liabilities or reserves for anticipated liabilities are not deductible. Www myfreetaxes com For example, assume you sold 1-year TV service contracts this year totaling $50,000. Www myfreetaxes com From experience, you know you will have expenses of about $15,000 in the coming year for these contracts. Www myfreetaxes com You cannot deduct any of the $15,000 this year by charging expenses to a reserve or liability account. Www myfreetaxes com You can deduct your expenses only when you actually pay or accrue them, depending on your accounting method. Www myfreetaxes com Bribes and kickbacks. Www myfreetaxes com   Engaging in the payment of bribes or kickbacks is a serious criminal matter. Www myfreetaxes com Such activity could result in criminal prosecution. Www myfreetaxes com Any payments that appear to have been made, either directly or indirectly, to an official or employee of any government or an agency or instrumentality of any government are not deductible for tax purposes and are in violation of the law. Www myfreetaxes com   Payments paid directly or indirectly to a person in violation of any federal or state law (but only if that state law is generally enforced, defined below) that provides for a criminal penalty or for the loss of a license or privilege to engage in a trade or business are also not allowed as a deduction for tax purposes. Www myfreetaxes com Meaning of “generally enforced. Www myfreetaxes com ”   A state law is considered generally enforced unless it is never enforced or enforced only for infamous persons or persons whose violations are extraordinarily flagrant. Www myfreetaxes com For example, a state law is generally enforced unless proper reporting of a violation of the law results in enforcement only under unusual circumstances. Www myfreetaxes com Kickbacks. Www myfreetaxes com   A kickback is a payment for referring a client, patient, or customer. Www myfreetaxes com The common kickback situation occurs when money or property is given to someone as payment for influencing a third party to purchase from, use the services of, or otherwise deal with the person who pays the kickback. Www myfreetaxes com In many cases, the person whose business is being sought or enjoyed by the person who pays the kickback is not aware of the payment. Www myfreetaxes com   For example, the Yard Corporation is in the business of repairing ships. Www myfreetaxes com It returns 10% of the repair bills as kickbacks to the captains and chief officers of the vessels it repairs. Www myfreetaxes com Although this practice is considered an ordinary and necessary expense of getting business, it is clearly a violation of a state law that is generally enforced. Www myfreetaxes com These expenditures are not deductible for tax purposes, whether or not the owners of the shipyard are subsequently prosecuted. Www myfreetaxes com Form 1099-MISC. Www myfreetaxes com   It does not matter whether any kickbacks paid during the tax year are deductible on your income tax return in regards to information reporting. Www myfreetaxes com See Form 1099-MISC for more information. Www myfreetaxes com Car and truck expenses. Www myfreetaxes com   The costs of operating a car, truck, or other vehicle in your business are deductible. Www myfreetaxes com For more information on how to figure your deduction, see Publication 463. Www myfreetaxes com Charitable contributions. Www myfreetaxes com   Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts and are directly related to your business. Www myfreetaxes com If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. Www myfreetaxes com However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. Www myfreetaxes com See the Instructions for Form 1120 for more information. Www myfreetaxes com Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). Www myfreetaxes com Example. Www myfreetaxes com You paid $15 to a local church for a half-page ad in a program for a concert it is sponsoring. Www myfreetaxes com The purpose of the ad was to encourage readers to buy your products. Www myfreetaxes com Your payment is not a charitable contribution. Www myfreetaxes com You can deduct it as an advertising expense. Www myfreetaxes com Example. Www myfreetaxes com You made a $100,000 donation to a committee organized by the local Chamber of Commerce to bring a convention to your city, intended to increase business activity, including yours. Www myfreetaxes com Your payment is not a charitable contribution. Www myfreetaxes com You can deduct it as a business expense. Www myfreetaxes com See Publication 526 for a discussion of donated inventory, including capital gain property. Www myfreetaxes com Club dues and membership fees. Www myfreetaxes com   Generally, you cannot deduct amounts paid or incurred for membership in any club organized for business, pleasure, recreation, or any other social purpose. Www myfreetaxes com This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. Www myfreetaxes com Exception. Www myfreetaxes com   The following organizations are not treated as clubs organized for business, pleasure, recreation, or other social purpose unless one of the main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities. Www myfreetaxes com Boards of trade. Www myfreetaxes com Business leagues. Www myfreetaxes com Chambers of commerce. Www myfreetaxes com Civic or public service organizations. Www myfreetaxes com Professional organizations such as bar associations and medical associations. Www myfreetaxes com Real estate boards. Www myfreetaxes com Trade associations. Www myfreetaxes com Credit card convenience fees. Www myfreetaxes com   Credit card companies charge a fee to businesses who accept their cards. Www myfreetaxes com This fee when paid or incurred by the business can be deducted as a business expense. Www myfreetaxes com Damages recovered. Www myfreetaxes com   Special rules apply to compensation you receive for damages sustained as a result of patent infringement, breach of contract or fiduciary duty, or antitrust violations. Www myfreetaxes com You must include this compensation in your income. Www myfreetaxes com However, you may be able to take a special deduction. Www myfreetaxes com The deduction applies only to amounts recovered for actual economic injury, not any additional amount. Www myfreetaxes com The deduction is the smaller of the following. Www myfreetaxes com The amount you received or accrued for damages in the tax year reduced by the amount you paid or incurred in the year to recover that amount. Www myfreetaxes com Your losses from the injury you have not deducted. Www myfreetaxes com Demolition expenses or losses. Www