Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

How To Amend Your Taxes

Military Tax FilingWhere Can I Get 2012 Federal Tax FormsHow To Amend A Tax Return 2012Unemployment Tax FormMilitaryTaxes Free OnlineFree Irs And State Tax FilingHow To File 2011 Taxes For FreeWhere To File 2011 Tax ReturnCan You Do State Taxes For FreeIrs 2012 Tax Form2012 Tax Forms FederalFile Amended Return Online2011 Tax TablesFile Back Tax Online2006 Tax ReturnFree 1040ezCan I File My State Taxes Online For FreeHow To Fill Out A 1040x Step By Step1040ez2013 Form1040x1040ez Tax Form 2010Free State Tax Forms To PrintHelp Filing 1040x2014 1040ez FormH And R Block MilitaryEz Form Online2012 Amended Tax ReturnMilitary Tax ReturnW1040Free E File And Free State Tax FilingFree H And R Block MilitaryCan I Do My 2012 Taxes NowIrs GovIrs FormsWww Free1040taxreturn ComE File State Taxes FreeFiling Free State Taxes Online2012 Tax Forms IrsIrs Com

How To Amend Your Taxes

How to amend your taxes Publication 1212 - Main Content Table of Contents Definitions Debt Instruments on the OID List Debt Instruments Not on the OID List Information for Brokers and Other MiddlemenShort-Term Obligations Redeemed at Maturity Long-Term Debt Instruments Certificates of Deposit Bearer Bonds and Coupons Backup Withholding Information for Owners of OID Debt InstrumentsExceptions. How to amend your taxes Adjustment for premium. How to amend your taxes Adjustment for acquisition premium. How to amend your taxes Adjustment for market discount. How to amend your taxes Form 1099-OID How To Report OID Figuring OID on Long-Term Debt Instruments Figuring OID on Stripped Bonds and Coupons How To Get Tax HelpLow Income Taxpayer Clinics Definitions The following terms are used throughout this publication. How to amend your taxes “Original issue discount” is defined first. How to amend your taxes The other terms are listed alphabetically. How to amend your taxes Original issue discount (OID). How to amend your taxes   OID is a form of interest. How to amend your taxes It is the excess of a debt instrument's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). How to amend your taxes Zero coupon bonds and debt instruments that pay no stated interest until maturity are examples of debt instruments that have OID. How to amend your taxes Accrual period. How to amend your taxes   An accrual period is an interval of time used to measure OID. How to amend your taxes The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued. How to amend your taxes Acquisition premium. How to amend your taxes   Acquisition premium is the excess of a debt instrument's adjusted basis immediately after purchase, including purchase at original issue, over the debt instrument's adjusted issue price at that time. How to amend your taxes A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. How to amend your taxes See Premium, later. How to amend your taxes Adjusted issue price. How to amend your taxes   The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure the OID allocable to that period. How to amend your taxes In general, the adjusted issue price at the beginning of the debt instrument's first accrual period is its issue price. How to amend your taxes The adjusted issue price at the beginning of any subsequent accrual period is the sum of the issue price and all the OID includible in income before that accrual period minus any payment previously made on the debt instrument, other than a payment of qualified stated interest. How to amend your taxes Debt instrument. How to amend your taxes   The term “debt instrument” means any instrument or contractual arrangement that constitutes indebtedness under general principles of federal income tax law (including, for example, a bond, debenture, note, certificate, or other evidence of indebtedness). How to amend your taxes It generally does not include an annuity contract. How to amend your taxes Issue price. How to amend your taxes   For debt instruments listed in Section I-A and Section I-B, the issue price generally is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of these instruments was sold. How to amend your taxes Market discount. How to amend your taxes   Market discount arises when a debt instrument purchased in the secondary market has decreased in value since its issue date, generally because of an increase in interest rates. How to amend your taxes An OID debt instrument has market discount if your adjusted basis in the debt instrument immediately after you acquired it (usually its purchase price) was less than the debt instrument's issue price plus the total OID that accrued before you acquired it. How to amend your taxes The market discount is the difference between the issue price plus accrued OID and your adjusted basis. How to amend your taxes Premium. How to amend your taxes   A debt instrument is purchased at a premium if its adjusted basis immediately after purchase is greater than the total of all amounts payable on the debt instrument after the purchase date, other than qualified stated interest. How to amend your taxes The premium is the excess of the adjusted basis over the payable amounts. How to amend your taxes See Publication 550 for information on the tax treatment of bond premium. How to amend your taxes Qualified stated interest. How to amend your taxes   In general, qualified stated interest is stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually over the term of the debt instrument at a single fixed rate. How to amend your taxes Stated redemption price at maturity. How to amend your taxes   A debt instrument's stated redemption price at maturity is the sum of all amounts (principal and interest) payable on the debt instrument other than qualified stated interest. How to amend your taxes Yield to maturity (YTM). How to amend your taxes   In general, the YTM is the discount rate that, when used in figuring the present value of all principal and interest payments, produces an amount equal to the issue price of the debt instrument. How to amend your taxes The YTM is generally shown on the face of the debt instrument or in the literature you receive from your broker. How to amend your taxes If you do not have this information, consult your broker, tax advisor, or the issuer. How to amend your taxes Debt Instruments on the OID List The OID list on the IRS website can be used by brokers and other middlemen to prepare information returns. How to amend your taxes If you own a listed debt instrument, you generally should not rely on the information in the OID list to determine (or compare) the OID to be reported on your tax return. How to amend your taxes The OID amounts listed are figured without reference to the price or date at which you acquired the debt instrument. How to amend your taxes For information about determining the OID to be reported on your tax return, see the instructions for figuring OID under Information for Owners of OID Debt Instruments, later. How to amend your taxes The following discussions explain what information is contained in each section of the list. How to amend your taxes Section I. How to amend your taxes   This section contains publicly offered, long-term debt instruments. How to amend your taxes Section I-A: Corporate Debt Instruments Issued Before 1985. How to amend your taxes Section I-B: Corporate Debt Instruments Issued After 1984. How to amend your taxes Section I-C: Inflation-Indexed Debt Instruments. How to amend your taxes For each publicly offered debt instrument in Section I, the list contains the following information. How to amend your taxes The name of the issuer. How to amend your taxes The Committee on Uniform Security Identification Procedures (CUSIP) number. How to amend your taxes The issue date. How to amend your taxes The maturity date. How to amend your taxes The issue price expressed as a percent of principal or of stated redemption price at maturity. How to amend your taxes The annual stated or coupon interest rate. How to amend your taxes (This rate is shown as 0. How to amend your taxes 00 if no annual interest payments are provided. How to amend your taxes ) The yield to maturity will be added to Section I-B for bonds issued after December 31, 2006. How to amend your taxes The total OID accrued up to January 1 of a calendar year. How to amend your taxes (This information is not available for every instrument. How to amend your taxes ) For long-term debt instruments issued after July 1, 1982, the daily OID for the accrual periods falling in a calendar year and a subsequent year. How to amend your taxes The total OID per $1,000 of principal or maturity value for a calendar year and a subsequent year. How to amend your taxes Section II. How to amend your taxes   This section contains stripped coupons and principal components of U. How to amend your taxes S. How to amend your taxes Treasury and Government-Sponsored Enterprise debt instruments. How to amend your taxes These stripped components are available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation. How to amend your taxes This section also includes debt instruments backed by U. How to amend your taxes S. How to amend your taxes Treasury securities that represent ownership interests in those securities. How to amend your taxes   The obligations listed in Section II are arranged by maturity date. How to amend your taxes The amounts listed are the total OID for a calendar year per $1,000 of redemption price. How to amend your taxes Section III. How to amend your taxes   This section contains short-term discount obligations. How to amend your taxes Section III-A: Short-Term U. How to amend your taxes S. How to amend your taxes Treasury Bills. How to amend your taxes Section III-B: Federal Home Loan Banks. How to amend your taxes Section III-C: Federal National Mortgage Association. How to amend your taxes Section III-D: Federal Farm Credit Banks. How to amend your taxes Section III-E: Federal Home Loan Mortgage Corporation. How to amend your taxes Section III-F: Federal Agricultural Mortgage Corporation. How to amend your taxes    Information that supplements Section III-A is available on the Internet at http://www. How to amend your taxes treasurydirect. How to amend your taxes gov/tdhome. How to amend your taxes htm. How to amend your taxes   The short-term obligations listed in this section are arranged by maturity date. How to amend your taxes For each obligation, the list contains the CUSIP number, maturity date, issue date, issue price (expressed as a percent of principal), and discount to be reported as interest for a calendar year per $1,000 of redemption price. How to amend your taxes Brokers and other middlemen should rely on the issue price information in Section III only if they are unable to determine the price actually paid by the owner. How to amend your taxes Debt Instruments Not on the OID List The list of debt instruments discussed earlier does not contain the following items. How to amend your taxes U. How to amend your taxes S. How to amend your taxes savings bonds. How to amend your taxes Certificates of deposit and other face-amount certificates issued at a discount, including syndicated certificates of deposit. How to amend your taxes Obligations issued by tax-exempt organizations. How to amend your taxes OID debt instruments that matured or were entirely called by the issuer before the tables were posted on the IRS website. How to amend your taxes Mortgage-backed securities and mortgage participation certificates. How to amend your taxes Long-term OID debt instruments issued before May 28, 1969. How to amend your taxes Short-term obligations, other than the obligations listed in Section III. How to amend your taxes Debt instruments issued at a discount by states or their political subdivisions. How to amend your taxes REMIC regular interests and CDOs. How to amend your taxes Commercial paper and banker's acceptances issued at a discount. How to amend your taxes Obligations issued at a discount by individuals. How to amend your taxes Foreign obligations not traded in the United States and obligations not issued in the United States. How to amend your taxes Information for Brokers and Other Middlemen The following discussions contain specific instructions for brokers and middlemen who hold or redeem a debt instrument for the owner. How to amend your taxes In general, you must file a Form 1099 for the debt instrument if the interest or OID to be included in the owner's income for a calendar year totals $10 or more. How to amend your taxes You also must file a Form 1099 if you were required to deduct and withhold tax, even if the interest or OID is less than $10. How to amend your taxes See Backup Withholding, later. How to amend your taxes If you must file a Form 1099, furnish a copy to the owner of the debt instrument by January 31 in the year it is due. How to amend your taxes File all your Forms 1099 with the IRS, accompanied by Form 1096, by February 28 in the year it is due (March 31 if you file electronically). How to amend your taxes Electronic payee statements. How to amend your taxes   You can issue Form 1099-OID electronically with the consent of the recipient. How to amend your taxes More information. How to amend your taxes   For more information, including penalties for failure to file (or furnish) required information returns or statements, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) for the appropriate calendar year. How to amend your taxes Short-Term Obligations Redeemed at Maturity If you redeem a short-term discount obligation for the owner at maturity, you must report the discount as interest on Form 1099-INT. How to amend your taxes To figure the discount, use the purchase price shown on the owner's copy of the purchase confirmation receipt or similar record, or the price shown in your transaction records. How to amend your taxes If you sell the obligation for the owner before maturity, you must file Form 1099-B to reflect the gross proceeds to the seller. How to amend your taxes Do not report the accrued discount to the date of sale on either Form 1099-INT or Form 1099-OID. How to amend your taxes If the owner's purchase price cannot be determined, figure the discount as if the owner had purchased the obligation at its original issue price. How to amend your taxes A special rule is used to determine the original issue price for information reporting on U. How to amend your taxes S. How to amend your taxes Treasury bills (T-bills) listed in Section III-A. How to amend your taxes Under this rule, you treat as the original issue price of the T-bill the noncompetitive (weighted average of accepted auction bids) discount price for the longest-maturity T-bill maturing on the same date as the T-bill being redeemed. How to amend your taxes This noncompetitive discount price is the issue price (expressed as a percent of principal) shown in Section III-A. How to amend your taxes A similar rule is used to figure the discount on short-term discount obligations issued by the organizations listed in Section III-B through Section III-F. How to amend your taxes Example 1. How to amend your taxes There are 13-week and 26-week T-bills maturing on the same date as the T-bill being redeemed. How to amend your taxes The price actually paid by the owner cannot be established by owner or middleman records. How to amend your taxes You treat as the issue price of the T-bill the noncompetitive discount price (expressed as a percent of principal) shown in Section III-A for a 26-week bill maturing on the same date as the T-bill redeemed. How to amend your taxes The interest you report on Form 1099-INT is the OID (per $1,000 of principal) shown in Section III-A for that obligation. How to amend your taxes Long-Term Debt Instruments If you hold a long-term OID debt instrument as a nominee for the true owner, you generally must file Form 1099-OID. How to amend your taxes For this purpose, you can rely on Section I of the OID list to determine the following information. How to amend your taxes Whether a debt instrument has OID. How to amend your taxes The OID to be reported on the Form 1099-OID. How to amend your taxes In general, you must report OID on publicly offered, long-term debt instruments listed in Section I. How to amend your taxes You also can report OID on other long-term debt instruments. How to amend your taxes Form 1099-OID. How to amend your taxes   On Form 1099-OID for a calendar year show the following information. How to amend your taxes Box 1. How to amend your taxes The OID for the actual dates the owner held the debt instruments during a calendar year. How to amend your taxes To determine this amount, see Figuring OID, next. How to amend your taxes Box 2. How to amend your taxes The qualified stated interest paid or credited during the calendar year. How to amend your taxes Interest reported here is not reported on Form 1099-INT. How to amend your taxes The qualified stated interest on Treasury inflation-protected securities may be reported on Form 1099-INT in box 3 instead. How to amend your taxes Box 3. How to amend your taxes Any interest or principal forfeited because of an early withdrawal that the owner can deduct from gross income. How to amend your taxes Do not reduce the amounts in boxes 1 and 2 by the forfeiture. How to amend your taxes Box 4. How to amend your taxes Any backup withholding for this debt instrument. How to amend your taxes Box 7. How to amend your taxes The CUSIP number, if any. How to amend your taxes If there is no CUSIP number, give a description of the debt instrument, including the abbreviation for the stock exchange, the abbreviation used by the stock exchange for the issuer, the coupon rate, and the year of maturity (for example, NYSE XYZ 12. How to amend your taxes 50 2006). How to amend your taxes If the issuer of the debt instrument is other than the payer, show the name of the issuer in this box. How to amend your taxes Box 8. How to amend your taxes The OID on a U. How to amend your taxes S. How to amend your taxes Treasury obligation for the part of the year the owner held the debt instrument. How to amend your taxes Box 9. How to amend your taxes Investment expenses passed on to holders of a single-class REMIC. How to amend your taxes Boxes 10-12. How to amend your taxes Use to report any state income tax withheld for this debt instrument. How to amend your taxes Figuring OID. How to amend your taxes   You can determine the OID on a long-term debt instrument by using either of the following. How to amend your taxes Section I of the OID list. How to amend your taxes The income tax regulations. How to amend your taxes Using Section I. How to amend your taxes   If the owner held the debt instrument for the entire calendar year, report the OID shown in Section I for the calendar year. How to amend your taxes Because OID is listed for each $1,000 of stated redemption price at maturity, you must adjust the listed amount to reflect the debt instrument's actual stated redemption price at maturity. How to amend your taxes For example, if the debt instrument's stated redemption price at maturity is $500, report one-half the listed OID. How to amend your taxes   If the owner held the debt instrument for less than the entire calendar year, figure the OID to report as follows. How to amend your taxes Look up the daily OID for the first accrual period in the calendar year during which the owner held the debt instrument. How to amend your taxes Multiply the daily OID by the number of days the owner held the debt instrument during that accrual period. How to amend your taxes Repeat steps (1) and (2) for any remaining accrual periods for the year during which the owner held the debt instrument. How to amend your taxes Add the results in steps (2) and (3) to determine the owner's OID per $1,000 of stated redemption price at maturity. How to amend your taxes If necessary, adjust the OID in (4) to reflect the debt instrument's stated redemption price at maturity. How to amend your taxes Report the result on Form 1099-OID in box 1. How to amend your taxes Using the income tax regulations. How to amend your