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How To Do Your Taxes

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How To Do Your Taxes

How to do your taxes 2. How to do your taxes   Employees' Pay Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Tests for Deducting PayTest 1—Reasonableness Test 2—For Services Performed Kinds of PayAwards Bonuses Education Expenses Fringe Benefits Loans or Advances Property Reimbursements for Business Expenses Sick and Vacation Pay Introduction You can generally deduct the amount you pay your employees for the services they perform. How to do your taxes The pay may be in cash, property, or services. How to do your taxes It may include wages, salaries, bonuses, commissions, or other non-cash compensation such as vacation allowances and fringe benefits. How to do your taxes For information about deducting employment taxes, see chapter 5. How to do your taxes You can claim employment credits, such as the following, if you hire individuals who meet certain requirements. How to do your taxes Empowerment zone employment credit (Form 8844). How to do your taxes Indian employment credit (Form 8845). How to do your taxes Work opportunity credit (Form 5884). How to do your taxes Credit for employer differential wage payments (Form 8932). How to do your taxes Reduce your deduction for employee wages by the amount of employment credits you claim. How to do your taxes For more information about these credits, see the form on which the credit is claimed. How to do your taxes Topics - This chapter discusses: Tests for deducting pay Kinds of pay 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 See chapter 12 for information about getting publications and forms. How to do your taxes Tests for Deducting Pay To be deductible, your employees' pay must be an ordinary and necessary business expense and you must pay or incur it. How to do your taxes These and other requirements that apply to all business expenses are explained in chapter 1. How to do your taxes In addition, the pay must meet both of the following tests. How to do your taxes Test 1. How to do your taxes It must be reasonable. How to do your taxes Test 2. How to do your taxes It must be for services performed. How to do your taxes The form or method of figuring the pay does not affect its deductibility. How to do your taxes For example, bonuses and commissions based on sales or earnings, and paid under an agreement made before the services were performed, are both deductible. How to do your taxes Test 1—Reasonableness You must be able to prove that the pay is reasonable. How to do your taxes Whether the pay is reasonable depends on the circumstances that existed when you contracted for the services, not those that exist when reasonableness is questioned. How to do your taxes If the pay is excessive, the excess pay is disallowed as a deduction. How to do your taxes Factors to consider. How to do your taxes   Determine the reasonableness of pay by the facts and circumstances. How to do your taxes Generally, reasonable pay is the amount that a similar business would pay for the same or similar services. How to do your taxes   To determine if pay is reasonable, also consider the following items and any other pertinent facts. How to do your taxes The duties performed by the employee. How to do your taxes The volume of business handled. How to do your taxes The character and amount of responsibility. How to do your taxes The complexities of your business. How to do your taxes The amount of time required. How to do your taxes The cost of living in the locality. How to do your taxes The ability and achievements of the individual employee performing the service. How to do your taxes The pay compared with the gross and net income of the business, as well as with distributions to shareholders if the business is a corporation. How to do your taxes Your policy regarding pay for all your employees. How to do your taxes The history of pay for each employee. How to do your taxes Test 2—For Services Performed You must be able to prove the payment was made for services actually performed. How to do your taxes Employee-shareholder salaries. How to do your taxes   If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed, the excessive part of the salary may be treated as a constructive dividend to the employee-shareholder. How to do your taxes The excessive part of the salary would not be allowed as a salary deduction by the corporation. How to do your taxes For more information on corporate distributions to shareholders, see Publication 542, Corporations. How to do your taxes Kinds of Pay Some of the ways you may provide pay to your employees in addition to regular wages or salaries are discussed next. How to do your taxes For specialized and detailed information on employees' pay and the employment tax treatment of employees' pay, see Publications 15, 15-A, and 15-B. How to do your taxes Awards You can generally deduct amounts you pay to