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1040nr Publication 3402 - Introductory Material Table of Contents Reminder IntroductionOrdering forms and publications. 1040nr Tax questions. 1040nr Useful Items - You may want to see: Reminder Photographs of missing children. 1040nr  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040nr Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040nr You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040nr Introduction This publication provides federal income, employment, and excise tax information for limited liability companies. 1040nr This publication does not address state law governing the formation, operation, or termination of limited liability companies. 1040nr This publication does not address any state taxes. 1040nr Comments and suggestions. 1040nr   We welcome your comments about this publication and your suggestions for future editions. 1040nr   You can write to us at the following address: Internal Revenue Service Business Forms and Publications Branch SE:W:CAR:MP:T:B 1111 Constitution Ave. 1040nr NW, IR–6526 Washington, DC 20224   We respond to many letters by telephone. 1040nr Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040nr   You can email us at *taxforms@irs. 1040nr gov. 1040nr (The asterisk must be included in the address. 1040nr ) Please put “Publications Comment” on the subject line. 1040nr Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040nr Ordering forms and publications. 1040nr   Visit www. 1040nr irs. 1040nr gov/formspubs to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. 1040nr Internal Revenue Service1201 N. 1040nr Mitsubishi MotorwayBloomington, IL 61705-6613 Tax questions. 1040nr   If you have a tax question, check the information available on www. 1040nr irs. 1040nr gov or call 1-800-829-1040. 1040nr We cannot answer tax questions sent to either of the above addresses. 1040nr Useful Items - You may want to see: Publication 15 (Circular E), Employer's Tax Guide 334 Tax Guide for Small Business 505 Tax Withholding and Estimated Tax 535 Business Expenses 541 Partnerships 542 Corporations 544 Sales and Other Dispositions of Assets 583 Starting a Business and Keeping Records 925 Passive Activity and At-Risk Rules Form (and Instructions) 1065 U. 1040nr S. 1040nr Return of Partnership Income 1120 U. 1040nr S. 1040nr Corporation Income Tax Return 1120S U. 1040nr S. 1040nr Income Tax Return for an S Corporation 2553 Election by a Small Business Corporation 8832 Entity Classification Election See How To Get More Information near the end of this publication for information about getting publications and forms. 1040nr Prev  Up  Next   Home   More Online Publications
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1040nr 7. 1040nr   Filing Information Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: What, When, and Where To FileResident Aliens Nonresident Aliens Amended Returns and Claims for Refund Other Forms You May Have To File PenaltiesCivil Penalties Criminal Penalties Introduction This chapter provides the basic filing information that you may need. 1040nr Topics - This chapter discusses: Forms aliens must file, When and where to file, Penalties, and Amended returns and claims for refund. 1040nr Useful Items - You may want to see: Forms (and Instructions) 1040 U. 1040nr S. 1040nr Individual Income Tax Return 1040A U. 1040nr S. 1040nr Individual Income Tax Return 1040EZ Income Tax Return for Single and Joint Filers With No Dependents 1040NR U. 1040nr S. 1040nr Nonresident Alien Income Tax Return 1040NR-EZ U. 1040nr S. 1040nr Income Tax Return for Certain Nonresident Aliens With No Dependents See chapter 12 for information about getting these forms. 1040nr What, When, and Where To File What return you must file as well as when and where you file that return, depends on your status at the end of the tax year as a resident or a nonresident alien. 1040nr Resident Aliens Resident aliens should file Form 1040EZ, 1040A, or 1040 at the address shown in the instructions for that form. 1040nr The due date for filing the return and paying any tax due is April 15 of the year following the year for which you are filing a return (but see the Tip, later). 1040nr Under U. 1040nr S. 1040nr immigration law, a lawful permanent resident who is required to file a tax return as a resident and fails to do so may be regarded as having abandoned status and may lose permanent resident status. 1040nr Extensions of time to file. 1040nr   You are allowed an automatic extension to June 15 to file if your main place of business and the home you live in are outside the United States and Puerto Rico on April 15. 1040nr You can get an extension of time to October 15 to file your return if you get an extension by April 15 (June 15 if you qualify for the June 15 extension). 1040nr Use Form 4868 to get the extension to October 15. 1040nr In addition to this 6-month extension, taxpayers who are out of the country (as defined in the Form 4868 instructions) can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). 