taxes   Instead of using Section I to figure OID, you can use the regulations under sections 1272 through 1275 of the Internal Revenue Code. How to amend your taxes For example, under the regulations, you can use monthly accrual periods in figuring OID for a debt instrument issued after April 3, 1994, that provides for monthly payments. How to amend your taxes (If you use Section I-B, the OID is figured using 6-month accrual periods. How to amend your taxes )   For a general explanation of the rules for figuring OID under the regulations, see Figuring OID on Long-Term Debt Instruments under Information for Owners of OID Debt Instruments, later. How to amend your taxes Certificates of Deposit If you hold a bank certificate of deposit (CD) as a nominee, you must determine whether the CD has OID and any OID includible in the income of the owner. How to amend your taxes You must file an information return showing the reportable interest and OID, if any, on the CD. How to amend your taxes These rules apply whether or not you sold the CD to the owner. How to amend your taxes Report OID on a CD in the same way as OID on other debt instruments. How to amend your taxes See Short-Term Obligations Redeemed at Maturity and Long-Term Debt Instruments, earlier. How to amend your taxes Bearer Bonds and Coupons If a coupon from a bearer bond is presented to you for collection before the bond matures, you generally must report the interest on Form 1099-INT. How to amend your taxes However, do not report the interest if either of the following apply. How to amend your taxes You hold the bond as a nominee for the true owner. How to amend your taxes The payee is a foreign person. How to amend your taxes See Payments to foreign person under Backup Withholding, later. How to amend your taxes Because you cannot assume the presenter of the coupon also owns the bond, you should not report OID on the bond on Form 1099-OID. How to amend your taxes The coupon may have been “stripped” (separated) from the bond and separately purchased. How to amend your taxes However, if a long-term bearer bond on the OID list is presented to you for redemption upon call or maturity, you should prepare a Form 1099-OID showing the OID for that calendar year, as well as any coupon interest payments collected at the time of redemption. How to amend your taxes Backup Withholding If you report OID on Form 1099-OID or interest on Form 1099-INT for a calendar year, you may be required to apply backup withholding to the reportable payment at a rate of 28%. How to amend your taxes The backup withholding is deducted at the time a cash payment is made. How to amend your taxes See Pub. How to amend your taxes 1281, Backup Withholding for Missing and Incorrect Name/TIN(s), for more information. How to amend your taxes Backup withholding generally applies in the following situations. How to amend your taxes The payee does not give you a taxpayer identification number (TIN). How to amend your taxes The IRS notifies you that the payee gave an incorrect TIN. How to amend your taxes The IRS notifies you that the payee is subject to backup withholding due to payee underreporting. How to amend your taxes For debt instruments acquired after 1983: The payee does not certify, under penalties of perjury, that he or she is not subject to backup withholding under (3), or The payee does not certify, under penalties of perjury, that the TIN given is correct. How to amend your taxes However, for short-term discount obligations (other than government obligations), bearer bonds and coupons, and U. How to amend your taxes S. How to amend your taxes savings bonds, backup withholding applies only if the payee does not give you a TIN or gives you an obviously incorrect number for a TIN. How to amend your taxes Short-term obligations. How to amend your taxes   Backup withholding applies to OID on a short-term obligation only when the OID is paid at maturity. How to amend your taxes However, backup withholding applies to any interest payable before maturity when the interest is paid or credited. How to amend your taxes   If the owner of a short-term obligation at maturity is not the original owner and can establish the purchase price of the obligation, the amount subject to backup withholding must be determined by treating the purchase price as the issue price. How to amend your taxes However, you can choose to disregard that price if it would require significant manual intervention in the computer or recordkeeping system used for the obligation. How to amend your taxes If the purchase price of a listed obligation is not established or is disregarded, you must use the issue price shown in Section III. How to amend your taxes Long-term obligations. How to amend your taxes   If no cash payments are made on a long-term obligation before maturity, backup withholding applies only at maturity. How to amend your taxes The amount subject to backup withholding is the OID includible in the owner's gross income for the calendar year when the obligation matures. How to amend your taxes The amount to be withheld is limited to the cash paid. How to amend your taxes Registered long-term obligations with cash payments. How to amend your taxes   If a registered long-term obligation has cash payments before maturity, backup withholding applies when a cash payment is made. How to amend your taxes The amount subject to backup withholding is the total of the qualified stated interest (defined earlier under Definitions) and OID includible in the owner's gross income for the calendar year when the payment is made. How to amend your taxes If more than one cash payment is made during the year, the OID subject to withholding for the year must be allocated among the expected cash payments in the ratio that each bears to the total of the expected cash payments. How to amend your taxes For any payment, the required withholding is limited to the cash paid. How to amend your taxes Payee not the original owner. How to amend your taxes   If the payee is not the original owner of the obligation, the OID subject to backup withholding is the OID includible in the gross income of all owners during the calendar year (without regard to any amount paid by the new owner at the time of transfer). How to amend your taxes The amount subject to backup withholding at maturity of a listed obligation must be determined using the issue price shown in Section I. How to amend your taxes Bearer long-term obligations with cash payments. How to amend your taxes   If a bearer long-term obligation has cash payments before maturity, backup withholding applies when the cash payments are made. How to amend your taxes For payments before maturity, the amount subject to withholding is the qualified stated interest (defined earlier under Definitions) includible in the owner's gross income for the calendar year. How to amend your taxes For a payment at maturity, the amount subject to withholding is only the total of any qualified stated interest paid at maturity and the OID includible in the owner's gross income for the calendar year when the obligation matures. How to amend your taxes The required withholding at maturity is limited to the cash paid. How to amend your taxes Sales and redemptions. How to amend your taxes   If you report the gross proceeds from a sale, exchange, or redemption of a debt instrument on Form 1099-B for a calendar year, you may be required to withhold 28% of the amount reported. How to amend your taxes Backup withholding applies in the following situations. How to amend your taxes The payee does not give you a TIN. How to amend your taxes The IRS notifies you that the payee gave an incorrect TIN. How to amend your taxes For debt instruments held in an account opened after 1983, the payee does not certify, under penalties of perjury, that the TIN given is correct. How to amend your taxes Payments outside the United States to U. How to amend your taxes S. How to amend your taxes person. How to amend your taxes   The requirements for backup withholding and information reporting apply to payments of OID and interest made outside the United States to a U. How to amend your taxes S. How to amend your taxes person, a controlled foreign corporation, or a foreign person at least 50% of whose income for the preceding 3-year period is effectively connected with the conduct of a U. How to amend your taxes S. How to amend your taxes trade or business. How to amend your taxes Payments to foreign person. How to amend your taxes   The following discussions explain the rules for backup withholding and information reporting on payments to foreign persons. How to amend your taxes U. How to amend your taxes S. How to amend your taxes -source amount. How to amend your taxes   Backup withholding and information reporting are not required for payments of U. How to amend your taxes S. How to amend your taxes -source OID, interest, or proceeds from a sale or redemption of an OID instrument if the payee has given you proof (generally the appropriate Form W-8 or an acceptable substitute) that the payee is a foreign person. How to amend your taxes A U. How to amend your taxes S. How to amend your taxes resident is not a foreign person. How to amend your taxes For proof of the payee's foreign status, you can rely on the appropriate Form W-8 or on documentary evidence for payments made outside the United States to an offshore account or, in case of broker proceeds, a sale effected outside the United States. How to amend your taxes Receipt of the appropriate Form W-8 does not relieve you from information reporting and backup withholding if you actually know the payee is a U. How to amend your taxes S. How to amend your taxes person. How to amend your taxes   For information about the 28% withholding tax that may apply to payments of U. How to amend your taxes S. How to amend your taxes -source OID or interest to foreign persons, see Publication 515. How to amend your taxes Foreign-source amount. How to amend your taxes   Backup withholding and information reporting are not required for payments of foreign-source OID and interest made outside the United States. How to amend your taxes However, if the payments are made inside the United States, the requirements for backup withholding and information reporting will apply unless the payee has given you the appropriate Form W-8 or acceptable substitute as proof that the payee is a foreign person. How to amend your taxes More information. How to amend your taxes   For more information about backup withholding and information reporting on foreign-source amounts or payments to foreign persons, see Regulations section 1. How to amend your taxes 6049-5. How to amend your taxes Information for Owners of OID Debt Instruments This section is for persons who prepare their own tax returns. How to amend your taxes It discusses the income tax rules for figuring and reporting OID on long-term debt instruments. How to amend your taxes It also includes a similar discussion for stripped bonds and coupons, such as zero coupon bonds available through the Department of the Treasury's STRIPS program and government-sponsored enterprises such as the Resolution Funding Corporation. How to amend your taxes However, the information provided does not cover every situation. How to amend your taxes More information can be found in the regulations under sections 1271 through 1275 of the Internal Revenue Code. How to amend your taxes Including OID in income. How to amend your taxes   Generally, you include OID in income as it accrues each year, whether or not you receive any payments from the debt instrument issuer. How to amend your taxes Exceptions. How to amend your taxes   The rules for including OID in income as it accrues generally do not apply to the following debt instruments. How to amend your taxes U. How to amend your taxes S. How to amend your taxes savings bonds. How to amend your taxes Tax-exempt obligations. How to amend your taxes (However, see Tax-Exempt Bonds and Coupons, later. How to amend your taxes ) Obligations issued by individuals before March 2, 1984. How to amend your taxes Loans of $10,000 or less between individuals who are not in the business of lending money. How to amend your taxes (The dollar limit includes outstanding prior loans by the lender to the borrower. How to amend your taxes ) This exception does not apply if a principal purpose of the loan is to avoid any federal tax. How to amend your taxes   See chapter 1 of Publication 550 for information about the rules for these and other types of discounted debt instruments, such as short-term and market discount obligations. How to amend your taxes Publication 550 also discusses rules for holders of REMIC interests and CDOs. How to amend your taxes De minimis rule. How to amend your taxes   You can treat OID as zero if the total OID on a debt instrument is less than one-fourth of 1% (. How to amend your taxes 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. How to amend your taxes Debt instruments with de minimis OID are not listed in this publication. How to amend your taxes There are special rules to determine the de minimis amount in the case of debt instruments that provide for more than one payment of principal. How to amend your taxes Also, the de minimis rules generally do not apply to tax-exempt obligations. How to amend your taxes Example 2. How to amend your taxes You bought at issuance a 10-year debt instrument with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. How to amend your taxes One-fourth of 1% of $1,000 (the stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. How to amend your taxes Under the de minimis rule, you can treat the OID as zero because the $20 discount is less than $25. How to amend your taxes Example 3. How to amend your taxes Assume the same facts as Example 2, except the debt instrument was issued at $950. How to amend your taxes You must report part of the $50 OID each year because it is more than $25. How to amend your taxes Choice to report all interest as OID. How to amend your taxes   Generally, you can choose to treat all interest on a debt instrument acquired after April 3, 1994, as OID and include it in gross income by using the constant yield method. How to amend your taxes See Constant yield method under Debt Instruments Issued After 1984, later, for more information. How to amend your taxes   For this choice, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. How to amend your taxes For more information, see Regulations section 1. How to amend your taxes 1272-3. How to amend your taxes Purchase after date of original issue. How to amend your taxes   A debt instrument you purchased after the date of original issue may have premium, acquisition premium, or market discount. How to amend your taxes If so, the OID reported to you on Form 1099-OID may have to be adjusted. How to amend your taxes For more information, see Showing an OID adjustment under How To Report OID, later. How to amend your taxes The following rules generally do not apply to contingent payment debt instruments. How to amend your taxes Adjustment for premium. How to amend your taxes   If your debt instrument (other than an inflation-indexed debt instrument) has premium, do not report any OID as ordinary income. How to amend your taxes Your adjustment is the total OID shown on your Form 1099-OID. How to amend your taxes Adjustment for acquisition premium. How to amend your taxes   If your debt instrument has acquisition premium, reduce the OID you report. How to amend your taxes Your adjustment is the difference between the OID shown on your Form 1099-OID and the reduced OID amount figured using the rules explained later under Figuring OID on Long-Term Debt Instruments. How to amend your taxes Adjustment for market discount. How to amend your taxes   If your debt instrument has market discount that you choose to include in income currently, increase the OID you report. How to amend your taxes Your adjustment is the accrued market discount for the year. How to amend your taxes See Market Discount Bonds in chapter 1 of Publication 550 for information on how to figure accrued market discount and include it in your income currently and for other information about market discount bonds. How to amend your taxes If you choose to use the constant yield method to figure accrued market discount, also see Figuring OID on Long-Term Debt Instruments, later. How to amend your taxes The constant yield method of figuring accrued OID, explained in those discussions under Constant yield method, is also used to figure accrued market discount. How to amend your taxes For more information concerning premium or market discount on an inflation-indexed debt instrument, see Regulations section 1. How to amend your taxes 1275-7. How to amend your taxes Sale, exchange, or redemption. How to amend your taxes   Generally, you treat your gain or loss from the sale, exchange, or redemption of a discounted debt instrument as a capital gain or loss if you held the debt instrument as a capital asset. How to amend your taxes If you sold the debt instrument through a broker, you should receive Form 1099-B or an equivalent statement from the broker. How to amend your taxes Use the Form 1099-B or other statement and your brokerage statements to complete Form 8949, and Schedule D (Form 1040). How to amend your taxes   Your gain or loss is the difference between the amount you realized on the sale, exchange, or redemption and your basis in the debt instrument. How to amend your taxes Your basis, generally, is your cost increased by the OID you have included in income each year you held it. How to amend your taxes In general, to determine your gain or loss on a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to amend your taxes   See chapter 4 of Publication 550 for more information about the tax treatment of the sale or redemption of discounted debt instruments. How to amend your taxes Example 4. How to amend your taxes Larry, a calendar year taxpayer, bought a corporate debt instrument at original issue for $86,235. How to amend your taxes 00 on November 1 of Year 1. How to amend your taxes The 15-year debt instrument matures on October 31 of Year 16 at a stated redemption price of $100,000. How to amend your taxes The debt instrument provides for semiannual payments of interest at 10%. How to amend your taxes Assume the debt instrument is a capital asset in Larry's hands. How to amend your taxes The debt instrument has $13,765. How to amend your taxes 00 of OID ($100,000 stated redemption price at maturity minus $86,235. How to amend your taxes 00 issue price). How to amend your taxes Larry sold the debt instrument for $90,000 on November 1 of Year 4. How to amend your taxes Including the OID he will report for the period he held the debt instrument in Year 4, Larry has included $4,556. How to amend your taxes 00 of OID in income and has increased his basis by that amount to $90,791. How to amend your taxes 00. How to amend your taxes Larry has realized a loss of $791. How to amend your taxes 00. How to amend your taxes All of Larry's loss is capital loss. How to amend your taxes Form 1099-OID The issuer of the debt instrument (or your broker, if you purchased or held the debt instrument through a broker) should give you a copy of Form 1099-OID or a similar statement if the accrued OID for the calendar year is $10 or more and the term of the debt instrument is more than 1 year. How to amend your taxes Form 1099-OID shows all OID income in box 1 except OID on a U. How to amend your taxes S. How to amend your taxes Treasury obligation, which is shown in box 8. How to amend your taxes It also shows, in box 2, any qualified stated interest you must include in income. How to amend your taxes (However, any qualified stated interest on Treasury inflation-protected securities can be reported on Form 1099-INT in box 3. How to amend your taxes ) A copy of Form 1099-OID will be sent to the IRS. How to amend your taxes Do not attach your copy to your tax return. How to amend your taxes Keep it for your records. How to amend your taxes If you are