your employees as awards, whether paid in cash or property. How to do your taxes If you give property to an employee as an employee achievement award, your deduction may be limited. How to do your taxes Achievement awards. How to do your taxes   An achievement award is an item of tangible personal property that meets all the following requirements. How to do your taxes It is given to an employee for length of service or safety achievement. How to do your taxes It is awarded as part of a meaningful presentation. How to do your taxes It is awarded under conditions and circumstances that do not create a significant likelihood of disguised pay. How to do your taxes Length-of-service award. How to do your taxes    An award will qualify as a length-of-service award only if either of the following applies. How to do your taxes The employee receives the award after his or her first 5 years of employment. How to do your taxes The employee did not receive another length-of-service award (other than one of very small value) during the same year or in any of the prior 4 years. How to do your taxes Safety achievement award. How to do your taxes    An award for safety achievement will qualify as an achievement award unless one of the following applies. How to do your taxes It is given to a manager, administrator, clerical employee, or other professional employee. How to do your taxes During the tax year, more than 10% of your employees, excluding those listed in (1), have already received a safety achievement award (other than one of very small value). How to do your taxes Deduction limit. How to do your taxes   Your deduction for the cost of employee achievement awards given to any one employee during the tax year is limited to the following. How to do your taxes $400 for awards that are not qualified plan awards. How to do your taxes $1,600 for all awards, whether or not qualified plan awards. How to do your taxes   A qualified plan award is an achievement award given as part of an established written plan or program that does not favor highly compensated employees as to eligibility or benefits. How to do your taxes   A highly compensated employee is an employee who meets either of the following tests. How to do your taxes The employee was a 5% owner at any time during the year or the preceding year. How to do your taxes The employee received more than $115,000 in pay for the preceding year. How to do your taxes You can choose to ignore test (2) if the employee was not also in the top 20% of employees ranked by pay for the preceding year. How to do your taxes   An award is not a qualified plan award if the average cost of all the employee achievement awards given during the tax year (that would be qualified plan awards except for this limit) is more than $400. How to do your taxes To figure this average cost, ignore awards of nominal value. How to do your taxes Deduct achievement awards as a nonwage business expense on your return or business schedule. How to do your taxes You may not owe employment taxes on the value of some achievement awards you provide to an employee. How to do your taxes See Publication 15-B. How to do your taxes Bonuses You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services, not as a gift, and the services were performed. How to do your taxes However, the total bonuses, salaries, and other pay must be reasonable for the services performed. How to do your taxes If the bonus is paid in property, see Property , later. How to do your taxes Gifts of nominal value. How to do your taxes    If, to promote employee goodwill, you distribute food or merchandise of nominal value to your employees at holidays, you can deduct the cost of these items as a nonwage business expense. How to do your taxes Your deduction for de minimis gifts of food or drink are not subject to the 50% deduction limit that generally applies to meals. How to do your taxes For more information on this deduction limit, see Meals and lodging , later. How to do your taxes Education Expenses If you pay or reimburse education expenses for an employee, you can deduct the payments if they are part of a qualified educational assistance program. How to do your taxes Deduct them on the “Employee benefit programs” or other appropriate line of your tax return. How to do your taxes For information on educational assistance programs, see Educational Assistance in section 2 of Publication 15-B. How to do your taxes Fringe Benefits A fringe benefit is a form of pay for the performance of services. How to do your taxes You can generally deduct the cost of fringe benefits. How to do your taxes You may be able to exclude all or part of the value of some fringe benefits from your employees' pay. How to do your taxes You also may not owe employment taxes on the value of the fringe benefits. How to do your taxes See Table 2-1, Special Rules for Various Types of Fringe Benefits, in Publication 15-B for details. How to do your taxes Your deduction for the cost