myfreetaxes com   Amounts paid or incurred to demolish a structure are not deductible. Www myfreetaxes com These amounts are added to the basis of the land where the demolished structure was located. Www myfreetaxes com Any loss for the remaining undepreciated basis of a demolished structure would not be recognized until the property is disposed of. Www myfreetaxes com Education expenses. Www myfreetaxes com   Ordinary and necessary expenses paid for the cost of the education and training of your employees are deductible. Www myfreetaxes com See Education Expenses in chapter 2. Www myfreetaxes com   You can also deduct the cost of your own education (including certain related travel) related to your trade or business. Www myfreetaxes com You must be able to show the education maintains or improves skills required in your trade or business, or that it is required by law or regulations, for keeping your license to practice, status, or job. Www myfreetaxes com For example, an attorney can deduct the cost of attending Continuing Legal Education (CLE) classes that are required by the state bar association to maintain his or her license to practice law. Www myfreetaxes com   Education expenses you incur to meet the minimum requirements of your present trade or business, or those that qualify you for a new trade or business, are not deductible. Www myfreetaxes com This is true even if the education maintains or improves skills presently required in your business. Www myfreetaxes com For more information on education expenses, see Publication 970. Www myfreetaxes com Franchise, trademark, trade name. Www myfreetaxes com   If you buy a franchise, trademark, or trade name, you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item, Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). Www myfreetaxes com   When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferrer reasonably expect the agreement to be renewed. Www myfreetaxes com   A franchise includes an agreement that gives one of the parties to the agreement the right to distribute, sell, or provide goods, services, or facilities within a specified area. Www myfreetaxes com Impairment-related expenses. Www myfreetaxes com   If you are disabled, you can deduct expenses necessary for you to be able to work (impairment-related expenses) as a business expense, rather than as a medical expense. Www myfreetaxes com   You are disabled if you have either of the following. Www myfreetaxes com A physical or mental disability (for example, blindness or deafness) that functionally limits your being employed. Www myfreetaxes com A physical or mental impairment that substantially limits one or more of your major life activities. Www myfreetaxes com   The expense qualifies as a business expense if all the following apply. Www myfreetaxes com Your work clearly requires the expense for you to satisfactorily perform that work. Www myfreetaxes com The goods or services purchased are clearly not needed or used, other than incidentally, in your personal activities. Www myfreetaxes com Their treatment is not specifically provided for under other tax law provisions. Www myfreetaxes com Example. Www myfreetaxes com You are blind. Www myfreetaxes com You must use a reader to do your work, both at and away from your place of work. Www myfreetaxes com The reader's services are only for your work. Www myfreetaxes com You can deduct your expenses for the reader as a business expense. Www myfreetaxes com Internet-related expenses. Www myfreetaxes com   Generally, you can deduct internet-related expenses including domain registrations fees and webmaster consulting costs. Www myfreetaxes com If you are starting a business you may have to amortize these expenses as start-up costs. Www myfreetaxes com For more information about amortizing start-up and organizational costs, see chapter 8. Www myfreetaxes com Interview expense allowances. Www myfreetaxes com   Reimbursements you make to job candidates for transportation or other expenses related to interviews for possible employment are not wages. Www myfreetaxes com You can deduct the reimbursements as a business expense. Www myfreetaxes com However, expenses for food, beverages, and entertainment are subject to the 50% limit discussed earlier under Meals and Entertainment. Www myfreetaxes com Legal and professional fees. Www myfreetaxes com   Fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business are deductible as business expenses. Www myfreetaxes com However, usually legal fees you pay to acquire business assets are not deductible. Www myfreetaxes com These costs are added to the basis of the property. Www myfreetaxes com   Fees that include payments for work of a personal nature (such as drafting a will, or damages arising from a personal injury) are not allowed as a business deduction on Schedule C or C-EZ. Www myfreetaxes com If the invoice includes both business and personal charges, compute the business portion as follows: multiply the total amount of the bill by a fraction, the numerator of which is the amount attributable to business matters, the denominator of which is the total amount paid. Www myfreetaxes com The result is the portion of the invoice attributable to business expenses. Www myfreetaxes com The portion attributable to personal matters is the difference between the total amount and the business portion (computed above). Www myfreetaxes com   Legal fees relating to personal tax advice may be deductible on Schedule A (Form 1040), if you itemize deductions. Www myfreetaxes com However, the deduction is subject to the 2% limitation on miscellaneous itemized deductions. Www myfreetaxes com See Publication 529, Miscellaneous Deductions. Www myfreetaxes com Tax preparation fees. Www myfreetaxes com   The cost of hiring a tax professional, such as a C. Www myfreetaxes com P. Www myfreetaxes com A. Www myfreetaxes com , to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C or Schedule C-EZ. Www myfreetaxes com Any remaining cost may be deductible on Schedule A (Form 1040) if you itemize deductions. Www myfreetaxes com   You can also claim a business deduction for amounts paid or incurred in resolving asserted tax deficiencies for your business operated as a sole proprietor. Www myfreetaxes com Licenses and regulatory fees. Www myfreetaxes com   Licenses and regulatory fees for your trade or business paid annually to state or local governments generally are deductible. Www myfreetaxes com Some licenses and fees may have to be amortized. Www myfreetaxes com See chapter 8 for more information. Www myfreetaxes com Lobbying expenses. Www myfreetaxes com   Generally, lobbying expenses