required to file a tax return and you receive Form 1099-OID showing taxable amounts, you must report these amounts on your return. How to amend your taxes A 20% accuracy-related penalty may be charged for underpayment of tax due to either negligence or disregard of rules and regulations or substantial understatement of tax. How to amend your taxes Form 1099-OID not received. How to amend your taxes   If you held an OID debt instrument for a calendar year but did not receive a Form 1099-OID, refer to the discussions under Figuring OID on Long-Term Debt Instruments, later, for information on the OID you must report. How to amend your taxes Refiguring OID. How to amend your taxes   You must refigure the OID shown on Form 1099-OID, in box 1 or box 8, to determine the proper amount to include in income if one of the following applies. How to amend your taxes You bought the debt instrument at a premium or at an acquisition premium. How to amend your taxes The debt instrument is a stripped bond or coupon (including zero coupon bonds backed by U. How to amend your taxes S. How to amend your taxes Treasury securities). How to amend your taxes The debt instrument is a contingent payment or inflation-indexed debt instrument. How to amend your taxes See the discussions under Figuring OID on Long-Term Debt Instruments or Figuring OID on Stripped Bonds and Coupons, later, for the specific computations. How to amend your taxes Refiguring interest. How to amend your taxes   If you disposed of a debt instrument or acquired it from another holder between interest dates, see the discussion under Bonds Sold Between Interest Dates in chapter 1 of Publication 550 for information about refiguring the interest shown on Form 1099-OID in box 2. How to amend your taxes Nominee. How to amend your taxes   If you are the holder of an OID debt instrument and you receive a Form 1099-OID that shows your taxpayer identification number and includes amounts belonging to another person, you are considered a “nominee. How to amend your taxes ” You must file another Form 1099-OID for each actual owner, showing the OID for the owner. How to amend your taxes Show the owner of the debt instrument as the “recipient” and you as the “payer. How to amend your taxes ”   Complete Form 1099-OID and Form 1096 and file the forms with the Internal Revenue Service Center for your area. How to amend your taxes You must also give a copy of the Form 1099-OID to the actual owner. How to amend your taxes However, you are not required to file a nominee return to show amounts belonging to your spouse. How to amend your taxes See the Form 1099 instructions for more information. How to amend your taxes   When preparing your tax return, follow the instructions under Showing an OID adjustment in the next discussion. How to amend your taxes How To Report OID Generally, you report your taxable interest and OID income on the interest line of Form 1040EZ, Form 1040A, or Form 1040. How to amend your taxes Form 1040 or Form 1040A required. How to amend your taxes   You must use Form 1040 or Form 1040A (you cannot use Form 1040EZ) under either of the following conditions. How to amend your taxes You received a Form 1099-OID as a nominee for the actual owner. How to amend your taxes Your total interest and OID income for the year was more than $1,500. How to amend your taxes Form 1040 required. How to amend your taxes   You must use Form 1040 (you cannot use Form 1040A or Form 1040EZ) if you are reporting more or less OID than the amount shown on Form 1099-OID, other than because you are a nominee. How to amend your taxes For example, if you paid a premium or an acquisition premium when you purchased the debt instrument, you must use Form 1040 because you will report less OID than shown on Form 1099-OID. How to amend your taxes Also, you must use Form 1040 if you were charged an early withdrawal penalty. How to amend your taxes Where to report. How to amend your taxes   List each payer's name (if a brokerage firm gave you a Form 1099, list the brokerage firm as the payer) and the amount received from each payer on Form 1040A, Schedule B, Part I, line 1, or Form 1040, Schedule B, line 1. How to amend your taxes Include all OID and periodic interest shown on any Form 1099-OID, boxes 1, 2, and 8, you received for the tax year. How to amend your taxes Also include any other OID and interest income for which you did not receive a Form 1099. How to amend your taxes Showing an OID adjustment. How to amend your taxes   If you use Form 1040 to report more or less OID than shown on Form 1099-OID, list the full OID on Schedule B, Part I, line 1, and follow the instructions under 1 or 2, next. How to amend your taxes   If you use Form 1040A to report the OID shown on a Form 1099-OID you received as a nominee for the actual owner, list the full OID on Schedule B, Part I, line 1 and follow the instructions under 1. How to amend your taxes If the OID, as adjusted, is less than the amount shown on Form 1099-OID, show the adjustment as follows. How to amend your taxes Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to amend your taxes Below the subtotal, write “Nominee Distribution” or “OID Adjustment” and show the OID you are not required to report. How to amend your taxes Subtract that OID from the subtotal and enter the result on line 2. How to amend your taxes If the OID, as adjusted, is more than the amount shown on Form 1099-OID, show the adjustment as follows. How to amend your taxes Under your last entry on line 1, subtotal all interest and OID income listed on line 1. How to amend your taxes Below the subtotal, write “OID Adjustment” and show the additional OID. How to amend your taxes Add that OID to the subtotal and enter the result on line 2. How to amend your taxes Figuring OID on Long-Term Debt Instruments How you figure the OID on a long-term debt instrument depends on the date it was issued. How to amend your taxes It also may depend on the type of the debt instrument. How to amend your taxes There are different rules for each of the following debt instruments. How to amend your taxes Corporate debt instruments issued after 1954 and before May 28, 1969, and government debt instruments issued after 1954 and before July 2, 1982. How to amend your taxes Corporate debt instruments issued after May 27, 1969, and before July 2, 1982. How to amend your taxes Debt instruments issued after July 1, 1982, and before 1985. How to amend your taxes Debt instruments issued after 1984 (other than debt instruments described in (5) and (6)). How to amend your taxes Contingent payment debt instruments issued after August 12, 1996. How to amend your taxes Inflation-indexed debt instruments (including Treasury inflation-protected securities) issued after January 5, 1997. How to amend your taxes Zero coupon bonds. How to amend your taxes   The rules for figuring OID on zero coupon bonds backed by U. How to amend your taxes S. How to amend your taxes Treasury securities are discussed under Figuring OID on Stripped Bonds and Coupons, later. How to amend your taxes Corporate Debt Instruments Issued After 1954 and Before May 28, 1969, and Government Debt Instruments Issued After 1954 and Before July 2, 1982 If you hold these debt instruments as capital assets, you include OID in income only in the year the debt instrument is sold, exchanged, or redeemed, and only if you have a gain. How to amend your taxes The OID, which is taxed as ordinary income, generally equals the following amount. How to amend your taxes   number of full months you held the debt instrument  number of full months from date of original issue to date of maturity X original issue discount The balance of the gain is capital gain. How to amend your taxes If there is a loss on the sale of the debt instrument, the entire loss is a capital loss and no OID is reported. How to amend your taxes Corporate Debt Instruments Issued After May 27, 1969, and Before July 2, 1982 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments. How to amend your taxes For information about showing the correct OID on your tax return, see the discussion under How To Report OID, earlier. How to amend your taxes Your basis in the debt instrument is increased by the OID you include in income. How to amend your taxes Form 1099-OID. How to amend your taxes   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to amend your taxes However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend your taxes See Reduction for acquisition premium, later. How to amend your taxes If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to amend your taxes irs. How to amend your taxes gov/pub1212 by clicking the link under Recent Developments. How to amend your taxes Form 1099-OID not received. How to amend your taxes    The OID listed is for each $1,000 of redemption price. How to amend your taxes You must adjust the listed amount if your debt instrument has a different principal amount. How to amend your taxes For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend your taxes   If you held the debt instrument the entire year, use the OID shown in Section I-A for a calendar year. How to amend your taxes (If your debt instrument is not listed in Section I-A, consult the issuer for information about the issue price and the OID that accrued for that year. How to amend your taxes ) If you did not hold the debt instrument the entire year, figure your OID using the following method. How to amend your taxes Divide the OID shown by 12. How to amend your taxes Multiply the result in (1) by the number of complete and partial months (for example, 6½ months) you held the debt instrument during a calendar year. How to amend your taxes This is the OID to include in income unless you paid an acquisition premium. How to amend your taxes The reduction for acquisition premium is discussed next. How to amend your taxes Reduction for acquisition premium. How to amend your taxes   If you bought the debt instrument at an acquisition premium, figure the OID to include in income as follows. How to amend your taxes Divide the total OID on the debt instrument by the number of complete months, and any part of a month, from the date of original issue to the maturity date. How to amend your taxes This is the monthly OID. How to amend your taxes Subtract from your cost the issue price and the accumulated OID from the date of issue to the date of purchase. How to amend your taxes (If the result is zero or less, stop here. How to amend your taxes You did not pay an acquisition premium. How to amend your taxes ) Divide the amount figured in (2) by the number of complete months, and any part of a month, from the date of your purchase to the maturity date. How to amend your taxes Subtract the amount figured in (3) from the amount figured in (1). How to amend your taxes This is the OID to include in income for each month you hold the debt instrument during the year. How to amend your taxes Transfers during the month. How to amend your taxes   If you buy or sell a debt instrument on any day other than the same day of the month as the date of original issue, the ratable monthly portion of OID for the month of sale is divided between the seller and the buyer according to the number of days each held the debt instrument. How to amend your taxes Your holding period for this purpose begins the day you acquire the debt instrument and ends the day before you dispose of it. How to amend your taxes Debt Instruments Issued After July 1, 1982, and Before 1985 If you hold these debt instruments as capital assets, you must include part of the OID in income each year you own the debt instruments and increase your basis by the amount included. How to amend your taxes For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to amend your taxes Form 1099-OID. How to amend your taxes   You should receive a Form 1099-OID showing OID for the part of the year you held the debt instrument. How to amend your taxes However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend your taxes See Constant yield method and the discussions on acquisition premium that follow, later. How to amend your taxes If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-A available at www. How to amend your taxes irs. How to amend your taxes gov/pub1212 by clicking the link under Recent Developments. How to amend your taxes Form 1099-OID not received. How to amend your taxes    The OID listed is for each $1,000 of redemption price. How to amend your taxes You must adjust the listed amount if your debt instrument has a different principal amount. How to amend your taxes For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend your taxes   If you held the debt instrument the entire year, use the OID shown in Section I-A. How to amend your taxes (If your instrument is not listed in Section I-A, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to amend your taxes ) If you did not hold the debt instrument the entire year, figure your OID using either of the following methods. How to amend your taxes Method 1. How to amend your taxes    Divide the total OID for a calendar year by 365 (366 for leap years). How to amend your taxes Multiply the result in (1) by the number of days you held the debt instrument during that particular year. How to amend your taxes  This computation is an approximation and may result in a slightly higher OID than Method 2. How to amend your taxes Method 2. How to amend your taxes    Look up the daily OID for the first accrual period you held the debt instrument during a calendar year. How to amend your taxes (See Accrual period under Constant yield method, next. How to amend your taxes ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to amend your taxes If you held the debt instrument for part of both accrual periods, repeat (1) and (2) for the second accrual period. How to amend your taxes Add the results of (2) and (3). How to amend your taxes This is the OID to include in income, unless you paid an acquisition premium. How to amend your taxes (The reduction for acquisition premium is discussed later. How to amend your taxes ) Constant yield method. How to amend your taxes   This discussion shows how to figure OID on debt instruments issued after July 1, 1982, and before 1985, using a constant yield method. How to amend your taxes OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to amend your taxes   Figure the OID allocable to any accrual period as follows. How to amend your taxes Multiply the adjusted issue price at the beginning of the accrual period by the debt instrument's yield to maturity. How to amend your taxes Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to amend your taxes Accrual period. How to amend your taxes   An accrual period for any OID debt instrument issued after July 1, 1982, and before 1985 is each 1-year period beginning on the date of the issue of the obligation and each anniversary thereafter, or the shorter period to maturity for the last accrual period. How to amend your taxes Your tax year will usually include parts of two accrual periods. How to amend your taxes Daily OID. How to amend your taxes   The OID for any accrual period is allocated equally to each day in the accrual period. How to amend your taxes You must include in income the sum of the OID amounts for each day you hold the debt instrument during the year. How to amend your taxes If your tax year includes parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period. How to amend your taxes Figuring daily OID. How to amend your taxes   The daily OID for the initial accrual period is figured using the following formula. How to amend your taxes   (ip × ytm) − qsi     p   ip = issue price ytm = yield to maturity qsi = qualified stated interest p = number of days in accrual period         The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to amend your taxes Reduction for acquisition premium on debt instruments purchased before July 19, 1984. How to amend your taxes   If you bought the debt instrument at an acquisition premium before July 19, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend your taxes Figure the daily acquisition premium by dividing the total acquisition premium by the number of days in the period beginning on your purchase date and ending on the day before the date of maturity. How to amend your taxes Reduction for acquisition premium on debt instruments purchased after July 18, 1984. How to amend your taxes   If you bought the debt instrument at an acquisition premium after July 18, 1984, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend your taxes However, the method of figuring the daily acquisition premium is different from the method described in the preceding discussion. How to amend your taxes To figure the daily acquisition premium under this method, multiply the daily OID by the following fraction. How to amend your taxes The numerator is the acquisition premium. How to amend your taxes The denominator is the total OID remaining for the debt instrument after your purchase date. How to amend your taxes Section I-A is available at www. How to amend your taxes irs. How to amend your taxes gov/pub1212 and clicking the link under Recent Developments. How to amend your taxes Using Section I-A to figure accumulated OID. How to amend your taxes   If you bought your corporate debt instrument in a calendar year or the subsequent year, you can figure the accumulated OID to the date of purchase by adding the following amounts. How to amend your taxes The amount from the “Total OID to January 1, YYYY” column for your debt instrument. How to amend your taxes The OID from January 1 of a calendar year to the date of purchase, figured as follows. How to amend your taxes Multiply the daily OID for the first accrual period in the calendar year by the number of days from January 1 to the date of purchase, or the end of the accrual period if the debt instrument was purchased in the second or third accrual period. How to amend your taxes Multiply the daily OID for each subsequent accrual period by the number of days in the period to the date of purchase or the end of the accrual period, whichever applies. How to amend your taxes Add the amounts figured in (2a) and (2b). How to amend your taxes Debt Instruments Issued After 1984 If you hold debt instruments issued after 1984, you must report part of the OID in gross income each year that you own the debt instruments. How to amend your taxes You must include the OID in gross income whether or not you hold the debt instrument as a capital asset. How to amend your taxes Your basis in the debt instrument is increased by the OID you include in income. How to amend your taxes For information about showing the correct OID on your tax return, see How To Report OID, earlier. How to amend your taxes Form 1099-OID. How to amend your taxes   You should receive a Form 1099-OID showing OID for the part of a calendar year you held the debt instrument. How to amend your taxes However, if you paid an acquisition premium, you may need to refigure the OID to report on your tax return. How to amend your taxes See Constant yield method and Reduction for acquisition premium, later. How to amend your taxes   You may also need to refigure the OID for a contingent payment or inflation-indexed debt instrument on which the amount reported on Form 1099-OID is inaccurate. How to amend your taxes See Contingent Payment Debt Instruments or Inflation-Indexed Debt Instruments, later. How to amend your taxes If you held an OID debt instrument in a calendar year but did not receive a Form 1099-OID, see Form 1099-OID not received, immediately below, and refer to Section I-B available at www. How to amend your taxes irs. How to amend your taxes gov/pub1212 by clicking the link under Recent Developments. How to amend your taxes Form 1099-OID not received. How to amend your taxes   The OID listed is for each $1,000 of redemption price. How to amend your taxes You must adjust the listed amount if your debt instrument has a different principal amount. How to amend your taxes For example, if you have a debt instrument with a $500 principal amount, use one-half the