of fringe benefits for activities generally considered entertainment, amusement, or recreation, or for a facility used in connection with such an activity (for example, a company aircraft) for certain officers, directors, and more-than-10% shareholders is limited. How to do your taxes Certain fringe benefits are discussed next. How to do your taxes See Publication 15-B for more details on these and other fringe benefits. How to do your taxes Meals and lodging. How to do your taxes   You can usually deduct the cost of furnishing meals and lodging to your employees. How to do your taxes Deduct the cost in whatever category the expense falls. How to do your taxes For example, if you operate a restaurant, deduct the cost of the meals you furnish to employees as part of the cost of goods sold. How to do your taxes If you operate a nursing home, motel, or rental property, deduct the cost of furnishing lodging to an employee as expenses for utilities, linen service, salaries, depreciation, etc. How to do your taxes Deduction limit on meals. How to do your taxes   You can generally deduct only 50% of the cost of furnishing meals to your employees. How to do your taxes However, you can deduct the full cost of the following meals. How to do your taxes Meals whose value you include in an employee's wages. How to do your taxes Meals that qualify as a de minimis fringe benefit as discussed in section 2 of Publication 15-B. How to do your taxes This generally includes meals you furnish to employees at your place of business if more than half of these employees are provided the meals for your convenience. How to do your taxes Meals you furnish to your employees at the work site when you operate a restaurant or catering service. How to do your taxes Meals you furnish to your employees as part of the expense of providing recreational or social activities, such as a company picnic. How to do your taxes Meals you are required by federal law to furnish to crew members of certain commercial vessels (or would be required to furnish if the vessels were operated at sea). How to do your taxes This does not include meals you furnish on vessels primarily providing luxury water transportation. How to do your taxes Meals you furnish on an oil or gas platform or drilling rig located offshore or in Alaska. How to do your taxes This includes meals you furnish at a support camp that is near and integral to an oil or gas drilling rig located in Alaska. How to do your taxes Employee benefit programs. How to do your taxes   Employee benefit programs include the following. How to do your taxes Accident and health plans. How to do your taxes Adoption assistance. How to do your taxes Cafeteria plans. How to do your taxes Dependent care assistance. How to do your taxes Education assistance. How to do your taxes Life insurance coverage. How to do your taxes Welfare benefit funds. How to do your taxes   You can generally deduct amounts you spend on employee benefit programs on the applicable line of your tax return. How to do your taxes For example, if you provide dependent care by operating a dependent care facility for your employees, deduct your costs in whatever categories they fall (utilities, salaries, etc. How to do your taxes ). How to do your taxes Life insurance coverage. How to do your taxes   You cannot deduct the cost of life insurance coverage for you, an employee, or any person with a financial interest in your business, if you are directly or indirectly the beneficiary of the policy. How to do your taxes See Regulations section 1. How to do your taxes 264-1 for more information. How to do your taxes Welfare benefit funds. How to do your taxes   A welfare benefit fund is a funded plan (or a funded arrangement having the effect of a plan) that provides welfare benefits to your employees, independent contractors, or their beneficiaries. How to do your taxes Welfare benefits are any benefits other than deferred compensation or transfers of restricted property. How to do your taxes   Your deduction for contributions to a welfare benefit fund is limited to the fund's qualified cost for the tax year. How to do your taxes If your contributions to the fund are more than its qualified cost, carry the excess over to the next tax year. How to do your taxes   Generally, the fund's “qualified cost” is the total of the following amounts, reduced by the after-tax income of the fund. How to do your taxes The cost you would have been able to deduct using the cash method of accounting if you had paid for the benefits directly. How to do your taxes The contributions added to a reserve account that are needed to fund claims incurred but not paid as of the end of the year. How to do your taxes These claims can be for supplemental unemployment benefits, severance pay, or disability, medical, or life insurance benefits. How to do your taxes   For more information, see sections 419(c) and 419A of the Internal Revenue Code and the related regulations. How to do your taxes