are not deductible. Www myfreetaxes com Lobbying expenses include amounts paid or incurred for any of the following activities. Www myfreetaxes com Influencing legislation. Www myfreetaxes com Participating in or intervening in any political campaign for, or against, any candidate for public office. Www myfreetaxes com Attempting to influence the general public, or segments of the public, about elections, legislative matters, or referendums. Www myfreetaxes com Communicating directly with covered executive branch officials (defined later) in any attempt to influence the official actions or positions of those officials. Www myfreetaxes com Researching, preparing, planning, or coordinating any of the preceding activities. Www myfreetaxes com   Your expenses for influencing legislation and communicating directly with a covered executive branch official include a portion of your labor costs and general and administrative costs of your business. Www myfreetaxes com For information on making this allocation, see section 1. Www myfreetaxes com 162-28 of the regulations. Www myfreetaxes com   You cannot claim a charitable or business expense deduction for amounts paid to an organization if both of the following apply. Www myfreetaxes com The organization conducts lobbying activities on matters of direct financial interest to your business. Www myfreetaxes com A principal purpose of your contribution is to avoid the rules discussed earlier that prohibit a business deduction for lobbying expenses. Www myfreetaxes com   If a tax-exempt organization, other than a section 501(c)(3) organization, provides you with a notice on the part of dues that is allocable to nondeductible lobbying and political expenses, you cannot deduct that part of the dues. Www myfreetaxes com Covered executive branch official. Www myfreetaxes com   For purposes of this discussion, a covered executive branch official is any of the following. Www myfreetaxes com The President. Www myfreetaxes com The Vice President. Www myfreetaxes com Any officer or employee of the White House Office of the Executive Office of the President and the two most senior level officers of each of the other agencies in the Executive Office. Www myfreetaxes com Any individual who: Is serving in a position in Level I of the Executive Schedule under section 5312 of title 5, United States Code, Has been designated by the President as having Cabinet-level status, or Is an immediate deputy of an individual listed in item (a) or (b). Www myfreetaxes com Exceptions to denial of deduction. Www myfreetaxes com   The general denial of the deduction does not apply to the following. Www myfreetaxes com Expenses of appearing before, or communicating with, any committee or member of any local council or similar governing body concerning its legislation (local legislation) if the legislation is of direct interest to you or to you and an organization of which you are a member. Www myfreetaxes com An Indian tribal government is treated as a local council or similar governing body. Www myfreetaxes com Any in-house expenses for influencing legislation and communicating directly with a covered executive branch official if those expenses for the tax year do not exceed $2,000 (excluding overhead expenses). Www myfreetaxes com Expenses incurred by taxpayers engaged in the trade or business of lobbying (professional lobbyists) on behalf of another person (but does apply to payments by the other person to the lobbyist for lobbying activities). Www myfreetaxes com Moving machinery. Www myfreetaxes com   Generally, the cost of moving machinery from one city to another is a deductible expense. Www myfreetaxes com So is the cost of moving machinery from one plant to another, or from one part of your plant to another. Www myfreetaxes com You can deduct the cost of installing the machinery in the new location. Www myfreetaxes com However, you must capitalize the costs of installing or moving newly purchased machinery. Www myfreetaxes com Outplacement services. Www myfreetaxes com   The costs of outplacement services you provide to your employees to help them find new employment, such as career counseling, résumé assistance, skills assessment, etc. Www myfreetaxes com are deductible. Www myfreetaxes com   The costs of outplacement services may cover more than one deduction category. Www myfreetaxes com For example, deduct as a utilities expense the cost of telephone calls made under this service and deduct as rental expense the cost of renting machinery and equipment for this service. Www myfreetaxes com   For information on whether the value of outplacement services is includable in your employees' income, see Publication 15-B. Www myfreetaxes com Penalties and fines. Www myfreetaxes com   Penalties paid for late performance or nonperformance of a contract are generally deductible. Www myfreetaxes com For instance, you own and operate a construction company. Www myfreetaxes com Under a contract, you are to finish construction of a building by a certain date. Www myfreetaxes com Due to construction delays, the building is not completed and ready for occupancy on the date stipulated in the contract. Www myfreetaxes com You are now required to pay an additional amount for each day that completion is delayed beyond the completion date stipulated in the contract. Www myfreetaxes com These additional costs are deductible business expenses. Www myfreetaxes com   On the other hand, penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible. Www myfreetaxes com These fines or penalties include the following amounts. Www myfreetaxes com Paid because of a conviction for a crime or after a plea of guilty or no contest in a criminal proceeding. Www myfreetaxes com Paid as a penalty imposed by federal, state, or local law in a civil action, including certain additions to tax and additional amounts and assessable penalties imposed by the Internal Revenue Code. Www myfreetaxes com Paid in settlement of actual or possible liability for a fine or penalty, whether civil or criminal. Www myfreetaxes com Forfeited as collateral posted for a proceeding that could result in a fine or penalty. Www myfreetaxes com   Examples of nondeductible penalties and fines include the following. Www myfreetaxes com Fines for violating city housing codes. Www myfreetaxes com Fines paid by truckers for violating state maximum highway weight laws. Www myfreetaxes com Fines for violating air quality laws. Www myfreetaxes com Civil penalties for violating federal laws regarding mining safety standards and discharges into navigable waters. Www myfreetaxes com   A fine or penalty does not include any of the