1040nr To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. 1040nr Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address:  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. 1040nr   The discretionary 2-month additional extension is not available to taxpayers who have an approved extension of time to file on Form 2350 (for U. 1040nr S. 1040nr citizens and resident aliens abroad who expect to qualify for special tax treatment). 1040nr    If the due date for filing falls on a Saturday, Sunday, or legal holiday, the due date is the next day which is not a Saturday, Sunday, or legal holiday. 1040nr You may be able to file your return electronically. 1040nr See IRS e-file in your form instructions. 1040nr Nonresident Aliens Nonresident aliens who are required to file an income tax return should use Form 1040NR or, if qualified, Form 1040NR-EZ. 1040nr If you are any of the following, you must file a return. 1040nr A nonresident alien individual engaged or considered to be engaged in a trade or business in the United States during 2013. 1040nr (But see Exceptions , later. 1040nr ) You must file even if: Your income did not come from a trade or business conducted in the United States, You have no income from U. 1040nr S. 1040nr sources, or Your income is exempt from income tax. 1040nr A nonresident alien individual not engaged in a trade or business in the United States with U. 1040nr S. 1040nr income on which the tax liability was not satisfied by the withholding of tax at the source. 1040nr A representative or agent responsible for filing the return of an individual described in (1) or (2). 1040nr A fiduciary for a nonresident alien estate or trust. 1040nr You must also file if you want to: Claim a refund of overwithheld or overpaid tax, or Claim the benefit of any deductions or credits. 1040nr For example, if you have no U. 1040nr S. 1040nr business activities but have income from real property that you choose to treat as effectively connected income (discussed in chapter 4), you must timely file a true and accurate return to take any allowable deductions against that income. 1040nr For information on what is timely, see When to file for deductions and credits under When To File, later. 1040nr Exceptions. 1040nr   You do not need to file Form 1040NR or Form 1040NR-EZ if you meet either of the following conditions. 1040nr Your only U. 1040nr S. 1040nr trade or business was the performance of personal services, and Your wages were less than $3,900, and You have no other need to file a return to claim a refund of overwithheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty. 1040nr You were a nonresident alien student, teacher, or trainee who was temporarily present in the United States under an “F,” “J,” “M,” or “Q” visa and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc. 1040nr Even if you have left the United States and filed a Form 1040-C, U. 1040nr S. 1040nr Departing Alien Income Tax Return, on departure, you still must file an annual U. 1040nr S. 1040nr income tax return. 1040nr If you are married and both you and your spouse are required to file, you must each file a separate return. 1040nr Form 1040NR-EZ You can use Form 1040NR-EZ if all of the following conditions are met. 1040nr You do not claim any dependents. 1040nr You cannot be claimed as a dependent on someone else's U. 1040nr S. 1040nr tax return. 1040nr If you were married, you do not claim an exemption for your spouse. 1040nr Your taxable income is less than $100,000. 1040nr The only itemized deduction you can claim is for state and local income taxes. 1040nr Note. 1040nr Residents of India who were students or business apprentices may be able to take the standard deduction instead of the itemized deduction for state and local income taxes. 1040nr See chapter 5. 1040nr Your only U. 1040nr S. 1040nr source income is from wages, salaries, tips, taxable refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. 1040nr (If you had taxable interest or dividend income, you cannot use this form. 1040nr ) You are not claiming any adjustments to income other than the student loan interest deduction or scholarship and fellowship grants excluded. 1040nr You are not claiming any tax credits. 1040nr This is not an “expatriation return. 1040nr ” See Expatriation Tax in chapter 4. 1040nr The only taxes you owe are: The income tax from the Tax Table. 1040nr The social security and Medicare tax from Form 4137 or Form 8919. 1040nr You are not claiming a credit for excess social security and tier 1 RRTA tax withheld. 1040nr You are not filing Form 8959, to figure the amount of Additional Medicare Tax you owe and/or the amount of Additional Medicare Tax withheld by your employer, if any. 1040nr If you do not meet all of the above conditions, you must file Form 1040NR. 1040nr When To File If you are an employee and you receive wages subject to U. 1040nr S. 1040nr income tax withholding, you will generally file by the 15th day of the 4th month after your tax year ends. 1040nr For the 2013 calendar year, file your return by April 15, 2014. 