Loans or Advances You generally can deduct as wages an advance you make to an employee for services performed if you do not expect the employee to repay the advance. How to do your taxes However, if the employee performs no services, treat the amount you advanced as a loan. How to do your taxes If the employee does not repay the loan, treat it as income to the employee. How to do your taxes Below-market interest rate loans. How to do your taxes   On certain loans you make to an employee or shareholder, you are treated as having received interest income and as having paid compensation or dividends equal to that interest. How to do your taxes See Below-Market Loans in chapter 4. How to do your taxes Property If you transfer property (including your company's stock) to an employee as payment for services, you can generally deduct it as wages. How to do your taxes The amount you can deduct is the property's fair market value on the date of the transfer less any amount the employee paid for the property. How to do your taxes You can claim the deduction only for the tax year in which your employee includes the property's value in income. How to do your taxes Your employee is deemed to have included the value in income if you report it on Form W-2, Wage and Tax Statement, in a timely manner. How to do your taxes You treat the deductible amount as received in exchange for the property, and you must recognize any gain or loss realized on the transfer, unless it is the company's stock transferred as payment for services. How to do your taxes Your gain or loss is the difference between the fair market value of the property and its adjusted basis on the date of transfer. How to do your taxes These rules also apply to property transferred to an independent contractor for services, generally reported on Form 1099-MISC, Miscellaneous Income. How to do your taxes Restricted property. How to do your taxes   If the property you transfer for services is subject to restrictions that affect its value, you generally cannot deduct it and do not report gain or loss until it is substantially vested in the recipient. How to do your taxes However, if the recipient pays for the property, you must report any gain at the time of the transfer up to the amount paid. How to do your taxes    “Substantially vested” means the property is not subject to a substantial risk of forfeiture. How to do your taxes This means that the recipient is not likely to have to give up his or her rights in the property in the future. How to do your taxes Reimbursements for Business Expenses You can generally deduct the amount you pay or reimburse employees for business expenses incurred for your business. How to do your taxes However, your deduction may be limited. How to do your taxes If you make the payment under an accountable plan, deduct it in the category of the expense paid. How to do your taxes For example, if you pay an employee for travel expenses incurred on your behalf, deduct this payment as a travel expense. How to do your taxes If you make the payment under a nonaccountable plan, deduct it as wages and include it in the employee's Form W-2. How to do your taxes See Reimbursement of Travel, Meals, and Entertainment in chapter 11 for more information about deducting reimbursements and an explanation of accountable and nonaccountable plans. How to do your taxes Sick and Vacation Pay Sick pay. How to do your taxes   You can deduct amounts you pay to your employees for sickness and injury, including lump-sum amounts, as wages. How to do your taxes However, your deduction is limited to amounts not compensated by insurance or other means. How to do your taxes Vacation pay. How to do your taxes   Vacation pay is an employee benefit. How to do your taxes It includes amounts paid for unused vacation leave. How to do your taxes You can deduct vacation pay only in the tax year in which the employee actually receives it. How to do your taxes This rule applies regardless of whether you use the cash or accrual method of accounting. How to do your taxes Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Freedom and Noble Wildfires in Oklahoma

OK-2012-09, Aug. 23, 2012

Updated 9/27/2012 to include Noble Wildfire and include Cleveland County.

OKLAHOMA CITY — Victims of the Freedom and Noble Wildfires that began on Aug. 3, 2012, in parts of Oklahoma may qualify for tax relief from the Internal Revenue Service.

The President has declared Creek and Cleveland counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 3, and on or before Oct. 2, have been postponed to Oct. 2, 2012. This includes the quarterly estimated tax payment due on Sept. 17, 2012.

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 3, and on or before Aug. 20, as long as the deposits are made by Aug. 20, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and is entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 2 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 3 and on or before Oct. 2.