listed amount to figure your OID. How to amend your taxes   Use the OID shown in Section I-B for a calendar year if you held the debt instrument the entire year. How to amend your taxes (If your debt instrument is not listed in Section I-B, consult the issuer for information about the issue price, the yield to maturity, and the OID that accrued for that year. How to amend your taxes ) If you did not hold the debt instrument the entire year, figure your OID as follows. How to amend your taxes Look up the daily OID for the first accrual period in which you held the debt instrument during a calendar year. How to amend your taxes (See Accrual period under Constant yield method, later. How to amend your taxes ) Multiply the daily OID by the number of days you held the debt instrument during that accrual period. How to amend your taxes Repeat (1) and (2) for any remaining accrual periods in which you held the debt instrument. How to amend your taxes Add the results of (2) and (3). How to amend your taxes This is the OID to include in income for that year, unless you paid an acquisition premium. How to amend your taxes (The reduction for acquisition premium is discussed later. How to amend your taxes ) Tax-exempt bond. How to amend your taxes   If you own a tax-exempt bond, figure your basis in the bond by adding to your cost the OID you would have included in income if the bond had been taxable. How to amend your taxes You need to make this adjustment to determine if you have a gain or loss on a later disposition of the bond. How to amend your taxes In general, use the rules that follow to determine your OID. How to amend your taxes Constant yield method. How to amend your taxes   This discussion shows how to figure OID on debt instruments issued after 1984 using a constant yield method. How to amend your taxes (The special rules that apply to contingent payment debt instruments and inflation-indexed debt instruments are explained later. How to amend your taxes ) OID is allocated over the life of the debt instrument through adjustments to the issue price for each accrual period. How to amend your taxes   Figure the OID allocable to any accrual period as follows. How to amend your taxes Multiply the adjusted issue price at the beginning of the accrual period by a fraction. How to amend your taxes The numerator of the fraction is the debt instrument's yield to maturity and the denominator is the number of accrual periods per year. How to amend your taxes The yield must be stated appropriately taking into account the length of the particular accrual period. How to amend your taxes Subtract from the result in (1) any qualified stated interest allocable to the accrual period. How to amend your taxes Accrual period. How to amend your taxes   For debt instruments issued after 1984 and before April 4, 1994, an accrual period is each 6-month period that ends on the day that corresponds to the stated maturity date of the debt instrument or the date 6 months before that date. How to amend your taxes For example, a debt instrument maturing on March 31 has accrual periods that end on September 30 and March 31 of each calendar year. How to amend your taxes Any short period is included as the first accrual period. How to amend your taxes   For debt instruments issued after April 3, 1994, accrual periods may be of any length and may vary in length over the term of the debt instrument, as long as each accrual period is no longer than 1 year and all payments are made on the first or last day of an accrual period. How to amend your taxes However, the OID listed for these debt instruments in Section I-B has been figured using 6-month accrual periods. How to amend your taxes Daily OID. How to amend your taxes   The OID for any accrual period is allocated equally to each day in the accrual period. How to amend your taxes Figure the amount to include in income by adding the OID for each day you hold the debt instrument during the year. How to amend your taxes Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID for each accrual period. How to amend your taxes If your debt instrument has 6-month accrual periods, your tax year will usually include one full 6-month accrual period and parts of two other 6-month periods. How to amend your taxes Figuring daily OID. How to amend your taxes   The daily OID for the initial accrual period is figured using the following formula. How to amend your taxes   (ip × ytm/n) − qsi     p   ip = issue price ytm = yield to maturity n = number of accrual periods in 1 year qsi = qualified stated interest p = number of days in accrual period       The daily OID for subsequent accrual periods is figured the same way except the adjusted issue price at the beginning of each period is used in the formula instead of the issue price. How to amend your taxes Example 5. How to amend your taxes On January 1 of Year 1, you bought a 15-year, 10% debt instrument of A Corporation at original issue for $86,235. How to amend your taxes 17. How to amend your taxes According to the prospectus, the debt instrument matures on December 31 of Year 15 at a stated redemption price of $100,000. How to amend your taxes The yield to maturity is 12%, compounded semiannually. How to amend your taxes The debt instrument provides for qualified stated interest payments of $5,000 on June 30 and December 31 of each calendar year. How to amend your taxes The accrual periods are the 6-month periods ending on each of these dates. How to amend your taxes The number of days for the first accrual period (January 1 through June 30) is 181 days (182 for leap years). How to amend your taxes The daily OID for the first accrual period is figured as follows. How to amend your taxes   ($86,235. How to amend your taxes 17 x . How to amend your taxes 12/2) – $5,000     181 days     = $174. How to amend your taxes 11020 = $. How to amend your taxes 96193   181           The adjusted issue price at the beginning of the second accrual period is the issue price plus the OID previously includible in income ($86,235. How to amend your taxes 17 + $174. How to amend your taxes 11), or $86,409. How to amend your taxes 28. How to amend your taxes The number of days for the second accrual period (July 1 through December 31) is 184 days. How to amend your taxes The daily OID for the second accrual period is figured as follows. How to amend your taxes   ($86,409. How to amend your taxes 28 x . How to amend your taxes 12/2) – $5,000     184 days     = $184. How to amend your taxes 55681 = $1. How to amend your taxes 00303   184 Since the first and second accrual periods coincide exactly with your tax year, you include in income for Year 1 the OID allocable to the first two accrual periods, $174. How to amend your taxes 11 ($. How to amend your taxes 95665 × 182 days) plus $184. How to amend your taxes 56 ($1. How to amend your taxes 00303 × 184 days), or $358. How to amend your taxes 67. How to amend your taxes Add the OID to the $10,000 interest you report on your income tax return for Year 1. How to amend your taxes Example 6. How to amend your taxes Assume the same facts as in Example 5, except that you bought the debt instrument at original issue on May 1 of Year 1, with a maturity date of April 30, Year 16. How to amend your taxes Also, the interest payment dates are October 31 and April 30 of each calendar year. How to amend your taxes The accrual periods are the 6-month periods ending on each of these dates. How to amend your taxes The number of days for the first accrual period (May 1 through October 31) is 184 days. How to amend your taxes The daily OID for the first accrual period is figured as follows. How to amend your taxes   ($86,235. How to amend your taxes 17 x . How to amend your taxes 12/2) – $5,000     184 days     = $174. How to amend your taxes 11020 = $. How to amend your taxes 94625   184           The number of days for the second accrual period (November 1 through April 30) is 181 days (182 for leap years). How to amend your taxes The daily OID for the second accrual period is figured as follows. How to amend your taxes   ($86,409. How to amend your taxes 28 x . How to amend your taxes 12/2) – $5,000     181 days     = $184. How to amend your taxes 55681 = $1. How to amend your taxes 01965   181 If you hold the debt instrument through the end of Year 1, you must include $236. How to amend your taxes 31 of OID in income. How to amend your taxes This is $174. How to amend your taxes 11 ($. How to amend your taxes 94625 × 184 days) for the period May 1 through October 31 plus $62. How to amend your taxes 20 ($1. How to amend your taxes 01965 × 61 days) for the period November 1 through December 31. How to amend your taxes The OID is added to the $5,000 interest income paid on October 31 of Year 1. How to amend your taxes Your basis in the debt instrument is increased by the OID you include in income. How to amend your taxes On January 1 of Year 2, your basis in the A Corporation debt instrument is $86,471. How to amend your taxes 48 ($86,235. How to amend your taxes 17 + $236. How to amend your taxes 31). How to amend your taxes Short first accrual period. How to amend your taxes   You may have to make adjustments if a debt instrument has a short first accrual period. How to amend your taxes For example, a debt instrument with 6-month accrual periods that is issued on February 15 and matures on October 31 has a short first accrual period that ends April 30. How to amend your taxes (The remaining accrual periods begin on May 1 and November 1. How to amend your taxes ) For this short period, figure the daily OID as described earlier, but adjust the yield for the length of the short accrual period. How to amend your taxes You may use any reasonable compounding method in determining OID for a short period. How to amend your taxes Examples of reasonable compounding methods include continuous compounding and monthly compounding (that is, simple interest within a month). How to amend your taxes Consult your tax advisor for more information about making this computation. How to amend your taxes   The OID for the final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period. How to amend your taxes Reduction for acquisition premium. How to amend your taxes   If you bought the debt instrument at an acquisition premium, figure the OID includible in income by reducing the daily OID by the daily acquisition premium. How to amend your taxes To figure the daily acquisition premium, multiply the daily OID by the following fraction. How to amend your taxes The numerator is the acquisition premium. How to amend your taxes The denominator is the total OID remaining for the debt instrument after your purchase date. How to amend your taxes Example 7. How to amend your taxes Assume the same facts as in Example 6, except that you bought the debt instrument on November 1 of Year 1 for $87,000, after its original issue on May 1 of Year 1. How to amend your taxes The adjusted issue price on November 1 of Year 1 is $86,409. How to amend your taxes 28 ($86,235. How to amend your taxes 17 + $174. How to amend your taxes 11). How to amend your taxes In this case, you paid an acquisition premium of $590. How to amend your taxes 72 ($87,000 − $86,409. How to amend your taxes 28). How to amend your taxes The daily OID for the accrual period November 1 through April 30, reduced for the acquisition premium, is figured as follows. How to amend your taxes 1) Daily OID on date of purchase (2nd accrual period) $1. How to amend your taxes 01965*  2)  Acquisition premium $590. How to amend your taxes 72    3)  Total OID remaining after purchase date ($13,764. How to amend your taxes 83 − $174. How to amend your taxes 11) 13,590. How to amend your taxes 72   4) Line 2 ÷ line 3 . How to amend your taxes 04346  5)  Line 1 × line 4 . How to amend your taxes 04432  6)  Daily OID reduced for the acquisition premium. How to amend your taxes Line 1 − line 5 $0. How to amend your taxes 97533  * As shown in Example 6. How to amend your taxes The total OID to include in income for Year 1 is $59. How to amend your taxes 50 ($. How to amend your taxes 97533 × 61 days). How to amend your taxes Contingent Payment Debt Instruments This discussion shows how to figure OID on a contingent payment debt instrument issued after August 12, 1996, that was issued for cash or publicly traded property. How to amend your taxes In general, a contingent payment debt instrument provides for one or more payments that are contingent as to timing or amount. How to amend your taxes If you hold a contingent payment bond, you must report OID as it accrues each year. How to amend your taxes Because the actual payments on a contingent payment debt instrument cannot be known in advance, issuers and holders cannot use the constant yield method (discussed earlier under Debt Instruments Issued After 1984) without making certain assumptions about the payments on the debt instrument. How to amend your taxes To figure OID accruals on contingent payment debt instruments, holders and issuers must use the noncontingent bond method. How to amend your taxes Noncontingent bond method. How to amend your taxes    Under this method, the issuer must compute a comparable yield for the debt instrument and, based on this yield, construct a projected payment schedule for the instrument, which includes a projected fixed amount for each contingent payment. How to amend your taxes In general, holders and issuers accrue OID on this projected payment schedule using the constant yield method that applies to fixed payment debt instruments. How to amend your taxes When a contingent payment differs from the projected fixed amount, the holders and issuers make adjustments to their OID accruals. How to amend your taxes If the actual contingent payment is larger than expected, both the issuer and the holder increase their OID accruals. How to amend your taxes If the actual contingent payment is smaller than expected, holders and issuers generally decrease their OID accruals. How to amend your taxes Form 1099-OID. How to amend your taxes   The amount shown on Form 1099-OID in box 1 you receive for a contingent payment debt instrument may not be the correct amount to include in income. How to amend your taxes For example, the amount may not be correct if the contingent payment was different from the projected amount. How to amend your taxes If the amount in box 1 is not correct, you must figure the OID to report on your return under the following rules. How to amend your taxes For information on showing an OID adjustment on your tax return, see How To Report OID, earlier. How to amend your taxes Figuring OID. How to amend your taxes   To figure OID on a contingent payment debt instrument, you need to know the “comparable yield” and “projected payment schedule” of the debt instrument. How to amend your taxes The issuer must make these available to you. How to amend your taxes Comparable yield. How to amend your taxes   The comparable yield generally is the yield at which the issuer would issue a fixed rate debt instrument with terms and conditions similar to those of the contingent payment debt instrument. How to amend your taxes The comparable yield is determined as of the debt instrument's issue date. How to amend your taxes Projected payment schedule. How to amend your taxes   The projected payment schedule for a contingent payment debt instrument includes all fixed payments due under the instrument and a projected fixed amount for each contingent payment. How to amend your taxes The projected payment schedule is created by the issuer as of the debt instrument's issue date. How to amend your taxes It is used to determine the issuer's and holder's interest accruals and adjustments. How to amend your taxes Steps for figuring OID. How to amend your taxes   Figure the OID on a contingent payment debt instrument in two steps. How to amend your taxes Figure the OID using the constant yield method (discussed earlier under Debt Instruments Issued After 1984 ) that applies to fixed payment debt instruments. How to amend your taxes Use the comparable yield as the yield to maturity. How to amend your taxes In general, use the projected payment schedule to determine the instrument's adjusted issue price at the beginning of each accrual period (other than the initial period). How to amend your taxes Do not treat any amount payable as qualified stated interest. How to amend your taxes Adjust the OID in (1) to account for actual contingent payments. How to amend your taxes If the contingent payment is greater than the projected fixed amount, you have a positive adjustment. How to amend your taxes If the contingent payment is less than the projected fixed amount, you have a negative adjustment. How to amend your taxes Net positive adjustment. How to amend your taxes   A net positive adjustment exists for a tax year when the total of any positive adjustments described in (2) above for the tax year is more than the total of any negative adjustments for the tax year. How to amend your taxes Treat a net positive adjustment as additional OID for the tax year. How to amend your taxes Net negative adjustment. How to amend your taxes   A net negative adjustment exists for a tax year when the total of any negative adjustments described in (2) above for the tax year is more than the total of any positive adjustments for the tax year. How to amend your taxes Use a net negative adjustment to offset OID on the debt instrument for the tax year. How to amend your taxes If the net negative adjustment is more than the OID on the debt instrument for the tax year, you can claim the difference as an ordinary loss. How to amend your taxes However, the amount you can claim as an ordinary loss is limited to the OID on the debt instrument you included in income in prior tax years. How to amend your taxes You must carry forward any net negative adjustment that is more than the total OID for the tax year and prior tax years and treat it as a negative adjustment in the next tax year. How to amend your taxes Basis adjustments. How to amend your taxes   In general, increase your basis in a contingent payment debt instrument by the OID included in income. How to amend your taxes Your basis, however, is not affected by any negative or positive adjustments. How to amend your taxes Decrease your basis by any noncontingent payment received and the projected contingent payment scheduled to be received. How to amend your taxes Treatment of gain or loss on sale or exchange. How to amend your taxes   If you sell a contingent payment debt instrument at a gain, your gain is ordinary income (interest income), even if you hold the debt instrument as a capital asset. How to amend your taxes If you sell a contingent payment debt instrument at a loss, your loss is an ordinary loss to the extent of your prior OID accruals on the debt instrument. How to amend your taxes If the debt instrument is a capital asset, treat any loss that is more than your prior OID accruals as a capital loss. How to amend your taxes See Regulations section 1. How to amend your taxes 1275-4 for exceptions to these rules. How to amend your taxes Premium, acquisition premium, and market discount. How to amend your taxes   The rules for accruing premium, acquisition premium, and market discount do not apply to a contingent payment debt instrument. How to amend your taxes See Regulations section 1. How to amend your taxes 1275-4 to determine how to account for these items. How to amend your taxes Inflation-Indexed Debt Instruments This discussion shows how you figure OID on certain inflation-indexed debt instruments issued after January 5, 1997. How to amend your taxes An inflation-indexed debt instrument is generally a debt instrument on which the payments are adjusted for inflation and d
Español

Medical advances have resulted in an increased need for nursing home care and assisted living. Most health insurance plans and Medicare severely limit or exclude long-term care. You should consider these costs as you plan for retirement. Here are some questions to ask when considering a separate long-term care insurance policy.