following. Www myfreetaxes com Legal fees and related expenses to defend yourself in a prosecution or civil action for a violation of the law imposing the fine or civil penalty. Www myfreetaxes com Court costs or stenographic and printing charges. Www myfreetaxes com Compensatory damages paid to a government. Www myfreetaxes com Political contributions. Www myfreetaxes com   Contributions or gifts paid to political parties or candidates are not deductible. Www myfreetaxes com In addition, expenses paid or incurred to take part in any political campaign of a candidate for public office are not deductible. Www myfreetaxes com Indirect political contributions. Www myfreetaxes com   You cannot deduct indirect political contributions and costs of taking part in political activities as business expenses. Www myfreetaxes com Examples of nondeductible expenses include the following. Www myfreetaxes com Advertising in a convention program of a political party, or in any other publication if any of the proceeds from the publication are for, or intended for, the use of a political party or candidate. Www myfreetaxes com Admission to a dinner or program (including, but not limited to, galas, dances, film presentations, parties, and sporting events) if any of the proceeds from the function are for, or intended for, the use of a political party or candidate. Www myfreetaxes com Admission to an inaugural ball, gala, parade, concert, or similar event if identified with a political party or candidate. Www myfreetaxes com Repairs. Www myfreetaxes com   The cost of repairing or improving property used in your trade or business is either a deductible or capital expense. Www myfreetaxes com Routine maintenance that keeps your property in a normal efficient operating condition, but that does not materially increase the value or substantially prolong the useful life of the property, is deductible in the year that it is incurred. Www myfreetaxes com Otherwise, the cost must be capitalized and depreciated. Www myfreetaxes com See Form 4562 and its instructions for how to compute and claim the depreciation deduction. Www myfreetaxes com   The cost of repairs includes the costs of labor, supplies, and certain other items. Www myfreetaxes com The value of your own labor is not deductible. Www myfreetaxes com Examples of repairs include: Reconditioning floors (but not replacement), Repainting the interior and exterior walls of a building, Cleaning and repairing roofs and gutters, and Fixing plumbing leaks (but not replacement of fixtures). Www myfreetaxes com Repayments. Www myfreetaxes com   If you had to repay an amount you included in your income in an earlier year, you may be able to deduct the amount repaid for the year in which you repaid it. Www myfreetaxes com Or, if the amount you repaid is more than $3,000, you may be able to take a credit against your tax for the year in which you repaid it. Www myfreetaxes com Type of deduction. Www myfreetaxes com   The type of deduction you are allowed in the year of repayment depends on the type of income you included in the earlier year. Www myfreetaxes com For instance, if you repay an amount you previously reported as a capital gain, deduct the repayment as a capital loss on Form 8949. Www myfreetaxes com If you reported it as self-employment income, deduct it as a business deduction on Schedule C or Schedule C-EZ (Form 1040) or Schedule F (Form 1040). Www myfreetaxes com   If you reported the amount as wages, unemployment compensation, or other nonbusiness ordinary income, enter it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is subject to the 2% limitation. Www myfreetaxes com However, if the repayment is over $3,000 and Method 1 (discussed later) applies, deduct it on Schedule A (Form 1040) as a miscellaneous itemized deduction that is not subject to the 2% limitation. Www myfreetaxes com Repayment—$3,000 or less. Www myfreetaxes com   If the amount you repaid was $3,000 or less, deduct it from your income in the year you repaid it. Www myfreetaxes com Repayment—over $3,000. Www myfreetaxes com   If the amount you repaid was more than $3,000, you can deduct the repayment, as described earlier. Www myfreetaxes com However, you can instead choose to take a tax credit for the year of repayment if you included the income under a “claim of right. Www myfreetaxes com ” This means that at the time you included the income, it appeared that you had an unrestricted right to it. Www myfreetaxes com If you qualify for this choice, figure your tax under both methods and use the method that results in less tax. Www myfreetaxes com Method 1. Www myfreetaxes com   Figure your tax for 2013 claiming a deduction for the repaid amount. Www myfreetaxes com Method 2. Www myfreetaxes com   Figure your tax for 2013 claiming a credit for the repaid amount. Www myfreetaxes com Follow these steps. Www myfreetaxes com Figure your tax for 2013 without deducting the repaid amount. Www myfreetaxes com Refigure your tax from the earlier year without including in income the amount you repaid in 2013. Www myfreetaxes com Subtract the tax in (2) from the tax shown on your return for the earlier year. Www myfreetaxes com This is the amount of your credit. Www myfreetaxes com Subtract the answer in (3) from the tax for 2013 figured without the deduction (step 1). Www myfreetaxes com   If Method 1 results in less tax, deduct the amount repaid as discussed earlier under Type of deduction. Www myfreetaxes com   If Method 2 results in less tax, claim the credit on line 71 of Form 1040, and write “I. Www myfreetaxes com R. Www myfreetaxes com C. Www myfreetaxes com 1341” next to line 71. Www myfreetaxes com Example. Www myfreetaxes com For 2012, you filed a return and reported your income on the cash method. Www myfreetaxes com In 2013, you repaid $5,000 included in your 2012 gross income under a claim of right. Www myfreetaxes com Your filing status in 2013 and 2012 is single. Www myfreetaxes com Your income and tax for both years are as follows:   2012  With Income 2012  Without Income Taxable Income $15,000 $10,000 Tax $ 1,819 $ 1,069   2013  Without Deduction 2013  With Deduction Taxable Income $49,950 $44,950 Tax $8,423 $7,173 Your tax under Method 1 is $7,173. Www myfreetaxes com Your tax under Method 2 is $7,673, figured as follows: Tax previously determined for 2012 $ 1,819 Less: Tax as refigured − 1,069 Decrease in 2012 tax $ 750 Regular tax liability for 2013 $8,423 Less: Decrease in 2012 tax − 750 Refigured tax for 2013 $ 7,673 Because you pay less tax under Method 1, you should take a deduction for the repayment in 2013. Www myfreetaxes com Repayment does not apply. Www