The IRS also gives affected taxpayers until Oct. 2 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 3 and on or before Oct. 2.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 3 and on or before Aug. 20 provided the taxpayer makes these deposits by Aug. 20.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “OKLAHOMA/FREEDOM WILDFIRE” or "OKLAHOMA/NOBLE WILDFIRE" at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, IRS.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Page Last Reviewed or Updated: 14-Aug-2013

The How To Do Your Taxes

How to do your taxes 11. How to do your taxes   Your Rights as a Taxpayer Table of Contents Declaration of Taxpayer Rights Examinations, Appeals, Collections, and RefundsBy mail. How to do your taxes By interview. How to do your taxes Repeat examinations. How to do your taxes The first part of this chapter explains some of your most important rights as a taxpayer. How to do your taxes The second part explains the examination, appeal, collection, and refund processes. How to do your taxes Declaration of Taxpayer Rights Protection of your rights. How to do your taxes   IRS employees will explain and protect your rights as a taxpayer throughout your contact with us. How to do your taxes Privacy and confidentiality. How to do your taxes   The IRS will not disclose to anyone the information you give us, except as authorized by law. How to do your taxes You have the right to know why we are asking you for information, how we will use it, and what happens if you do not provide requested information. How to do your taxes Professional and courteous service. How to do your taxes   If you believe that an IRS employee has not treated you in a professional, fair, and courteous manner, you should tell that employee's supervisor. How to do your taxes If the supervisor's response is not satisfactory, you should write to the IRS director for your area or the center where you file your return. How to do your taxes Representation. How to do your taxes   You can either represent yourself or, with proper written authorization, have someone else represent you in your place. How to do your taxes Your representative must be a person allowed to practice before the IRS, such as an attorney, certified public accountant, or enrolled agent. How to do your taxes If you are in an interview and ask to consult such a person, then we must stop and reschedule the interview in most cases. How to do your taxes   You can have someone accompany you at an interview. How to do your taxes You can make sound recordings of any meetings with our examination, appeal, or collection personnel, provided you tell us in writing 10 days before the meeting. How to do your taxes Payment of only the correct amount of tax. How to do your taxes   You are responsible for paying only the correct amount of tax due under the law—no more, no less. How to do your taxes If you cannot pay all of your tax when it is due, you may be able to make monthly installment payments. How to do your taxes Help with unresolved tax problems. How to do your taxes   The Taxpayer Advocate Service can help you if you have tried unsuccessfully to resolve a problem with the IRS. How to do your taxes Your local Taxpayer Advocate can offer you special help if you have a significant hardship as a result of a tax problem. How to do your taxes For more information, call toll free 1-877-777-4778 (1-800-829-4059 for TTY/TDD) or write to the Taxpayer Advocate at the IRS office that last contacted you. How to do your taxes Appeals and judicial review. How to do your taxes   If you disagree with us about the amount of your tax liability or certain collection actions, you have the right to ask the Appeals Office to review your case. How to do your taxes You can also ask a court to review your case. How to do your taxes Relief from certain penalties and interest. How to do your taxes   The IRS will waive penalties when allowed by law if you can show you acted reasonably and in good faith or relied on the incorrect advice of an IRS employee. How to do your taxes We will waive interest that is the result of certain errors or delays caused by an IRS employee. How to do your taxes Examinations, Appeals, Collections, and Refunds Examinations (audits). How to do your taxes   We accept most taxpayers' returns as filed. How to do your taxes If we inquire about your return or select it for examination, it does not suggest that you are dishonest. How to do your taxes The inquiry or examination may or may not result in more tax. How to do your taxes We may close your case without change; or, you may receive a refund. How to do your taxes   The process of selecting a return for examination usually begins in one of two ways. How to do your taxes First, we use computer programs to identify returns that may have incorrect amounts. How to do your taxes These programs may be based on information returns, such as Forms 1099 and W-2, on studies of past examinations, or on certain issues identified by compliance projects. How to do your taxes Second, we use information from outside sources that indicates that a return may have incorrect amounts. How to do your taxes These sources may include newspapers, public records, and individuals. How to do your taxes If we determine that the information is accurate and reliable, we may use it to select a return for examination. How to do your taxes   Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, explains