1040nr If you are not an employee who receives wages subject to U. 1040nr S. 1040nr income tax withholding, you must file by the 15th day of the 6th month after your tax year ends. 1040nr For the 2013 calendar year, file your return by June 16, 2014 (because June 15 is a Sunday. 1040nr ) Extensions of time to file. 1040nr   If you cannot file your return by the due date, file Form 4868 or use one of the electronic filing options explained in the Form 4868 instructions. 1040nr For the 2013 calendar year, this will extend the due date to October 15, 2014 (December 15, 2014, if the regular due date of your return is June 16, 2014). 1040nr You must file the extension by the regular due date of your return. 1040nr   In addition to the 6-month extension to October 15, taxpayers whose main place of business is outside the United States and Puerto Rico and who live outside those jurisdictions can request a discretionary 2-month extension of time to file their returns (to December 15 for calendar year taxpayers). 1040nr To request this extension, you must send the IRS a letter explaining the reasons why you need the additional 2 months. 1040nr Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address: Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215   You will not receive any notification from the IRS unless your request is denied for being untimely. 1040nr When to file for deductions and credits. 1040nr   To get the benefit of any allowable deductions or credits, you must timely file a true and accurate return. 1040nr For this purpose, a return is timely if it is filed within 16 months of the due date just discussed. 1040nr However, if you did not file a 2012 tax return and 2013 is not the first year for which you are required to file one, your 2013 return is timely for this purpose if it is filed by the earlier of: The date that is 16 months after the due date for filing your 2013 return, or The date the IRS notifies you that your 2013 return has not been filed and that you cannot claim certain deductions and credits. 1040nr The allowance of the following credits is not affected by this time requirement. 1040nr Credit for withheld taxes. 1040nr Credit for excise tax on certain uses of gasoline and special fuels. 1040nr Credit for tax paid by a mutual fund (or other regulated investment company) or a real estate investment trust on undistributed long-term capital gains. 1040nr Protective return. 1040nr   If your activities in the United States were limited and you do not believe that you had any gross income effectively connected with a U. 1040nr S. 1040nr trade or business during the year, you can file a protective return (Form 1040NR) by the deadline explained above. 1040nr By filing a protective return, you protect your right to receive the benefit of deductions and credits in the event it is later determined that some or all of your income is effectively connected. 1040nr You are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed. 1040nr   If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. 1040nr To protect your right to claim deductions or credits resulting from other activities, attach a statement to that return explaining that you wish to protect your right to claim deductions and credits if it is later determined that the other activities produced effectively connected income. 1040nr   You can follow the same procedure if you believe you have no U. 1040nr S. 1040nr tax liability because of a U. 1040nr S. 1040nr tax treaty. 1040nr Be sure to also complete item L on page 5 of Form 1040NR. 1040nr Waiver of filing deadline. 1040nr   The IRS may waive the filing deadline if you establish that, based on the facts and circumstances, you acted reasonably and in good faith in failing to file a U. 1040nr S. 1040nr income tax return (including a protective return) and you cooperate with the IRS in determining your U. 1040nr S. 1040nr income tax liability for the tax year for which you did not file a return. 1040nr Where To File If you are not enclosing a payment, file Form 1040NR-EZ and Form 1040NR at the following address. 1040nr  Department of the Treasury Internal Revenue Service Center Austin, TX 73301-0215 If enclosing a payment, mail your return to:  Internal Revenue Service  P. 1040nr O. 1040nr Box 1303 Charlotte, NC 28201-1303 Aliens from the U. 1040nr S. 1040nr Virgin Islands. 1040nr    If you are a bona fide resident of the U. 1040nr S. 1040nr Virgin Islands during your entire tax year and work temporarily in the United States, you must pay your income taxes to the U. 1040nr S. 1040nr Virgin Islands and file your income tax returns at the following address. 1040nr Virgin Islands Bureau of Internal Revenue 6115 Estate Smith Bay Suite 225 St. 1040nr Thomas, VI 00802   Report all income from U. 1040nr S. 1040nr sources, as well as income from other sources, on your return. 1040nr For information on filing U. 1040nr S. 1040nr Virgin Islands returns, contact the U. 1040nr S. 1040nr Virgin Islands Bureau of Internal Revenue. 1040nr   Chapter 8 discusses withholding from U. 1040nr S. 1040nr wages of U. 1040nr S. 1040nr Virgin Islanders. 