  • What qualifies you for benefits? Some insurers say you must be unable to perform a specific number of the following activities of daily living: eating, walking, getting from bed to a chair, dressing, bathing, using a toilet and remaining continent.
  • What type of care is covered? Does the policy cover nursing home care? What about coverage for assisted living facilities that provide less client care than a nursing home? If you want to stay in your home, will it pay for care provided by visiting nurses and therapists? What about help with food preparation and housecleaning?
  • What will the benefit amount be? Most plans are written to provide a specific dollar benefit per day. The benefit for home care is usually about half the nursing-home benefit. But some policies pay the same for both forms of care. Other plans pay only for your actual expenses.
  • What is the benefit period? It is possible to get a policy with lifetime benefits but this can be very expensive. Other options for coverage are from one to six years. The average nursing home stay is about 2.5 years.
  • Is the benefit adjusted for inflation? If you buy a policy prior to age 60, you face the risk that a fixed daily benefit will not be enough by the time you need it.
  • Is there a waiting period before benefits begin? A 20 to 100 day period is not unusual.

Other Insurance

  • Travel Insurance. There are four kinds of travel insurance: Travel Cancellation Insurance, Baggage or Personal Effects Coverage, Emergency Medical Coverage and Accidental Death. One helpful website is insuremytrip.com.
  • Identity Theft Insurance. This type of insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. Some companies now include this as part of their homeowner's insurance policy. Others sell it as a stand-alone policy. Ask your homeowner policy company for information.
  • International Healthcare Insurance. A policy that provides health coverage no matter where you are in the world. The policy term is flexible so you can purchase only for the time you will be out of the country. Contact your current healthcare provider for coverage information.
  • Catastrophic Health Care Insurance. A health plan that only cover certain types of expensive care, like hospitalizations.
  • Liability Insurance. Insurance for what the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person. Search online or ask your personal insurance agent for more information.
  • Umbrella insurance A policy that supplements the insurance you already have for home, auto, and other personal property. can help cover costs that exceed the limits of other policies.

The How To Amend Your Taxes

How to amend your taxes 2. How to amend your taxes   Filing Requirements and Required Disclosures Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Annual Information ReturnsSupporting Organization Annual Information Return Unrelated Business Income Tax ReturnEstimated tax. How to amend your taxes Employment Tax ReturnsException. How to amend your taxes FUTA tax exception. How to amend your taxes FICA tax exemption election. How to amend your taxes Revoking the election. How to amend your taxes Definitions. How to amend your taxes Effect on employees. How to amend your taxes Political Organization Income Tax ReturnExempt function. How to amend your taxes Political organization taxable income. How to amend your taxes Separate fund. How to amend your taxes Failure to file. How to amend your taxes Failure to pay on time. How to amend your taxes Reporting Requirements for a Political OrganizationForm 8871 Form 8872 Donee Information ReturnCharitable deduction property. How to amend your taxes Publicly traded securities. How to amend your taxes Exceptions. How to amend your taxes Form 8283. How to amend your taxes Information Provided to DonorsDisclosure of Quid Pro Quo Contributions Acknowledgment of Charitable Contributions of $250 or More Acknowledgment of Vehicle Contribution Qualified Intellectual Property Report of Cash Received Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting FormsAnnual Information Return Public Inspection of Exemption Application Political Organization Reporting Forms Required DisclosuresSolicitation of Nondeductible Contributions Sales of Information or Services Available Free From Government Dues Used for Lobbying or Political Activities Prohibited Tax Shelter Transactions Miscellaneous RulesOrganizational Changes and Exempt Status Introduction Most exempt organizations (including private foundations) must file various returns and reports at some time during (or following the close of) their accounting period. How to amend your taxes Topics - This chapter discusses: Annual information returns Unrelated business income tax return Employment tax returns Political organization income tax return Reporting requirements for a political organization Donee information return Information provided to donors Report of cash received Public inspection of exemption applications, annual returns, and political organizations reporting forms Required disclosures Miscellaneous rules Useful Items - You may want to see: Publication 15 Circular E, Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 598 Tax on Unrelated Business Income of Exempt Organizations Form (and Instructions) 941 Employer's Quarterly Federal Tax Return 990 Return of Organization Exempt From Income Tax 990-EZ Short Form Return of Organization Exempt From Income Tax Schedule A (Form 990 or 990-EZ) Public Charity Status and Public Support Schedule B (Form 990, 990-EZ, or 990-PF) Schedule of Contributors Schedule C (Form 990 or 990-EZ) Political Campaign and Lobbying Activities Schedule D (Form 990) Supplemental Financial Statements Schedule E (Form 990 or 990-EZ) Schools Schedule F (Form 990) Statement of Activities Outside the United States Schedule G (Form 990 or 990-EZ) Supplemental Information Regarding Fundraising or Gaming Activities Schedule H (Form 990) Hospitals Schedule I (Form 990) Grants and Other Assistance to Organizations, Governments, and Individuals in the United States Schedule J (Form 990) Compensation Information Schedule K (Form 990) Supplemental Information on Tax-Exempt Bonds Schedule L (Form 990 or 990-EZ) Transactions With Interested Persons Schedule M (Form 990) Noncash Contributions Schedule N (Form 990 or 990-EZ) Liquidation, Termination, Dissolution, or Significant Disposition of Assets Schedule O (Form 990 or 990-EZ) Supplemental Information to Form 990 Schedule R (Form 990) Related Organizations and Unrelated Partnerships 990-PF Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation 990-BL Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons 990-T Exempt Organization Business Income Tax Return 990-W Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations 1120-POL U. How to amend your taxes S. How to amend your taxes Income Tax Return for Certain Political Organizations 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code 5768 Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation 6069 Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust Under Section 4953 and Computation of Section 192 Deduction 7004 Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns 8274 Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption from Employer Social Security and Medicare Taxes 8282 Donee Information Return 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8453-X Political Organization Declaration for Electronic Filing of Notice of Section 527 Status 8822-B Change of Address-Business 8868 Application for Extension of Time to File an Exempt Organization Return 8870 Information Return for Transfers Associated with Certain Personal Benefits Contracts 8871 Political Organization Notice of Section 527 Status 8872 Political Organization Report of Contributions and Expenditures 8886-T Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction 8899 Notice of Income from Donated Intellectual Property 8940 Request for Miscellaneous Determination See chapter 6 for information about getting these publications and forms. How to amend your taxes Annual Information Returns Every organization exempt from federal income tax under section 501(a) must file an Annual Exempt Organization Return except: A church, an interchurch organization of local units of a church, a convention or association of churches, An integrated auxiliary of a church, A church-affiliated organization that is exclusively engaged in managing funds or maintaining retirement programs, A school below college level affiliated with a church or operated by a religious order, Church-affiliated mission societies if more than half of their activities are conducted in, or are directed at persons in, foreign countries, An exclusively religious activity of any religious order, A state institution, the income of which is excluded from gross income under section 115, A corporation described in section 501(c)(1) that is organized under an Act of Congress, an instrumentality of the United States, and is exempt from Federal income taxes, A stock bonus, pension, or profit-sharing trust that qualifies under section 401 (required to file Form 5500, Annual Return/Report of Employee Benefit Plan), A religious or apostolic organization described in section 501(d) (required to file Form 1065, U. How to amend your taxes S. How to amend your taxes Return of Partnership Income), A governmental unit or an affiliate of a governmental unit that meets the requirements of Revenue Procedure 95-48, 1995-2 C. How to amend your taxes B. How to amend your taxes 418, www. How to amend your taxes irs. How to amend your taxes gov/pub/irs-tege/rp1995-48. How to amend your taxes pdf, A private foundation described in section 501(c)(3) and exempt under section 501(a) (required to file Form 990-PF, Return of Private Foundation), A political organization that is a state or local committee of a political party, a political committee of a state or local candidate, a caucus or association of state or local officials, or required to report under the Federal Election Campaign Act of 1971 as a political committee, An exempt organization (other than a private foundation) that normally has annual gross receipts of $50,000 or less, or A foreign organization, or an organization located in a U. How to amend your taxes S. How to amend your taxes possession, that normally has annual gross receipts from sources within the United States of $50,000 or less. How to amend your taxes Supporting Organization Annual Information Return For tax years ending after August 17, 2006, all section 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ with the IRS regardless of the organization's gross receipts, unless it qualifies as one of the following: An integrated auxiliary of a church; The exclusively religious activities of a religious order; or An organization, the gross receipts of which are normally not more than $5,000, that supports a section 509(a)(3) religious order. How to amend your taxes If the organization is described in item (3) above, then it must submit Form 990-N (e-Postcard) unless it voluntarily files Form 990 or 990-EZ. How to amend your taxes On its annual information return, at Part I, Schedule A (Form 990 or 990-EZ) a supporting organization must: List the section 509(a)(3) organizations to which it provides support, Indicate whether it is a Type I, Type II, or Type III supporting organization, and Certify that the organization is not controlled directly or indirectly by disqualified persons (other than by foundation managers and other than one or more publicly supported organizations). How to amend your taxes Annual Electronic Filing Requirement for Small Tax-Exempt Organizations Small tax-exempt organizations with annual gross receipts normally $50,000 or less must submit Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, with the IRS each year, if they choose not to file a Form 990 or 990-EZ. How to amend your taxes Form 990-N requires the following information: The organization's legal name, and mailing address; Any name under which it operates and does business; Its Internet website address (if any); Its taxpayer identification number; The name and address of a principal officer; Organization's annual tax period; Verification that the organization's annual gross receipts are normally $50,000 or less; and Notification if the organization has terminated. How to amend your taxes Form 990-N is due by the 15th day of the fifth month after the close of the tax year. How to amend your taxes For tax years beginning after December 31, 2006, any organization that fails to meet its annual reporting requirement for 3 consecutive years will automatically lose its tax-exempt status. How to amend your taxes To regain its exempt status an organization will have to reapply for recognition as a tax-exempt organization. How to amend your taxes Exceptions. How to amend your taxes   This filing requirement does not apply to: Churches, their integrated auxiliaries, and conventions or associations of churches; Organizations that are included in a group return; Private foundations required to file Form 990-PF; and Section 509(a)(3) supporting organizations required to file Form 990 or Form 990-EZ. How to amend your taxes Forms 990 and 990-EZ Exempt organizations, other than private foundations, must file their annual information returns on Form 990 or 990-EZ, unless excepted from filing or allowed to submit Form 990-N, described earlier. How to amend your taxes Generally, political organizations with gross receipts of $25,000 ($100,000 for a qualified state or local political organization (QSLPO)) or more for the tax year are required to file Form 990 or 990-EZ unless specifically excepted from filing the annual return. How to amend your taxes The following political organizations are not required to file Form 990 or Form 990-EZ. How to amend your taxes A state or local committee of a political party. How to amend your taxes A political committee of a state or local candidate. How to amend your taxes A caucus or association of state or local officials. How to amend your taxes A political organization that is required to report as a political committee under the Federal Election Campaign Act. How to amend your taxes A 501(c) organization that has expenditures for influencing or attempting to influence the selection, nomination, election, or appointment of any individual for a federal, state, or local public office. How to amend your taxes Form 990-EZ. How to amend your taxes   This is a shortened version of Form 990. How to amend your taxes It is designed for use by small exempt organizations and nonexempt charitable trusts. How to amend your taxes   Beginning in tax year 2010, an organization can file either Form 990 or 990-EZ if it meets the following: Its gross receipts during the year are less than $200,000. How to amend your taxes Its total assets (line 25, column (B) of Form 990-EZ) at the end of the year are less than $500,000. How to amend your taxes If your organization does not meet either of these conditions, you cannot file Form 990-EZ. How to amend your taxes Instead you must file Form 990. How to amend your taxes Group return. How to amend your taxes   A group return on Form 990 may be filed by a central, parent, or like organization for two or more local organizations, none of which is a private foundation. How to amend your taxes This return is in addition to the central organization's separate annual return if it must file a return. How to amend your taxes It cannot be included in the group return. How to amend your taxes See the instructions for Form 990 for the conditions under which this procedure may be used. How to amend your taxes    In any year that an organization is properly included as a subordinate organization on a group return, it should not file its own Form 990. How to amend your taxes Schedule A (Form 990 or 990-EZ). How to amend your taxes   Organizations, other than private foundations, that are described in section 501(c)(3) and that are otherwise required to file Form 990 or 990-EZ must also complete Schedule A of that form. How to amend your taxes Schedule B (Form 990, Form 990-EZ, or 990-PF). How to amend your taxes   Organizations that file Form 990 or 990-EZ use this schedule to provide required information regarding their contributors. How to amend your taxes Schedule O (Form 990). How to amend your taxes   Organizations that file Form 990 must use this schedule to provide required additional information or if additional space is needed. How to amend your taxes   Other schedules may be required to be filed with Form 990 or 990-EZ. How to amend your taxes See the instructions for Form 990 or the instructions for Form 990-EZ for more information. How to amend your taxes Report significant new or changed program services and changes to organizational documents. How to amend your taxes    An organization should report new significant program services or significant changes in how it conducts program services, and significant changes to its organizational documents, on its Form 990 rather than in a letter to EO Determinations. How to amend your taxes EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report new services or significant changes, or changes to organizational documents. How to amend your taxes See Miscellaneous Rules, Organization Changes and Exempt Status, later. How to amend your taxes Form 990-PF All private foundations exempt under section 501(c)(3) must file Form 990-PF. How to amend your taxes These organizations are discussed in chapter 3. How to amend your taxes Electronic Filing You may be required to file Form 990, Form 990-EZ, or Form 990-PF, and related forms, schedules, and attachments electronically. How to amend your taxes If an organization is required to file a return electronically but does not, the organization is considered to have not filed its return. How to amend your taxes See Regulations section 301. How to amend your taxes 6033-4 for more information. How to amend your taxes The IRS may waive the requirement to file electronically in cases of undue hardship. How to amend your taxes For information on filing a waiver, see Notice 2010-13, 2010-4 I. How to amend your taxes R. How to amend your taxes B. How to amend your taxes 327, available at www. How to amend your taxes irs. How to amend your taxes gov/ir/2010-04_IRSB/ar14. How to amend your taxes html. How to amend your taxes Form 990. How to amend your taxes   An organization is required to file Form 990 electronically if it files at least 250 returns during the calendar year and has total assets of $10 million or more at the end of the tax year. How to amend your taxes Form 990-PF. How to amend your taxes   An organization is required to file Form 990-PF electronically if it files at least 250 returns during the calendar year. How to amend your taxes Due Date Forms 990, 990-EZ, or 990-PF must be filed by the 15th day of the fifth month after the end of your organization's accounting period. How to amend your taxes Thus, for a calendar year