the rules and procedures that we follow in examinations. How to do your taxes The following sections give an overview of how we conduct examinations. How to do your taxes By mail. How to do your taxes   We handle many examinations and inquiries by mail. How to do your taxes We will send you a letter with either a request for more information or a reason why we believe a change to your return may be needed. How to do your taxes You can respond by mail or you can request a personal interview with an examiner. How to do your taxes If you mail us the requested information or provide an explanation, we may or may not agree with you, and we will explain the reasons for any changes. How to do your taxes Please do not hesitate to write to us about anything you do not understand. How to do your taxes By interview. How to do your taxes   If we notify you that we will conduct your examination through a personal interview, or you request such an interview, you have the right to ask that the examination take place at a reasonable time and place that is convenient for both you and the IRS. How to do your taxes If our examiner proposes any changes to your return, he or she will explain the reasons for the changes. How to do your taxes If you do not agree with these changes, you can meet with the examiner's supervisor. How to do your taxes Repeat examinations. How to do your taxes   If we examined your return for the same items in either of the 2 previous years and proposed no change to your tax liability, please contact us as soon as possible so we can see if we should discontinue the examination. How to do your taxes Appeals. How to do your taxes   If you do not agree with the examiner's proposed changes, you can appeal them to the Appeals Office of the IRS. How to do your taxes Most differences can be settled without expensive and time-consuming court trials. How to do your taxes Your appeal rights are explained in detail in both Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, and Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund. How to do your taxes   If you do not wish to use the Appeals Office or disagree with its findings, you may be able to take your case to the U. How to do your taxes S. How to do your taxes Tax Court, U. How to do your taxes S. How to do your taxes Court of Federal Claims, or the U. How to do your taxes S. How to do your taxes District Court where you live. How to do your taxes If you take your case to court, the IRS will have the burden of proving certain facts if you kept adequate records to show your tax liability, cooperated with the IRS, and meet certain other conditions. How to do your taxes If the court agrees with you on most issues in your case and finds that our position was largely unjustified, you may be able to recover some of your administrative and litigation costs. How to do your taxes You will not be eligible to recover these costs unless you tried to resolve your case administratively, including going through the appeals system, and you gave us the information necessary to resolve the case. How to do your taxes Collections. How to do your taxes   Publication 594, The IRS Collection Process, explains your rights and responsibilities regarding payment of federal taxes. How to do your taxes It describes: What to do when you owe taxes. How to do your taxes It describes what to do if you get a tax bill and what to do if you think your bill is wrong. How to do your taxes It also covers making installment payments, delaying collection action, and submitting an offer in compromise. How to do your taxes IRS collection actions. How to do your taxes It covers liens, releasing a lien, levies, releasing a levy, seizures and sales, and release of property. How to do your taxes   Your collection appeal rights are explained in detail in Publication 1660, Collection Appeal Rights. How to do your taxes Innocent spouse relief. How to do your taxes   Generally, both you and your spouse are responsible, jointly and individually, for paying the full amount of any tax, interest, or penalties due on your joint return. How to do your taxes To seek relief from any liability related to your spouse (or former spouse), you must file a claim on Form 8857, Request for Innocent Spouse Relief. How to do your taxes In some cases, Form 8857 may need to be filed within 2 years of the date on which the IRS first attempted to collect the tax from you. How to do your taxes Do not file Form 8857 with your Form 1040. How to do your taxes For more information, see Publication 971, Innocent Spouse Relief, and Form 8857 or you can call the Innocent Spouse office toll-free at 1-855-851-2009. How to do your taxes Refunds. How to do your taxes   You can file a claim for refund if you think you paid too much tax. How to do your taxes You must generally file the claim within 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. How to do your taxes The law generally provides for interest on your refund if it is not paid within 45 days of the date you filed your return or claim for refund. How to do your taxes Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund, has more information on refunds. How to do your taxes   If you were due a refund but you did not file a return, you must file within 3 years from the date the return was due (including extensions) to get that refund. How to do your taxes Prev  Up  Next   Home   More Online Publications