1040nr Aliens from Guam or the Commonwealth of the Northern Mariana Islands. 1040nr   If you are a bona fide resident of Guam or the Commonwealth of the Northern Mariana Islands (CNMI) during your entire tax year, you must file your return with, and pay any tax due to, Guam or the CNMI. 1040nr Report all income, including income from U. 1040nr S. 1040nr sources, on your return. 1040nr It is not necessary to file a separate U. 1040nr S. 1040nr income tax return. 1040nr    Bona fide residents of Guam should file their Guam returns at the following address. 1040nr   Department of Revenue and Taxation Government of Guam P. 1040nr O. 1040nr Box 23607 GMF, GU 96921    Bona fide residents of the CNMI should file their CNMI income tax returns at the following address. 1040nr   Department of Finance Division of Revenue and Taxation Commonwealth of the Northern Mariana Islands P. 1040nr O. 1040nr Box 5234 CHRB Saipan, MP 96950   If you are not a bona fide resident of Guam or the CNMI, see Pub. 1040nr 570, Tax Guide for Individuals With Income From U. 1040nr S. 1040nr Possessions, for information on where to file your return. 1040nr Amended Returns and Claims for Refund If you find changes in your income, deductions, or credits after you mail your return, file Form 1040X, Amended U. 1040nr S. 1040nr Individual Income Tax Return. 1040nr Also use Form 1040X if you should have filed Form 1040, 1040A, or 1040EZ instead of Form 1040NR or 1040NR-EZ, or vice versa. 1040nr If you amend Form 1040NR or Form 1040NR-EZ or file the correct return, attach the corrected return (Form 1040, Form 1040NR, etc. 1040nr ) to Form 1040X. 1040nr Print “Amended” across the top. 1040nr Ordinarily, an amended return claiming a refund must be filed within 3 years from the date your return was filed or within 2 years from the time the tax was paid, whichever is later. 1040nr A return filed before the final due date is considered to have been filed on the due date. 1040nr Other Forms You May Have To File You may be required to file information returns to report certain foreign income or assets, or monetary transactions. 1040nr FinCen Form 105 FinCEN Form 105 (formerly Customs Form 4790), Report of International Transportation of Currency or Monetary Instruments, must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. 1040nr The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States. 1040nr The term “monetary instruments” means the following: Coin and currency of the United States or of any other country, Travelers' checks in any form, Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery, Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted. 1040nr However, the term does not include: Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements, Warehouse receipts, or Bills of lading. 1040nr A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105. 1040nr Filing requirements. 1040nr   FinCEN Form 105 filing requirements follow. 1040nr Recipients. 1040nr   Each person who receives currency or other monetary instruments in the United States must file FinCEN Form 105 within 15 days after receipt, with the Customs officer in charge at any port of entry or departure, or by mail at the following address. 1040nr Commissioner of Customs  Attention: Currency Transportation Reports Washington, DC 20229 Shippers or mailers. 1040nr   If the currency or other monetary instrument does not accompany the person entering or departing the United States, FinCEN Form 105 can be filed by mail at the above address on or before the date of entry, departure, mailing, or shipping. 1040nr Travelers. 1040nr   Travelers must file FinCEN Form 105 with the Customs officer in charge at any Customs port of entry or departure, when entering or departing the United States. 1040nr Penalties. 1040nr   Civil and criminal penalties are provided for failing to file a report, filing a report containing material omissions or misstatements, or filing a false or fraudulent report. 1040nr Also, the entire amount of the currency or monetary instrument may be subject to seizure and forfeiture. 1040nr More information. 1040nr   More information regarding the filing of FinCEN Form 105 can be found in the instructions on the back of the form. 1040nr Form 8938 You may have to file Form 8938, Statement of Specified Foreign Financial Assets, to report the ownership of specified foreign financial asset(s) if you are one of the following individuals. 1040nr A resident alien of the United States for any part of the tax year. 1040nr A resident alien of the United States who elects to be treated as a resident of a foreign country under the provisions of a U. 1040nr S. 1040nr income tax treaty. 1040nr See Effect of Tax Treaties in chapter 1. 1040nr A nonresident alien who makes an election to be treated as a resident alien for purposes of filing a joint income tax return. 1040nr See chapter 1 for information about this election. 1040nr A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico. 1040nr See Publication 570, Tax Guide for Individuals With Income From U. 1040nr S. 1040nr Possessions, for a definition of bona fide resident. 