taxpayer, Forms 990, 990-EZ, or 990-PF is due May 15 of the following year. How to amend your taxes Extension of time to file. How to amend your taxes   Use Form 8868 to request an automatic 3-month extension of time to file Forms 990, 990-EZ, or 990-PF and also to apply for an additional (not automatic) 3-month extension if needed. How to amend your taxes   Do not apply for both the automatic 3-month extension and the additional 3-month extension at the same time. How to amend your taxes For more information, see Form 8868 and its instructions. How to amend your taxes   When filing Form 8868 for an automatic 3-month extension, neither a signature, nor an explanation is required. How to amend your taxes However, when filing Form 8868 for an additional 3-month extension, both a signature and an explanation are required. How to amend your taxes Application for exemption pending. How to amend your taxes   An organization that claims to be exempt under section 501(a) but has not established its exempt status by the due date for filing an information return must complete and file Form 990, 990-EZ, 990–N or 990-PF (if it considers itself a private foundation), unless the organization is exempt from Form 990-series filing requirements. How to amend your taxes If the organization's application is pending with the IRS, it must so indicate on Forms 990, 990-EZ, or 990-PF (whichever applies) by checking the application pending block at the top of page 1 of the return. How to amend your taxes For more information on the filing requirements, see the Instructions for Forms 990, 990-EZ, and 990-PF. How to amend your taxes State reporting requirements. How to amend your taxes   Copies of Forms 990, 990-EZ, or 990-PF may be used to satisfy state reporting requirements. How to amend your taxes See the instructions for those forms. How to amend your taxes Form 8870. How to amend your taxes   Organizations that filed a Form 990, 990-EZ, or 990-PF, and paid premiums or received transfers on certain life insurance, annuity, and endowment contracts (personal benefit contracts), must file Form 8870. How to amend your taxes For more information, see Form 8870 and the instructions for that form. How to amend your taxes Automatic Revocation If the organization fails to file a Form 990, 990-EZ, or 990-PF, or fails to submit a Form 990-N, as required, for 3 consecutive years, it will automatically lose its tax-exempt status by operation of law. How to amend your taxes The list of organizations whose tax-exempt status has been automatically revoked is available on IRS. How to amend your taxes gov. How to amend your taxes This list (Auto-Revocation List) may be viewed and searched on Exempt Organizations Select Check. How to amend your taxes The Auto-Revocation List includes each organization's name, Employer Identification Number (EIN) and last known address. How to amend your taxes It also includes the effective date of the automatic revocation and the date it was posted to the list. How to amend your taxes The IRS updates the list monthly to include additional organizations that lose their tax-exempt status. How to amend your taxes Tax Effect of Loss of Tax-Exempt Status If your organization’s tax-exempt status is automatically revoked, you may be required to file one of the following federal income tax returns and pay any applicable income taxes: Form 1120, U. How to amend your taxes S. How to amend your taxes Corporation Income Tax Return, due by the 15th day of the 3rd month after the end of your organization’s tax year, or Form 1041, U. How to amend your taxes S. How to amend your taxes Income Tax Return for Estates and Trusts, due by the 15th day of the 4th month after the end of your organization’s tax year. How to amend your taxes In addition, a section 501(c)(3) organization that loses its tax-exempt status cannot receive tax-deductible contributions and will not be identified in the IRS Business Master File extract as eligible to received tax-deductible contributions, or be included in Exempt Organizations Select Check (Pub 78 database). How to amend your taxes An organization whose exemption was automatically revoked must apply for tax exemption in order to regain its tax exemption (even if it was not originally required to apply). How to amend your taxes In some situations, an organization may be able to obtain exemption retroactive to its date of revocation. How to amend your taxes For more information about automatic revocation, go to IRS. How to amend your taxes gov and select Charities & Non-Profits and then select Revoked? Reinstated? Learn More. How to amend your taxes Penalties Penalties for failure to file. How to amend your taxes   Generally, an exempt organization that fails to file a required return must pay a penalty of $20 a day for each day the failure continues. How to amend your taxes The same penalty will apply if the organization does not give all the information required on the return or does not give the correct information. How to amend your taxes Maximum penalty. How to amend your taxes   The maximum penalty for any one return is the smaller of $10,000 or 5% of the organization's gross receipts for the year. How to amend your taxes Organization with gross receipts over $1 million. How to amend your taxes   For an organization that has gross receipts of over $1 million for the year, the penalty is $100 a day up to a maximum of $50,000. How to amend your taxes Managers. How to amend your taxes   If the organization is subject to this penalty, the IRS may specify a date by which the return or correct information must be supplied by the organization. How to amend your taxes Failure to comply with this demand will result in a penalty imposed upon the manager of the organization, or upon any other person responsible for filing a correct return. How to amend your taxes The penalty is $10 a day for each day that a return is not filed after the period given for filing. How to amend your taxes The maximum penalty imposed on all persons with respect to any one return is $5,000. How to amend your taxes Exception for reasonable cause. How to amend your taxes   No penalty will be imposed if reasonable cause for failure to file timely can be shown. How to amend your taxes Unrelated Business Income Tax Return Even though your organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. How to amend your taxes Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis for the organization's exemption. How to amend your taxes If your organization has $1,000 or more of unrelated business income, you must file Form 990-T in addition to your required annual information return. How to amend your taxes Estimated tax. How to amend your taxes   Quarterly estimated tax payments are due if your organization expects to owe $500 or more in tax including unrelated business income. How to amend your taxes Use Form 990-W to figure your organization's estimated tax payments. How to amend your taxes Travel tour programs. How to amend your taxes   Travel tour activities that are a trade or business are an unrelated trade or business if the activities are not substantially related to the purpose to which tax exemption was granted to the organization. How to amend your taxes   Whether travel tour activities conducted by an organization are substantially related to the organization's tax exempt purpose is determined by looking at all the relevant facts and circumstances, including, but not limited to, how a travel tour is developed, promoted, and operated. How to amend your taxes Example. How to amend your taxes ABC, a university alumni association, is tax exempt as an educational organization under section 501(c)(3). How to amend your taxes As part of its activities, ABC operates a travel tour program. How to amend your taxes The program is open to all current members of ABC and their guests. How to amend your taxes ABC works with travel agents to schedule approximately ten tours annually to various destinations around the world. How to amend your taxes Members of ABC pay $1,000 to XYZ Travel Agency to participate in a tour. How to amend your taxes XYZ pays ABC a per person fee for each participant. How to amend your taxes Although the literature advertising the tours encourages ABC members to continue their lifelong learning by joining the tours, and a faculty member of ABC's related university frequently joins the tour as a guest of the alumni association, none of the tours include any scheduled instruction or curriculum related to the destinations being visited. How to amend your taxes The travel tours made available to ABC's members do not contribute importantly to the accomplishment of ABC's educational purpose. How to amend your taxes Rather, ABC's program is designed to generate revenues for ABC by regularly offering its members travel services. How to amend your taxes Therefore, ABC's tour program is an unrelated trade or business. How to amend your taxes For additional information on unrelated business income, see Publication 598 and the Instructions for Form 990-T. How to amend your taxes Employment Tax Returns Every employer, including an organization exempt from federal income tax, who pays wages to employees is responsible for withholding, depositing, paying, and reporting federal income tax, social security and Medicare (FICA) taxes, and federal unemployment tax (FUTA), unless that employer is specifically excepted by law from those requirements, or if the taxes clearly do not apply. How to amend your taxes For more information, obtain a copy of Publication 15, which summarizes the responsibilities of an employer, Publication 15-A, Publication 15-B, and Form 941. How to amend your taxes Small Business Health Care Tax Credit. How to amend your taxes   If your small tax-exempt organization provides health care coverage for your workers you may qualify for the small business health care tax credit. How to amend your taxes Go to IRS. How to amend your taxes gov and select Affordable Care Act Tax Provisions for more details. How to amend your taxes See Small Business Health Care Tax Credit at www. How to amend your taxes irs. How to amend your taxes gov/newsroom/article/0,,id=223666,00. How to amend your taxes html. How to amend your taxes Expanded Work Opportunity Tax Credit Available for Hiring Qualified Veterans. How to amend your taxes   The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC). How to amend your taxes The Act added two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer's share of social security tax. How to amend your taxes The Act allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013. How to amend your taxes This tax credit was extended through December 31, 2013, under the American Taxpayer Relief Act, passed on January 1, 2013. How to amend your taxes   The credit can be as high as $6,240 for qualified tax-exempt organizations. How to amend your taxes The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. How to amend your taxes The amount of the credit for qualified tax-exempt organizations may not exceed the organization's employer social security tax for the period for which the credit is claimed. How to amend your taxes   All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. How to amend your taxes The process for certifying veterans for this credit is the same for all employers. How to amend your taxes For more information, see Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit and the instructions to Form 8850. How to amend your taxes Notice 2012-13, 2012-9 I. How to amend your taxes R. How to amend your taxes B. How to amend your taxes 421, also provides additional guidance on submission Form 8850. How to amend your taxes   Organizations described in section 501(c) and exempt from taxation under section 501(a) may claim the credit for qualified veterans who begin work on or after Nov. How to amend your taxes 22, 2011, and before January 1, 2013. How to amend your taxes After the required certification is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax-Exempt Organizations Hiring Qualified Veterans, Form 5884-C. How to amend your taxes File Form 5884-C after filing the related employment tax return for the employment tax period for which the credit is claimed. How to amend your taxes It is recommended that qualified tax-exempt employers do not reduce their required deposits in anticipation of any credit as the forms are processed separately. How to amend your taxes In addition to Form 5884-C and its instructions, tax-exempt employers should see Notice 2012-13 and the Frequently Asked Questions & Answers for more details for claiming the credit. How to amend your taxes Trust fund recovery penalty. How to amend your taxes   If any person required to collect, truthfully account for, and pay over any of these taxes willfully fails to satisfy any of these requirements or willfully tries in any way to evade or defeat any of them, that person will be subject to a penalty. How to amend your taxes The penalty is equal to the tax evaded, not collected, or not accounted for and paid over. How to amend your taxes The term person includes: An officer or employee of a corporation, or A member or employee of a partnership. How to amend your taxes Exception. How to amend your taxes   The penalty is not imposed on any unpaid volunteer director or member of a board of trustees of an exempt organization if the unpaid volunteer serves solely in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which the penalty is imposed. How to amend your taxes   This exception does not apply if it results in no one being liable for the penalty. How to amend your taxes FICA and FUTA tax exceptions. How to amend your taxes   Payments for services performed by a minister of a church in the exercise of the ministry, or a member of a religious order performing duties required by the order, are generally not subject to FICA or FUTA taxes. How to amend your taxes FUTA tax exception. How to amend your taxes   Payments for services performed by an employee of a religious, charitable, educational, or other organization described in section 501(c)(3) that are generally subject to FICA taxes if the payments are $100 or more for the year, are not subject to FUTA taxes. How to amend your taxes FICA tax exemption election. How to amend your taxes   Churches and qualified church-controlled organizations can elect exemption from employer FICA taxes by filing Form 8274. How to amend your taxes   To elect the exemption, Form 8274 must be filed before the first date on which a quarterly employment tax return would otherwise be due from the electing organization. How to amend your taxes The organization can make the election only if it is opposed for religious reasons to the payment of FICA taxes. How to amend your taxes   The election applies to payments for services of current and future employees other than services performed in an unrelated trade or business. How to amend your taxes Revoking the election. How to amend your taxes   The election can be revoked by the IRS if the organization fails to file Form W-2, Wage and Tax Statement, for 2 years and fails to furnish certain information upon request by the IRS. How to amend your taxes Such revocation will apply retroactively to the beginning of the 2-year period. How to amend your taxes Definitions. How to amend your taxes   For purposes of this election, the term church means a church, a convention or association of churches, or an elementary or secondary school that is controlled, operated, or principally supported by a church or by a convention or association of churches. How to amend your taxes   The term qualified church-controlled organization means any church-controlled section 501(c)(3) tax-exempt organization, other than an organization that both: Offers goods, services, or facilities for sale, other than on an incidental basis, to the general public at other than a nominal charge that is substantially less than the cost of providing such goods, services, or facilities, and Normally receives more than 25% of its support from the sum of governmental sources and receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities that are not unrelated trades or businesses. How to amend your taxes Effect on employees. How to amend your taxes   If a church or qualified church-controlled organization has made an election, payment for services performed for that church or organization, other than in an unrelated trade or business, will not be subject to FICA taxes. How to amend your taxes However, the employee, unless otherwise exempt, will be subject to self-employment tax on the income. How to amend your taxes The tax applies to income of $108. How to amend your taxes 28 or more for the tax year from that church or organization, and no deductions for trade or business expenses are allowed against this self-employment income. How to amend your taxes   Schedule SE (Form 1040), Self-Employment Tax, should be attached to the employee's income tax return. How to amend your taxes Political Organization Income Tax Return Generally, a political organization is treated as an organization exempt from tax. How to amend your taxes Certain political organizations, however, must file an annual income tax return, Form 1120-POL, U. How to amend your taxes S. How to amend your taxes Income Tax Return for Certain Political Organizations, for any year they have political organization taxable income in excess of the $100 specific deduction allowed under section 527. How to amend your taxes A political organization that has $25,000 ($100,000 for a qualified state or local political organization) or more in gross receipts for the tax year must file Form 990 or Form 990-EZ (and Schedule B of the form), unless excepted. How to amend your taxes See Forms 990 and 990-EZ , earlier. How to amend your taxes Political organization. How to amend your taxes   A political organization is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. How to amend your taxes Exempt function. How to amend your taxes   An exempt function means influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, local public office or office in a political organization, or the election of the Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. How to amend your taxes It also includes certain office expenses of a holder of public office or an office in a political organization. How to amend your taxes Certain political organizations are required to notify the IRS that they are section 527 organizations. How to amend your taxes These organizations must use Form 8871. How to amend your taxes Some of these section 527 organizations must use Form 8872 to file periodic reports with the IRS disclosing their contributions and expenditures. How to amend your taxes For a discussion on these forms, see Reporting Requirements for a Political Organization, later. How to amend your taxes Political organization taxable income. How to amend your taxes   Political organization taxable income is the excess of: Gross income for the tax year (excluding