myfreetaxes com   This discussion does not apply to the following. Www myfreetaxes com Deductions for bad debts. Www myfreetaxes com Deductions from sales to customers, such as returns and allowances, and similar items. Www myfreetaxes com Deductions for legal and other expenses of contesting the repayment. Www myfreetaxes com Year of deduction (or credit). Www myfreetaxes com   If you use the cash method of accounting, you can take the deduction (or credit, if applicable) for the tax year in which you actually make the repayment. Www myfreetaxes com If you use any other accounting method, you can deduct the repayment or claim a credit for it only for the tax year in which it is a proper deduction under your accounting method. Www myfreetaxes com For example, if you use the accrual method, you are entitled to the deduction or credit in the tax year in which the obligation for the repayment accrues. Www myfreetaxes com Subscriptions. Www myfreetaxes com   Subscriptions to professional, technical, and trade journals that deal with your business field are deductible. Www myfreetaxes com Supplies and materials. Www myfreetaxes com   Unless you have deducted the cost in any earlier year, you generally can deduct the cost of materials and supplies actually consumed and used during the tax year. Www myfreetaxes com   If you keep incidental materials and supplies on hand, you can deduct the cost of the incidental materials and supplies you bought during the tax year if all the following requirements are met. Www myfreetaxes com You do not keep a record of when they are used. Www myfreetaxes com You do not take an inventory of the amount on hand at the beginning and end of the tax year. Www myfreetaxes com This method does not distort your income. Www myfreetaxes com   You can also deduct the cost of books, professional instruments, equipment, etc. Www myfreetaxes com , if you normally use them within a year. Www myfreetaxes com However, if the usefulness of these items extends substantially beyond the year they are placed in service, you generally must recover their costs through depreciation. Www myfreetaxes com For more information regarding depreciation see Publication 946, How To Depreciate Property. Www myfreetaxes com Utilities. Www myfreetaxes com   Business expenses for heat, lights, power, telephone service, and water and sewerage are deductible. Www myfreetaxes com However, any part due to personal use is not deductible. Www myfreetaxes com Telephone. Www myfreetaxes com   You cannot deduct the cost of basic local telephone service (including any taxes) for the first telephone line you have in your home, even if you have an office in your home. Www myfreetaxes com However, charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses. Www myfreetaxes com Prev  Up  Next   Home   More Online Publications
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Www myfreetaxes com Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). Www myfreetaxes com Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. Www myfreetaxes com Laundering means converting “dirty” or illegally-gained money to “clean” money. Www myfreetaxes com The government can often trace this laundered money through the payments you report. Www myfreetaxes com Laws passed by Congress require you to report these payments. Www myfreetaxes com Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. Www myfreetaxes com The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. Www myfreetaxes com Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. Www myfreetaxes com For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. Www myfreetaxes com Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. Www myfreetaxes com However, you do not have to file Form 8300 if the transaction is not related to your trade or business. Www myfreetaxes com For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. Www myfreetaxes com Transaction defined. Www myfreetaxes com    A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. Www myfreetaxes com Person defined. Www myfreetaxes com   A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. Www myfreetaxes com   Exempt organizations, including employee plans, are also “persons. Www myfreetaxes com ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. Www myfreetaxes com Foreign transactions. Www myfreetaxes com   You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. Www myfreetaxes com However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. Www myfreetaxes com Bail received by court clerks. Www myfreetaxes com   Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. Www myfreetaxes com For more information about the rules that apply to court clerks, see Section 1. Www myfreetaxes com 6050I-2 of the Income Tax Regulations. Www myfreetaxes com What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). Www myfreetaxes com What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. Www myfreetaxes com Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. Www myfreetaxes com ” Cash does not include a check drawn on an individual's personal account. Www myfreetaxes com A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. Www myfreetaxes com These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. Www myfreetaxes com Example 1. Www myfreetaxes com You are a coin dealer. Www myfreetaxes com Bob Green buys gold coins from you for $13,200. Www myfreetaxes com He pays for them with $6,200 in U. Www myfreetaxes com S. Www myfreetaxes com currency and a cashier's check having a face amount of $7,000. Www myfreetaxes com The cashier's check is treated as cash. Www myfreetaxes com You have received more than $10,000 cash and must file Form 8300 for this transaction. Www myfreetaxes com Example 2. Www myfreetaxes com You are a retail jeweler. Www myfreetaxes com Mary North buys an item of jewelry from you for $12,000. Www myfreetaxes com She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. Www myfreetaxes com Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. Www myfreetaxes com You do not have to file Form 8300. Www myfreetaxes com Example 3. Www myfreetaxes com You are a boat dealer. Www myfreetaxes com Emily Jones buys a boat from you for $16,500. Www myfreetaxes com She pays for it with a cashier's check payable to you in the amount of $16,500. Www myfreetaxes com The cashier's check is not treated as cash because its face amount is more than $10,000. Www myfreetaxes com You do not have to file Form 8300 for this transaction. Www myfreetaxes com Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. Www myfreetaxes com A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). Www