1040nr You must file Form 8938 if the total value of those assets exceeds an applicable threshold (the “reporting threshold”). 1040nr The reporting threshold varies depending on whether you live in the United States, are married, or file a joint income tax return with your spouse. 1040nr Specified foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a U. 1040nr S. 1040nr person. 1040nr You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if you have an understatement of tax due to any transaction involving an undisclosed foreign financial asset. 1040nr More information about the filing of Form 8938 can be found in the separate instructions for Form 8938. 1040nr Penalties The law provides penalties for failure to file returns or pay taxes as required. 1040nr Civil Penalties If you do not file your return and pay your tax by the due date, you may have to pay a penalty. 1040nr You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax submission, or fail to supply your taxpayer identification number. 1040nr If you provide fraudulent information on your return, you may have to pay a civil fraud penalty. 1040nr Filing late. 1040nr   If you do not file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. 1040nr The penalty is based on the tax not paid by the due date (without regard to extensions). 1040nr The penalty is usually 5% for each month or part of a month that a return is late, but not more than 25%. 1040nr Fraud. 1040nr   If your failure to file is due to fraud, the penalty is 15% for each month or part of a month that your return is late, up to a maximum of 75%. 1040nr Return over 60 days late. 1040nr   If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. 1040nr Exception. 1040nr   You will not have to pay the penalty if you show that you failed to file on time because of reasonable cause and not because of willful neglect. 1040nr Paying tax late. 1040nr   You will have to pay a failure-to-pay penalty of ½ of 1% (. 1040nr 50%) of your unpaid taxes for each month, or part of a month, after the due date that the tax is not paid. 1040nr This penalty does not apply during the automatic 6-month extension of time to file period, if you paid at least 90% of your actual tax liability on or before the due date of your return and pay the balance when you file the return. 1040nr   The monthly rate of the failure-to-pay penalty is half the usual rate (. 1040nr 25% instead of . 1040nr 50%) if an installment agreement is in effect for that month. 1040nr You must have filed your return by the due date (including extensions) to qualify for this reduced penalty. 1040nr   If a notice of intent to levy is issued, the rate will increase to 1% at the start of the first month beginning at least 10 days after the day that the notice is issued. 1040nr If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and demand is issued. 1040nr   This penalty cannot be more than 25% of your unpaid tax. 1040nr You will not have to pay the penalty if you can show that you had a good reason for not paying your tax on time. 1040nr Combined penalties. 1040nr   If both the failure-to-file penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or 15%) failure-to-file penalty is reduced by the failure-to-pay penalty. 1040nr However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax. 1040nr Accuracy-related penalty. 1040nr   You may have to pay an accuracy-related penalty if you underpay your tax because: You show negligence or disregard of rules or regulations, You substantially understate your income tax, You claim tax benefits for a transaction that lacks economic substance, or You fail to disclose a foreign financial asset. 1040nr The penalty is equal to 20% of the underpayment. 1040nr The penalty is 40% of any portion of the underpayment that is attributable to an undisclosed noneconomic substance transaction or an undisclosed foreign financial asset transaction. 1040nr The penalty will not be figured on any part of an underpayment on which the fraud penalty (discussed later) is charged. 1040nr Negligence or disregard. 1040nr   The term “negligence” includes a failure to make a reasonable attempt to comply with the tax law or to exercise ordinary and reasonable care in preparing a return. 1040nr Negligence also includes failure to keep adequate books and records. 1040nr You will not have to pay a negligence penalty if you have a reasonable basis for a position you took. 1040nr   The term “disregard” includes any careless, reckless, or intentional disregard. 1040nr Adequate disclosure. 1040nr   You can avoid the penalty for disregard of rules or regulations if you adequately disclose on your return a position that has at least a reasonable basis. 1040nr See Disclosure statement , later. 1040nr   This exception will not apply to an item that is attributable to a tax shelter. 1040nr In addition, it will not apply if you fail to keep adequate books and records, or substantiate items properly. 