exempt function income) minus Deductions directly connected with the earning of gross income. How to amend your taxes To figure taxable income, allow for a $100 specific deduction, but do not allow for the net operating loss deduction, the dividends-received deduction, and other special deductions for corporations. How to amend your taxes Exempt organization not a political organization. How to amend your taxes   An organization exempt under section 501(c) that spends any amount for an exempt function must file Form 1120-POL for any year which it has political taxable income. How to amend your taxes These organizations must include in gross income the lesser of: The total amount of its exempt function expenditures, or The organization's net investment income. How to amend your taxes Separate fund. How to amend your taxes   A section 501(c) organization can set up a separate segregated fund that will be treated as an independent political organization. How to amend your taxes The earnings and expenditures made by the separate fund will not be attributed to the section 501(c) organization. How to amend your taxes Section 501(c)(3) organizations are precluded from, and may suffer loss of exemption for, engaging in any political campaign on behalf of, or in opposition to, any candidate for public office. How to amend your taxes Due date. How to amend your taxes   Form 1120-POL is due by the 15th day of the 3rd month after the end of the tax year. How to amend your taxes Thus, for a calendar year taxpayer, Form 1120-POL is due on March 15 of the following year. How to amend your taxes If any due date falls on a Saturday, Sunday, or legal holiday, the organization can file the return on the next business day. How to amend your taxes    Form 1120-POL is not required of an exempt organization that makes expenditures for political purposes if its gross income does not exceed its directly connected deductions by more than $100 for the tax year. How to amend your taxes Extension of time to file. How to amend your taxes    Use Form 7004 to request an automatic 6-month extension of time to file Form 1120-POL. How to amend your taxes The extension will be granted if you complete Form 7004 properly, make a proper estimate of the tax (if applicable), file Form 1120-POL by the due date, and pay any tax due. How to amend your taxes Failure to file. How to amend your taxes   A political organization that fails to file Form 1120-POL is subject to a penalty equal to 5% of the tax due for each month (or partial month) the return is late up to a maximum of 25% of the tax due, unless the organization shows the failure was due to reasonable cause. How to amend your taxes For more information about filing Form 1120-POL, refer to the instructions accompanying the form. How to amend your taxes Failure to pay on time. How to amend your taxes   An organization that does not pay the tax when due generally may have to pay a penalty of 1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax. How to amend your taxes The penalty will not be imposed if the organization can show that the failure to pay on time was due to reasonable cause. How to amend your taxes Reporting Requirements for a Political Organization Certain political organizations are required to notify the IRS that the organization is to be treated as a section 527 political organization. How to amend your taxes The organization is also required to periodically report certain contributions received and expenditures made by the organization. How to amend your taxes To notify the IRS of section 527 treatment, an organization must file Form 8871. How to amend your taxes To report contributions and expenditures, certain tax-exempt political organizations must file Form 8872. How to amend your taxes Form 8871 A political organization must electronically file Form 8871 to notify the IRS that it is to be treated as a section 527 organization. How to amend your taxes However, an organization is not required to file Form 8871 if: It reasonably expects its annual gross receipts to always be less than $25,000. How to amend your taxes It is a political committee required to report under the Federal Election Campaign Act of 1971 (FECA) (2 U. How to amend your taxes S. How to amend your taxes C. How to amend your taxes 431(4)). How to amend your taxes It is a state or local candidate committee. How to amend your taxes It is a state or local committee of a political party. How to amend your taxes It is a section 501(c) organization that has made an “exempt function expenditure. How to amend your taxes ” All other political organizations are required to file Form 8871. How to amend your taxes An organization must provide on Form 8871: Its name and address (including any business address, if different) and its electronic mailing address; Its purpose; The names and addresses of its officers, highly compensated employees, contact person, custodian of records, and members of its board of directors; The name and address of, and relationship to, any related entities (within the meaning of section 168(h)(4)); and Whether it intends to claim an exemption from filing Form 8872, Form 990, or Form 990-EZ. How to amend your taxes Employer identification number. How to amend your taxes   If your organization needs an EIN, you can apply for one: Online—Click on the Employer ID Numbers (EINs) link at www. How to amend your taxes IRS. How to amend your taxes gov/businesses/small. How to amend your taxes By telephone at 1-800-829-4933 from 7:00 a. How to amend your taxes m. How to amend your taxes to 10:00 p. How to amend your taxes m. How to amend your taxes in the organization's local time zone. How to amend your taxes By mailing or faxing Form SS-4. How to amend your taxes   If you previously applied for an EIN and have not yet received it, or you are unsure whether you have an EIN, please call our toll-free customer account services number, 1-877-829-5500, for assistance. How to amend your taxes Due dates. How to amend your taxes   The initial Form 8871 must be filed within 24 hours of the date on which the organization was established. How to amend your taxes If there is a material change, an amended Form 8871 must be filed within 30 days of the material change. How to amend your taxes When the organization terminates its existence, it must file a final Form 8871 within 30 days of termination. How to amend your taxes   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. How to amend your taxes How to file. How to amend your taxes   An organization must file Form 8871 electronically via the IRS Internet website at www. How to amend your taxes IRS. How to amend your taxes gov/polorgs (Keyword: political orgs). How to amend your taxes Form 8453-X, Political Organization Declaration for Electronic Filing of Notice of Section 527 Status. How to amend your taxes   After electronically submitting Form 8871, the political organization must print, sign, and mail Form 8453-X to the IRS. How to amend your taxes Upon receipt of the Form 8453-X, the IRS will send the organization a username and password that must be used to file an amended or final Form 8871 or to electronically file Form 8872. How to amend your taxes Penalties Failure to file. How to amend your taxes   An organization that is required to file Form 8871, but fails to do so on a timely basis, will not be treated as a tax-exempt section 527 organization for any period before the date Form 8871 is filed. How to amend your taxes Also, the taxable income of the organization for that period will include its exempt function income (including contributions received, membership dues, and political fundraising receipts) minus any deductions directly connected with the production of that income. How to amend your taxes   Failure to file an amended Form 8871 will cause the organization not to be treated as a tax-exempt section 527 organization. How to amend your taxes If an organization is treated as not being a tax-exempt section 527 organization, the taxable income of the organization will be determined by considering any exempt function income and deductions during the period beginning on the date of the material change and ending on the date that the amended Form 8871 is filed. How to amend your taxes    The tax is computed by multiplying the organization's taxable income by the highest corporate tax rate. How to amend your taxes Fraudulent returns. How to amend your taxes   Any individual or corporation that willfully delivers or discloses to the IRS any list, return, account, statement or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned for not more than 1 year or both. How to amend your taxes Waiver of penalties. How to amend your taxes   The IRS may waive any additional tax assessed on an organization for failure to file Form 8871 if the failure was due to reasonable cause and not willful neglect. How to amend your taxes Additional information. How to amend your taxes   For more information on Form 8871, see the form and its instructions. How to amend your taxes For a discussion on the public inspection requirements for the form, see Public Inspection of Exemption Applications, Annual Returns, and Political Organization Reporting Forms , later. How to amend your taxes Form 8872 Every tax-exempt section 527 political organization that accepts a contribution or makes an expenditure, for an exempt function during the calendar year, must file Form 8872 except: A political organization that is not required to file Form 8871 (discussed earlier). How to amend your taxes A political organization that is subject to tax on its income because it did not file or amend Form 8871. How to amend your taxes A qualified state or local political organization (QSLPO), discussed below. How to amend your taxes All other tax-exempt section 527 organizations that accept contributions or make expenditures for an exempt function are required to file Form 8872. How to amend your taxes Qualified state or local political organization. How to amend your taxes   A state or local political organization may be a QSLPO if: All of its political activities relate solely to state or local public office (or office in a state or local political organization). How to amend your taxes It is subject to a state law that requires it to report (and it does report) to a state agency information about contributions and expenditures that is similar to the information that the organization would otherwise be required to report to the IRS. How to amend your taxes The state agency and the organization make the reports publicly available. How to amend your taxes No federal candidate or office holder: Controls or materially participates in the direction of the organization, Solicits contributions for the organization, or Directs the disbursements of the organization. How to amend your taxes Information required on Form 8872. How to amend your taxes   If an organization pays an individual $500 or more for the calendar year, the organization is required to disclose the individual's name, address, occupation, employer, amount of the expense, the date the expense was paid, and the purpose of the expense on Form 8872. How to amend your taxes   If an organization receives contributions of $200 or more from one contributor for the calendar year, the organization must disclose the donor's name, address, occupation, employer, and the date the contributions were made. How to amend your taxes   For additional information that is required, see Form 8872. How to amend your taxes Due dates. How to amend your taxes   The due dates for filing Form 8872 vary depending on whether the form is due for a reporting period that occurs during a calendar year in which a regularly scheduled election is held, or any other calendar year (a nonelection year). How to amend your taxes   If the due date falls on a Saturday, Sunday, or legal holiday, the organization can file on the next business day. How to amend your taxes Election year filing. How to amend your taxes    In election years, Form 8872 must be filed on either a quarterly or a monthly basis. How to amend your taxes Both a pre-election report and a post-election report are also required to be filed in an election year. How to amend your taxes An election year is any year in which a regularly scheduled general election for federal office is held (an even-numbered year). How to amend your taxes Nonelection year filing. How to amend your taxes    In nonelection years, the form must be filed on a semiannual or monthly basis. How to amend your taxes A complete listing of these filing periods are in the Form 8872 Instructions. How to amend your taxes A nonelection year is any odd-numbered year. How to amend your taxes How to file. How to amend your taxes   Form 8872 can be filed either electronically or by mail. How to amend your taxes However, organizations that have, or expect to have, contributions or expenditures of $50,000 or more for the year must file electronically. How to amend your taxes    To file by mail, send Form 8872 to the:   Department of the Treasury Internal Revenue Service Center Ogden, UT 84201-0027 Electronic filing. How to amend your taxes   File electronically via the IRS internet website at www. How to amend your taxes IRS. How to amend your taxes gov/polorgs. How to amend your taxes You will need a user ID and password to electronically file Form 8872. How to amend your taxes Organizations that have completed the electronic filing of Form 8871 and submitted a completed and signed Form 8453-X will receive a username and password in the mail. How to amend your taxes   Organizations that have completed the electronic filing of Form 8871, but have not received their user ID and password can request one by writing to the following address: Internal Revenue Service Attn: Request for 8872 Password Mail Stop 6273 Ogden, UT 84201 Lost username and password. How to amend your taxes   If you have forgotten or misplaced the username and password issued to your organization after you filed your initial Form 8871, send a letter requesting a new username and password to the address under Electronic filing. How to amend your taxes You can also fax your request to (801) 620-3249. How to amend your taxes It may take 3-6 weeks for your new username and password to arrive, as they will be mailed to the organization. How to amend your taxes Penalty A penalty will be imposed if the organization is required to file Form 8872 and it: Fails to file the form by the due date, or Files the form but fails to report all of the information required or reports incorrect information. How to amend your taxes The penalty is 35% of the total amount of contributions and expenditures to which a failure relates. How to amend your taxes Fraudulent returns. How to amend your taxes   Any individual or corporation that willfully delivers or discloses any list, return, account, statement, or other document known to be fraudulent or false as to any material matter will be fined not more than $10,000 ($50,000 in the case of a corporation), or imprisoned for not more than 1 year, or both. How to amend your taxes Waiver of penalties. How to amend your taxes   The IRS may waive any additional tax assessed on an organization for failure to file Form 8872 if the failure was due to reasonable cause and not willful neglect. How to amend your taxes Donee Information Return Dispositions of donated property. How to amend your taxes   If an organization receives charitable deduction property and within three years sells, exchanges, or otherwise disposes of the property, the organization must file Form 8282, Donee Information Return. How to amend your taxes However, an organization is not required to file Form 8282 if: The property is valued at $500 or less, or The property is consumed or distributed for charitable purposes. How to amend your taxes   Form 8282 must be filed with the IRS within 125 days after the disposition. How to amend your taxes Additionally, a copy of Form 8282 must be given to the donor. How to amend your taxes If the organization fails to file the required information return, penalties may apply. How to amend your taxes Charitable deduction property. How to amend your taxes   This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283, Noncash Charitable Contributions. How to amend your taxes Publicly traded securities. How to amend your taxes   These are securities for which market quotations are readily available on an established securities market as of the date of the contribution. How to amend your taxes Appraisal summary. How to amend your taxes   If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property, see the Exceptions. How to amend your taxes below. How to amend your taxes Exceptions. How to amend your taxes   A written appraisal is not needed if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane), if your deduction for the vehicle is limited to the gross proceeds from its sale, Intellectual property, Certain securities considered to have market quotations readily available (see Regulations section 1. How to amend your taxes 170A-13(c)(7)(xi)(B)), Inventory and other property donated by a corporation that are qualified contributions for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or Any donation of stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. How to amend your taxes   The donee organization is not a qualified appraiser for the purpose of valuing the donated property. How to amend your taxes For more information, get Publication 561, Determining the Value of Donated Property. How to amend your taxes Form 8283. How to amend your taxes   For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. How to amend your taxes The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. How to amend your taxes The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. How to amend your taxes The signature does not represent concurrence in the appraised value of the contributed property. How to amend your taxes A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. How to amend your taxes The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. How to amend your taxes A copy of Form 8283 must be given to the donee. How to amend your taxes Information Provided to Donors In some situations, a donor must obtain certain information from a donee organization to obtain a deduction for a charitable contribution. How to amend your taxes In other situations, the donee organization is required to provide information to the donor. How to amend your taxes A charitable organization must give a donor a disclosure statement for a quid pro quo contribution over $75. How to amend your taxes (See Disclosure statement. How to amend your taxes later. How to amend your taxes ) This is a payment a donor makes to a charity partly as a contribution and partly for goods or services. How to amend your taxes See Quid pro quo contribution below for an example. How to amend your taxes Failure to make the required disclosure may result in a penalty to the organization. How to