myfreetaxes com For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. Www myfreetaxes com The car is a consumer durable even if you sell it to a buyer who will use it in a business. Www myfreetaxes com A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). Www myfreetaxes com Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. Www myfreetaxes com To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. Www myfreetaxes com Example. Www myfreetaxes com You are a travel agent. Www myfreetaxes com Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. Www myfreetaxes com He also asks you to book hotel rooms and admission tickets for the group. Www myfreetaxes com In payment, he gives you two money orders, each for $6,000. Www myfreetaxes com You have received more than $10,000 cash in this designated reporting transaction. Www myfreetaxes com You must file Form 8300. Www myfreetaxes com Retail sale. Www myfreetaxes com   The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. Www myfreetaxes com   Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. Www myfreetaxes com This includes any sales of items that will be resold. Www myfreetaxes com Broker or intermediary. Www myfreetaxes com   A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. Www myfreetaxes com Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. Www myfreetaxes com Exception for certain bank loans. Www myfreetaxes com   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. Www myfreetaxes com As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. Www myfreetaxes com Example. Www myfreetaxes com You are a car dealer. Www myfreetaxes com Mandy White buys a new car from you for $11,500. Www myfreetaxes com She pays you with $2,000 of U. Www myfreetaxes com S. Www myfreetaxes com currency and a cashier's check for $9,500 payable to you and her. Www myfreetaxes com You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. Www myfreetaxes com For this reason, the cashier's check is not treated as cash. Www myfreetaxes com You do not have to file Form 8300 for the transaction. Www myfreetaxes com Exception for certain installment sales. Www myfreetaxes com   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). Www myfreetaxes com However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. Www myfreetaxes com Exception for certain down payment plans. Www myfreetaxes com   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. Www myfreetaxes com You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. Www myfreetaxes com You receive it more than 60 days before the date of sale. Www myfreetaxes com You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. Www myfreetaxes com Exception for travel and entertainment. Www myfreetaxes com   A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. Www myfreetaxes com You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. Www myfreetaxes com You receive it more than 60 days before the date on which the final payment is due. Www myfreetaxes com You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. Www myfreetaxes com Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. Www myfreetaxes com If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. Www myfreetaxes com If you do not know a person's TIN, you have to ask for it. Www myfreetaxes com You may be subject to penalties for an incorrect or missing TIN. Www myfreetaxes com There are three types of TINs. Www myfreetaxes com The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). Www myfreetaxes com The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). Www myfreetaxes com An ITIN has nine digits, similar to an SSN. Www myfreetaxes com The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). Www myfreetaxes com Exception. Www myfreetaxes com   You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. Www myfreetaxes com S. Www myfreetaxes com trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. Www myfreetaxes com 1441-1(e)(2) or (3) or 1. Www myfreetaxes com 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. Www myfreetaxes com 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. Www myfreetaxes com S. Www myfreetaxes com citizen or resident. Www myfreetaxes com What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. Www myfreetaxes com If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. Www myfreetaxes com For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. Www myfreetaxes com Because they total $12,000 (more than $10,000), you must file Form 8300. Www myfreetaxes com More than 24 hours between transactions. Www myfreetaxes com   Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. Www myfreetaxes com   For example, you are a travel agent. Www myfreetaxes com A client pays you $8,000 in cash for a trip. Www myfreetaxes com Two days later, the same client pays you $3,000 more in cash to include another person on the trip. Www myfreetaxes com These are related transactions, and you must file Form 8300 to report them. Www myfreetaxes com What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. Www myfreetaxes com A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. Www myfreetaxes com If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. Www myfreetaxes com Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. Www myfreetaxes com When, Where, and What To File The amount you receive and when you receive it determine when you must file. Www myfreetaxes com Generally, you must file Form 8300 within 15 days after receiving a payment. Www myfreetaxes com If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. Www myfreetaxes com More than one payment. Www myfreetaxes com   In some transactions, the buyer may arrange to pay you in cash installment payments. Www myfreetaxes com If the first payment is more than $10,000, you must file Form 8300 within 15 days. Www myfreetaxes com If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. Www myfreetaxes com When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. Www myfreetaxes com   After you file Form 8300, you must start a new count of cash payments received from that buyer. Www myfreetaxes com If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. Www myfreetaxes com You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. Www myfreetaxes com   If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. Www myfreetaxes com Example. Www myfreetaxes com On January 10, you receive a cash payment of $11,000. Www myfreetaxes com You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. Www myfreetaxes com By January 25, you must file a Form 8300 for the $11,000 payment. Www myfreetaxes com By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. Www myfreetaxes com Amending a Report?   