1040nr Substantial understatement of income tax. 1040nr   You understate your tax if the tax shown on your return is less than the correct tax. 1040nr The understatement is substantial if it is more than the larger of 10% of the correct tax or $5,000. 1040nr However, the amount of the understatement is reduced to the extent the understatement is due to: Substantial authority, or Adequate disclosure and a reasonable basis. 1040nr   If an item on your return is attributable to a tax shelter, there is no reduction for an adequate disclosure. 1040nr However, there is a reduction for a position with substantial authority, but only if you reasonably believed that your tax treatment was more likely than not the proper treatment. 1040nr Substantial authority. 1040nr   Whether there is or was substantial authority for the tax treatment of an item depends on the facts and circumstances. 1040nr Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue procedures, and notices and announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as yours. 1040nr Disclosure statement. 1040nr   To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure Statement. 1040nr You must also have a reasonable basis for treating the item the way you did. 1040nr   In cases of substantial understatement only, items that meet the requirements of Revenue Procedure 2012-51, 2012-51 IRB 719 (or later update) are considered adequately disclosed on your return without filing Form 8275. 1040nr   Use Form 8275-R, Regulation Disclosure Statement, to disclose items or positions contrary to regulations. 1040nr Transaction lacking economic substance. 1040nr   For more information on economic substance, see section 7701(o). 1040nr Foreign financial asset. 1040nr   For more information on undisclosed foreign financial assets, see section 6662(j) or the Instructions for Form 8938. 1040nr Reasonable cause. 1040nr   You will not have to pay a penalty if you show a good reason (reasonable cause) for the way you treated an item. 1040nr You must also show that you acted in good faith. 1040nr This does not apply to a transaction that lacks economic substance. 1040nr Filing erroneous claim for refund or credit. 1040nr   You may have to pay a penalty if you file an erroneous claim for refund or credit. 1040nr The penalty is equal to 20% of the disallowed amount of the claim, unless you can show a reasonable basis for the way you treated an item. 1040nr However, any disallowed amount due to a transaction that lacks economic substance will not be treated as having a reasonable basis. 1040nr The penalty will not be figured on any part of the disallowed amount of the claim that relates to the earned income credit or on which the accuracy-related or fraud penalties are charged. 1040nr Frivolous tax submission. 1040nr   You may have to pay a penalty of $5,000 if you file a frivolous tax return or other frivolous submissions. 1040nr A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing that the tax you reported is substantially incorrect. 1040nr For more information on frivolous returns, frivolous submissions, and a list of positions that are identified as frivolous, see Notice 2010-33, 2010-17 IRB 609 available at www. 1040nr irs. 1040nr gov/irb/2010-17_irb/ar13. 1040nr html. 1040nr   You will have to pay the penalty if you filed this kind of return or submission based on a frivolous position or a desire to delay or interfere with the administration of federal tax laws. 1040nr This includes altering or striking out the preprinted language above the space provided for your signature. 1040nr   This penalty is added to any other penalty provided by law. 1040nr Fraud. 1040nr   If there is any underpayment of tax on your return due to fraud, a penalty of 75% of the underpayment due to fraud will be added to your tax. 1040nr Failure to supply taxpayer identification number. 1040nr   If you do not include your social security number (SSN) or individual taxpayer identification number (ITIN) or the SSN or ITIN of another person where required on a return, statement, or other document, you will be subject to a penalty of $50 for each failure. 1040nr You will also be subject to a penalty of $50 if you do not give your SSN or ITIN to another person when it is required on a return, statement, or other document. 1040nr   For example, if you have a bank account that earns interest, you must give your SSN or ITIN to the bank. 1040nr The number must be shown on the Form 1099-INT or other statement the bank sends you. 1040nr If you do not give the bank your SSN or ITIN, you will be subject to the $50 penalty. 1040nr (You also may be subject to “backup” withholding of income tax. 1040nr )   You will not have to pay the penalty if you are able to show that the failure was due to reasonable cause and not willful neglect. 1040nr Criminal Penalties You may be subject to criminal prosecution (brought to trial) for actions such as: Tax evasion, Willful failure to file a return, supply information, or pay any tax due, Fraud and false statements, or Preparing and filing a fraudulent return. 1040nr Prev  Up  Next   Home   More Online Publications