amend your taxes A donor cannot deduct a charitable contribution of $250 or more unless the donor has a written acknowledgment from the charitable organization. How to amend your taxes In certain circumstances, an organization may be able to meet both of these requirements with the same written document. How to amend your taxes Disclosure of Quid Pro Quo Contributions A charitable organization must provide a written disclosure statement to donors of a quid pro quo contribution over $75. How to amend your taxes Quid pro quo contribution. How to amend your taxes   A contribution made by a donor in exchange for goods or services is known as a quid pro quo contribution. How to amend your taxes Your charitable organization must provide the donor a written statement informing the donor of the fair market value of the items or services it provided in exchange for the contribution. How to amend your taxes Generally, a written statement is required for each payment, whenever the contribution portion is over $75. How to amend your taxes Example. How to amend your taxes If a donor gives your charity $100 and receives a concert ticket valued at $40, the donor has made a quid pro quo contribution. How to amend your taxes In this example, the charitable part of the payment is $60. How to amend your taxes Even though the deductible part of the payment is not more than $75, a written statement must be filed because the total payment is more than $75. How to amend your taxes If your organization fails to disclose quid pro quo contributions, the organization may be subject to a penalty. How to amend your taxes Disclosure statement. How to amend your taxes   The required written disclosure statement must: Inform the donor that the amount of the contribution that is deductible for federal income tax purposes is limited to the excess of any money (and the value of any property other than money) contributed by the donor over the fair market value of goods or services provided by the charity, and Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received. How to amend your taxes The charity must furnish the statement in connection with either the solicitation or the receipt of the quid pro quo contribution. How to amend your taxes If the disclosure statement is furnished in connection with a particular solicitation, it is not necessary for the organization to provide another statement when it actually receives the contribution. How to amend your taxes   No disclosure statement is required if any of the following are true. How to amend your taxes The goods or services given to a donor have insubstantial value as described in Revenue Procedure 90-12, 1990-1 C. How to amend your taxes B. How to amend your taxes 471, Revenue Procedure 90-12, and Revenue Procedure 92-49, 1992-1 C. How to amend your taxes B. How to amend your taxes 507 (as adjusted for inflation), Revenue Procedure 92-49. How to amend your taxes There is no donative element involved in a particular transaction with a charity (for example, there is generally no donative element involved in a visitor's purchase from a museum gift shop). How to amend your taxes There is only an intangible religious benefit provided to the donor. How to amend your taxes The intangible religious benefit must be provided to the donor by an organization organized exclusively for religious purposes, and must be of a type that generally is not sold in a commercial transaction outside the donative context. How to amend your taxes For example, a donor who, for a payment, is granted admission to a religious ceremony for which there is no admission charge is provided an intangible religious benefit. How to amend your taxes A donor is not provided intangible religious benefits for payments made for tuition for education leading to a recognized degree, travel services, or consumer goods. How to amend your taxes The donor makes a payment of $75 or less per year and receives only annual membership benefits that consist of: Any rights or privileges (other than the right to purchase tickets for college athletic events) that the taxpayer can exercise often during the membership period, such as free or discounted admissions or parking or preferred access to goods or services, or Admission to events that are open only to members and the cost per person of which is within the limits for low-cost articles described in Revenue Procedure 90-12 (as adjusted for inflation), Revenue Procedure 90-12. How to amend your taxes Good faith estimate of fair market value (FMV). How to amend your taxes   An organization can use any reasonable method to estimate the FMV of goods or services it provided to a donor, as long as it applies the method in good faith. How to amend your taxes   The organization can estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. How to amend your taxes Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued. How to amend your taxes Example 1. How to amend your taxes A charity provides a 1-hour tennis lesson with a tennis professional for the first $500 payment it receives. How to amend your taxes The tennis professional provides 1-hour lessons on a commercial basis for $100. How to amend your taxes A good faith estimate of the lesson's FMV is $100. How to amend your taxes Example 2. How to amend your taxes For a payment of $50,000, a museum allows a donor to hold a private event in a room of the museum. How to amend your taxes A good faith estimate of the FMV of the right to hold the event in the museum can be made by using the cost of renting a hotel ballroom with a capacity, amenities, and atmosphere comparable to the museum room, even though the hotel ballroom lacks the unique art displayed in the museum room. How to amend your taxes If the hotel ballroom rents for $2,500, a good faith estimate of the FMV of the right to hold the event in the museum is $2,500. How to amend your taxes Example 3. How to amend your taxes For a payment of $1,000, a charity provides an evening tour of a museum conducted by a well-known artist. How to amend your taxes The artist does not provide tours on a commercial basis. How to amend your taxes Tours of the museum normally are free to the public. How to amend your taxes A good faith estimate of the FMV of the evening museum tour is $0 even though it is conducted by the artist. How to amend your taxes Penalty for failure to disclose. How to amend your taxes   A penalty is imposed on a charity that does not make the required disclosure of a quid pro quo contribution of more than $75. How to amend your taxes The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing. How to amend your taxes The charity can avoid the penalty if it can show that the failure was due to reasonable cause. How to amend your taxes Acknowledgment of Charitable Contributions of $250 or More A donor can deduct a charitable contribution of $250 or more only if the donor has a written acknowledgment from the charitable organization. How to amend your taxes The donor must get the acknowledgment by the earlier of: The date the donor files the original return for the year the contribution is made, or The due date, including extensions, for filing the return. How to amend your taxes The donor is responsible for requesting and obtaining the written acknowledgment from the donee. How to amend your taxes A charitable organization that receives a payment made as a contribution is treated as the donee organization for this purpose even if the organization (according to the donor's instructions or otherwise) distributes the amount received to one or more charities. How to amend your taxes Quid pro quo contribution. How to amend your taxes   If the donee provides goods or services to the donor in exchange for the contribution (a quid pro quo contribution), the acknowledgment must include a good faith estimate of the value of the goods or services. How to amend your taxes See Disclosure of Quid Pro Quo Contributions earlier. How to amend your taxes Form of acknowledgment. How to amend your taxes   Although there is no prescribed format for the written acknowledgment, it must provide enough information to substantiate the amount of the contribution. How to amend your taxes For more information, see IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements. How to amend your taxes Cash contributions. How to amend your taxes   To deduct a contribution of cash, a check, or other monetary gift (regardless of the amount), a donor must maintain a bank record or a written communication from the donee organization showing the donee's name, date, and amount of the contribution. How to amend your taxes In the case of a lump-sum contribution (rather than a contribution by payroll deduction) made through the Combined Federal Campaign or a similar program such as a United Way Campaign, the written communication must include the name of the donee organization that is the ultimate recipient of the charitable contribution. How to amend your taxes Contributions by payroll deduction. How to amend your taxes   An organization may substantiate an employee's contribution by deduction from its payroll by: A pay stub, Form W-2, or other document showing a contribution to a donee organization, together with A pledge card or other document from the donee organization that shows its name. How to amend your taxes   For contributions of $250 or more, the document must state that the donee organization provides no goods or services for any payroll contributions. How to amend your taxes The amount withheld from each payment of wages to a taxpayer is treated as a separate contribution. How to amend your taxes Acknowledgment of Vehicle Contribution If an exempt organization receives a contribution of a qualified vehicle with a claimed value of more than $500, the donee organization is required to provide a contemporaneous written acknowledgment to the donor. How to amend your taxes The donee organization can use a completed Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, for the contemporaneous written acknowledgment. How to amend your taxes See section 3. How to amend your taxes 03 of Notice 2005-44 for guidance on the information that must be included in a contemporaneous written acknowledgment and the deadline for furnishing the acknowledgment to the donor. How to amend your taxes Any donee organization that provides a contemporaneous written acknowledgment to a donor is required to report to the IRS the information contained in the acknowledgment. How to amend your taxes The report is due by February 28 (March 31 if filing electronically) of the year following the year in which the donee organization provides the acknowledgment to the donor. How to amend your taxes The organization must file the report on Copy A of Form 1098-C. How to amend your taxes An organization that files Form 1098-C on paper should send it with Form 1096, Annual Summary and Transmittal of U. How to amend your taxes S. How to amend your taxes Information Returns. How to amend your taxes See the Instructions for Form 1096 for the correct filing location. How to amend your taxes An organization that is required to file 250 or more Forms 1098-C during the calendar year must file the forms electronically or magnetically. How to amend your taxes Specifications for filing Form 1098-C electronically or magnetically can be found in Publication 1220, Specifications for Filing Forms 1097, 1098, 1099, 3921, 3922, 5498, 8935, and W-2G Electronically at www. How to amend your taxes IRS. How to amend your taxes gov/pub/irs-pdf/p1220. How to amend your taxes pdf. How to amend your taxes Acknowledgment For a contribution of a qualified vehicle with a claimed value of $500 or less, do not file Form 1098-C. How to amend your taxes However, you can use it as the contemporaneous written acknowledgment under section 170(f)(8) by providing the donor with Copy C only. How to amend your taxes See the Instructions for Form 1098-C. How to amend your taxes Generally, the organization should complete Form 1098-C as the written acknowledgment to the donor and the IRS. How to amend your taxes The contents of the acknowledgment depend upon whether the organization: Sells a qualified vehicle without any significant intervening use or material improvement, Intends to make a significant intervening use of or material improvement to a qualified vehicle prior to sale, or Sells a qualified vehicle to a needy individual at a price significantly below fair market value, or a gratuitous transfer to a needy individual in direct furtherance of a charitable purpose of the organization of relieving the poor and distressed or the underprivileged who are in need of a means of transportation. How to amend your taxes For more information on the acknowledgment, see Notice 2005-44, 2005-25 I. How to amend your taxes R. How to amend your taxes B. How to amend your taxes 1287, at www. How to amend your taxes irs. How to amend your taxes gov/irb/2005-25_IRB/2005-25_IRB/ar09. How to amend your taxes html. How to amend your taxes Material improvements or significant intervening use. How to amend your taxes   To constitute significant intervening use, the organization must actually use the vehicle to substantially further the organization's regularly conducted activities, and the use must be significant, not incidental. How to amend your taxes Factors in determining whether a use is a significant intervening use depend on the nature, extent, frequency, and duration. How to amend your taxes For this purpose, use includes providing transportation on a regular basis for a significant period of time or significant use directly related to training in vehicle repair. How to amend your taxes Use does not include the use of a vehicle to provide training in business skills, such as marketing or sales. How to amend your taxes Examples of significant use include: Driving a vehicle every day for 1 year to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. How to amend your taxes Driving a vehicle for 10,000 miles over a 1-year period to deliver meals to needy individuals, if delivering meals is an activity regularly conducted by the organization. How to amend your taxes   Material improvements include major repairs and additions that improve the condition of the vehicle in a manner that significantly increases the value. How to amend your taxes To be a material improvement, the improvement cannot be funded by an additional payment to the organization from the donor of the vehicle. How to amend your taxes Material improvements do not include cleaning, minor repairs, routine maintenance, painting, removal of dents or scratches, cleaning or repair of upholstery, and installation of theft deterrent devices. How to amend your taxes Penalties. How to amend your taxes   If your charitable organization receives contributions of used motor vehicles, boats, and airplanes valued over $500 it may be subject to a penalty if it knowingly: Fails to furnish an acknowledgement in a timely manner, showing the required information, or Furnishes a false or fraudulent acknowledgement of the contribution. How to amend your taxes    Other penalties may apply. How to amend your taxes See Part O in the 2012 General Instructions for Certain Information Returns. How to amend your taxes   An acknowledgment containing a certification will be presumed to be false or fraudulent if the qualified vehicle is sold to a buyer other than a needy individual without a significant intervening use or material improvement within 6 months of the date of the contribution. How to amend your taxes   If a charity sells a donated vehicle at auction, the IRS will not accept as substantiation an acknowledgment from the charity stating that the vehicle is to be transferred to a needy individual for significantly below fair market value. How to amend your taxes Vehicles sold at auction are not sold at prices significantly below fair market value, and the IRS will not treat vehicles sold at auction as qualifying for this exception. How to amend your taxes   The penalty for a false or fraudulent acknowledgment where the donee certifies that the vehicle will not be transferred for money, other property, or services before completion of material improvements or significant intervening use or the donee certifies that the vehicle is to be transferred to a needy individual for significantly below fair market value in furtherance of the donee's charitable purpose is the larger of $5,000 or the claimed value of the vehicle multiplied by 39. How to amend your taxes 6%. How to amend your taxes   The penalty for an acknowledgment relating to a qualified vehicle being sold in an arm's length transaction to an unrelated party is the larger of the gross proceeds from the sale or the sales price stated in the acknowledgment multiplied by 39. How to amend your taxes 6%. How to amend your taxes Qualified Intellectual Property A taxpayer who contributes qualified intellectual property to a charity may be entitled to a charitable deduction, in addition to any initial deduction allowed in the year of contribution. How to amend your taxes The additional deduction is based on a specified percentage of the qualified donee income with respect to the qualified intellectual property. How to amend your taxes To qualify for the additional charitable deduction, the donor must provide notice to the donee at the time of the contribution that the donor intends to treat the contribution as qualified intellectual property contribution for purposes of sections 170(m) and 6050L. How to amend your taxes Every donee organization described in section 170(c) (except a private foundation as defined in section 509(a) that is not described in section 170(b)(1)(F)) that receives or accrues net income from a charitable gift of qualified intellectual property must file Form 8899. How to amend your taxes Form 8899. How to amend your taxes   Form 8899, Notice of Income From Donated Intellectual Property, is used by a donee to report net income from qualified intellectual property to the donor of the property and to the IRS and is due by the last day of the first full month following the close of the donee’s tax year. How to amend your taxes This form must be filed for each tax year of the donee in which the donated property produces net income, but only if all or part of that tax year occurs during the 10-year period beginning on the date of the contribution and that tax year does not begin after the expiration of the legal life of the donated property. How to amend your taxes Qualified donee income. How to amend your taxes   Qualified donee income is any net income received by or accrued to the donee that is properly allocable to the qualified intellectual property for the tax year of the donee which ends within or with the tax year of the donor. How to amend your taxes Income is not treated as allocated to qualified intellectual property if it is received or accrued after the earlier of the expiration of the legal life of the qualified intellectual property, or the 10-year period beginning with the date of