If you are amending a report, check box 1a at the top of Form 8300. Www myfreetaxes com Complete the form in its entirety (Parts I-IV) and include the amended information. Www myfreetaxes com Do not attach a copy of the original report. Www myfreetaxes com Where to file. Www myfreetaxes com   Mail the form to the address given in the Form 8300 instructions. Www myfreetaxes com Required statement to buyer. Www myfreetaxes com   You must give a written or electronic statement to each person named on any Form 8300 you must file. Www myfreetaxes com You can give the statement electronically only if the recipient agrees to receive it in that format. Www myfreetaxes com The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. Www myfreetaxes com It must state that you are also reporting this information to the IRS. Www myfreetaxes com   You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. Www myfreetaxes com    You must keep a copy of every Form 8300 you file for 5 years. Www myfreetaxes com Examples Example 1. Www myfreetaxes com Pat Brown is the sales manager for Small Town Cars. Www myfreetaxes com On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. Www myfreetaxes com Pat asks for identification from Jane to get the necessary information to complete Form 8300. Www myfreetaxes com A filled-in form is shown in this publication. Www myfreetaxes com Pat must mail the form to the address shown in the form's instructions by January 21, 2009. Www myfreetaxes com He must also send a statement to Jane by January 31, 2010. Www myfreetaxes com Example 2. Www myfreetaxes com Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. Www myfreetaxes com Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). Www myfreetaxes com Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. Www myfreetaxes com However, he could report it if he felt it was a suspicious transaction. Www myfreetaxes com Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. Www myfreetaxes com If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). Www myfreetaxes com There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. Www myfreetaxes com If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. Www myfreetaxes com These dollar amounts are based on Section 3571 of Title 18 of the U. Www myfreetaxes com S. Www myfreetaxes com Code. Www myfreetaxes com The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. Www myfreetaxes com This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. Www myfreetaxes com Structuring means breaking up a large cash transaction into small cash transactions. Www myfreetaxes com How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Www myfreetaxes com By selecting the method that is best for you, you will have quick and easy access to tax help. Www myfreetaxes com Free help with your return. Www myfreetaxes com   Free help in preparing your return is available nationwide from IRS-certified volunteers. Www myfreetaxes com The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. Www myfreetaxes com Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Www myfreetaxes com To find the nearest VITA or TCE site, visit IRS. Www myfreetaxes com gov or call 1-800-906-9887 or 1-800-829-1040. Www myfreetaxes com   As part of the TCE program, AARP offers the Tax-Aide counseling program. Www myfreetaxes com To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. Www myfreetaxes com aarp. Www myfreetaxes com org/money/taxaide. Www myfreetaxes com   For more information on these programs, go to IRS. Www myfreetaxes com gov and enter keyword “VITA” in the upper right-hand corner. Www myfreetaxes com Internet. Www myfreetaxes com You can access the IRS website at IRS. Www myfreetaxes com gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. Www myfreetaxes com Go to IRS. Www myfreetaxes com gov and click on Where's My Refund. Www myfreetaxes com Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Www myfreetaxes com If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Www myfreetaxes com Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Www myfreetaxes com E-file your return. Www myfreetaxes com Find out about commercial tax preparation and e-file services available free to eligible taxpayers. Www myfreetaxes com Download forms, including talking tax forms, instructions, and publications. Www myfreetaxes com Order IRS products online. Www myfreetaxes com Research your tax questions online. Www myfreetaxes com Search publications online by topic or keyword. Www myfreetaxes com Use the online Internal Revenue Code, regulations, or other official guidance. Www myfreetaxes com View Internal Revenue Bulletins (IRBs) published in the last few years. Www myfreetaxes com Figure your withholding allowances using the withholding calculator online at  www. Www myfreetaxes com irs. Www myfreetaxes com gov/individuals. Www myfreetaxes com Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at  www. Www myfreetaxes com irs. Www myfreetaxes com gov/individuals. Www myfreetaxes com Sign up to receive local and national tax news by email. Www myfreetaxes com Get information on starting and operating a small business. Www myfreetaxes com Phone. Www myfreetaxes com Many services are available by phone. Www myfreetaxes com   Ordering forms, instructions, and publications. Www myfreetaxes com Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. Www myfreetaxes com You should receive your order within 10 days. Www myfreetaxes com Asking tax questions. Www myfreetaxes com Call the IRS with your tax questions at 1-800-829-1040. Www myfreetaxes com Solving problems. Www myfreetaxes com You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. Www myfreetaxes com An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Www myfreetaxes com Call your local Taxpayer Assistance Center for an appointment. Www myfreetaxes com To find the number, go to www. Www myfreetaxes com irs. Www myfreetaxes com gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Www myfreetaxes com TTY/TDD equipment. Www myfreetaxes com If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. Www myfreetaxes com TeleTax topics. Www myfreetaxes com Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. Www myfreetaxes com Refund information. Www myfreetaxes com You can check the status of your refund on the new IRS phone app. Www myfreetaxes com Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. Www myfreetaxes com IRS2Go is a new way to provide you with information and tools. Www myfreetaxes com To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). Www myfreetaxes com Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. Www myfreetaxes com If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). Www myfreetaxes com Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. Www myfreetaxes com If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. Www myfreetaxes com Other refund information. Www myfreetaxes com To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. Www myfreetaxes com Evaluating the quality of our telephone services. Www myfreetaxes com To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. Www myfreetaxes com One method is for a second IRS representative to listen in on or record random telephone calls. Www myfreetaxes com Another is to ask some callers to complete a short survey at the end of the call. Www myfreetaxes com Walk-in. Www myfreetaxes com Many products and services are available on a walk-in basis. Www myfreetaxes com   Products. Www myfreetaxes com You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Www myfreetaxes com Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Www myfreetaxes com Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. Www myfreetaxes com Services. Www myfreetaxes com You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. Www myfreetaxes com An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. Www myfreetaxes com If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. Www myfreetaxes com No appointment is necessary—just walk in. Www myfreetaxes com If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. Www myfreetaxes com A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. Www myfreetaxes com If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. Www myfreetaxes com All other issues will be handled without an appointment. Www myfreetaxes com To find the number of your local office, go to www. Www myfreetaxes com irs. Www myfreetaxes com gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. Www myfreetaxes com Mail. Www myfreetaxes com You can send your order for forms, instructions, and publications to the address below. Www myfreetaxes com You should receive a response within 10 days after your request is received. Www myfreetaxes com  Internal Revenue Service 1201 N. Www myfreetaxes com Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. Www myfreetaxes com   The Taxpayer Advocate Service (TAS) is your voice at the IRS. Www myfreetaxes com Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. Www myfreetaxes com We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. Www myfreetaxes com Remember, the worst thing you can do is nothing at all. Www myfreetaxes com   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. Www myfreetaxes com You face (or your business is facing) an immediate threat of adverse action. Www myfreetaxes com You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. Www myfreetaxes com   If you qualify for our help, we’ll do everything we can to get your problem resolved. Www myfreetaxes com You will be assigned to one advocate who will be with you at every turn. Www myfreetaxes com We have offices in every state, the District of Columbia, and Puerto Rico. Www myfreetaxes com Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. Www myfreetaxes com And our services are always free. Www myfreetaxes com   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. Www myfreetaxes com Our tax toolkit at www. Www myfreetaxes com TaxpayerAdvocate. Www myfreetaxes com irs. Www myfreetaxes com gov can help you understand these rights. Www myfreetaxes com   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. Www myfreetaxes com irs. Www myfreetaxes com gov/advocate. Www myfreetaxes com You can also call our toll-free number at 1-877-777-4778. Www myfreetaxes com   TAS also handles large-scale or systemic problems that affect many taxpayers. Www myfreetaxes com If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. Www myfreetaxes com irs. Www myfreetaxes com gov/advocate. Www myfreetaxes com Low Income Taxpayer Clinics (LITCs). Www myfreetaxes com   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. Www myfreetaxes com Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. Www myfreetaxes com These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. Www myfreetaxes com Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. Www myfreetaxes com For more information and to find a clinic near you, see the LITC page on www. Www myfreetaxes com irs. Www myfreetaxes com gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. Www myfreetaxes com This publication is also available by calling 1-800-829-3676 or at your local IRS office. Www myfreetaxes com Free tax services. Www myfreetaxes com   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. Www myfreetaxes com Learn about free tax information from the IRS, including publications, services, and education and assistance programs. Www myfreetaxes com The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. Www myfreetaxes com The majority of the information and services listed in this publication are available to you free of charge. Www myfreetaxes com If there is a fee associated with a resource or service, it is listed in the publication. Www myfreetaxes com   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. Www myfreetaxes com DVD for tax products. Www myfreetaxes com You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. Www myfreetaxes com Prior-year forms, instructions, and publications. Www myfreetaxes com Tax Map: an electronic research tool and finding aid. Www myfreetaxes com Tax law frequently asked questions. Www myfreetaxes com Tax Topics from the IRS telephone response system. Www myfreetaxes com Internal Revenue Code—Title 26 of the U. Www myfreetaxes com S. Www myfreetaxes com Code. Www myfreetaxes com Links to other Internet based Tax Research Materials. Www myfreetaxes com Fill-in, print, and save features for most tax forms. Www myfreetaxes com Internal Revenue Bulletins. Www myfreetaxes com Toll-free and email technical support. Www myfreetaxes com Two releases during the year. Www myfreetaxes com  – The first release will ship the beginning of January. Www myfreetaxes com  – The final release will ship the beginning of March. Www myfreetaxes com Purchase the DVD from National Technical Information Service (NTIS) at www. Www myfreetaxes com irs. Www myfreetaxes com gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). Www myfreetaxes com This image is too large to be displayed in the current screen. Www myfreetaxes com Please click the link to view the image. Www myfreetaxes com Fill-in Form 8300 Prev  Up  Next   Home   More Online Publications