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My turbotax Publication 1544 - Main Content Table of Contents Why Report These Payments? Who Must File Form 8300?What Payments Must Be Reported? What Is Cash? Taxpayer Identification Number (TIN) What Is a Related Transaction? What About Suspicious Transactions? When, Where, and What To File Examples Penalties How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). My turbotax Why Report These Payments? Drug dealers and smugglers often use large cash payments to “launder” money from illegal activities. My turbotax Laundering means converting “dirty” or illegally-gained money to “clean” money. My turbotax The government can often trace this laundered money through the payments you report. My turbotax Laws passed by Congress require you to report these payments. My turbotax Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities. My turbotax The USA PATRIOT Act of 2001 increased the scope of these laws to help trace funds used for terrorism. My turbotax Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. My turbotax For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. My turbotax Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. My turbotax However, you do not have to file Form 8300 if the transaction is not related to your trade or business. My turbotax For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. My turbotax Transaction defined. My turbotax    A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. My turbotax Person defined. My turbotax   A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. My turbotax   Exempt organizations, including employee plans, are also “persons. My turbotax ” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. My turbotax Foreign transactions. My turbotax   You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. My turbotax However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. My turbotax Bail received by court clerks. My turbotax   Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: Any federal offense involving a controlled substance, Racketeering, Money laundering, and Any state offense substantially similar to (1), (2), or (3) above. My turbotax For more information about the rules that apply to court clerks, see Section 1. My turbotax 6050I-2 of the Income Tax Regulations. My turbotax What Payments Must Be Reported? You must file Form 8300 to report cash paid to you if it is: Over $10,000, Received as: One lump sum of over $10,000, Installment payments that cause the total cash received within 1 year of the initial payment to total more than $10,000, or Other previously unreportable payments that cause the total cash received within a 12-month period to total more than $10,000, Received in the course of your trade or business, Received from the same buyer (or agent), and Received in a single transaction or in related transactions (defined later). My turbotax What Is Cash? Cash is: The coins and currency of the United States (and any other country), and A cashier's check, bank draft, traveler's check, or money order you receive, if it has a face amount of $10,000 or less and you receive it in: A designated reporting transaction (defined later), or Any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300. My turbotax Cash may include a cashier's check even if it is called a “treasurer's check” or “bank check. My turbotax ” Cash does not include a check drawn on an individual's personal account. My turbotax A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. My turbotax These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Form 104. My turbotax Example 1. My turbotax You are a coin dealer. My turbotax Bob Green buys gold coins from you for $13,200. My turbotax He pays for them with $6,200 in U. My turbotax S. My turbotax currency and a cashier's check having a face amount of $7,000. My turbotax The cashier's check is treated as cash. My turbotax You have received more than $10,000 cash and must file Form 8300 for this transaction. My turbotax Example 2. My turbotax You are a retail jeweler. My turbotax Mary North buys an item of jewelry from you for $12,000. My turbotax She pays for it with a personal check payable to you in the amount of $9,600 and traveler's checks totaling $2,400. My turbotax Because the personal check is not treated as cash, you have not received more than $10,000 cash in the transaction. My turbotax You do not have to file Form 8300. My turbotax Example 3. My turbotax You are a boat dealer. My turbotax Emily Jones buys a boat from you for $16,500. My turbotax She pays for it with a cashier's check payable to you in the amount of $16,500. My turbotax The cashier's check is not treated as cash because its face amount is more than $10,000. My turbotax You do not have to file Form 8300 for this transaction. My turbotax Designated Reporting Transaction A designated reporting transaction is the retail sale of any of the following: A consumer durable, such as an automobile or boat. My turbotax A consumer durable is property, other than land or buildings, that: Is suitable for personal use, Can reasonably be expected to last at least 1 year under ordinary use, Has a sales price of more than $10,000, and Can be seen or touched (tangible property). My turbotax For example, a $20,000 car is a consumer durable, but a $20,000 dump truck or factory machine is not. My turbotax The car is a consumer durable even if you sell it to a buyer who will use it in a business. My turbotax A collectible (for example, a work of art, rug, antique, metal, gem, stamp, or coin). My turbotax Travel or entertainment, if the total sales price of all items sold for the same trip or entertainment event in one transaction (or related transactions) is more than $10,000. My turbotax To figure the total sales price of all items sold for a trip or entertainment event, you include the sales price of items such as airfare, hotel rooms, and admission tickets. My turbotax Example. My turbotax You are a travel agent. My turbotax Ed Johnson asks you to charter a passenger airplane to take a group to a sports event in another city. My turbotax He also asks you to book hotel rooms and admission tickets for the group. My turbotax In payment, he gives you two money orders, each for $6,000. My turbotax You have received more than $10,000 cash in this designated reporting transaction. My turbotax You must file Form 8300. My turbotax Retail sale. My turbotax   The term “retail sale” means any sale made in the course of a trade or business that consists mainly of making sales to ultimate consumers. My turbotax   Thus, if your business consists mainly of making sales to ultimate consumers, all sales you make in the course of that business are retail sales. My turbotax This includes any sales of items that will be resold. My turbotax Broker or intermediary. My turbotax   A designated reporting transaction includes the retail sale of items (1), (2), or (3) of the preceding list, even if the funds are received by a broker or other intermediary, rather than directly by the seller. My turbotax Exceptions to Definition of Cash A cashier's check, bank draft, traveler's check, or money order you received in a designated reporting transaction is not treated as cash if one of the following exceptions applies. My turbotax Exception for certain bank loans. My turbotax   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is the proceeds from a bank loan. My turbotax As proof that it is from a bank loan, you may rely on a copy of the loan document, a written statement or lien instruction from the bank, or similar proof. My turbotax Example. My turbotax You are a car dealer. My turbotax Mandy White buys a new car from you for $11,500. My turbotax She pays you with $2,000 of U. My turbotax S. My turbotax currency and a cashier's check for $9,500 payable to you and her. My turbotax You can tell that the cashier's check is the proceeds of a bank loan because it includes instructions to you to have a lien put on the car as security for the loan. My turbotax For this reason, the cashier's check is not treated as cash. My turbotax You do not have to file Form 8300 for the transaction. My turbotax Exception for certain installment sales. My turbotax   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if it is received in payment on a promissory note or an installment sales contract (including a lease that is considered a sale for federal tax purposes). My turbotax However, this exception applies only if: You use similar notes or contracts in other sales to ultimate consumers in the ordinary course of your trade or business, and The total payments for the sale that you receive on or before the 60th day after the sale are 50% or less of the purchase price. My turbotax Exception for certain down payment plans. My turbotax   A cashier's check, bank draft, traveler's check, or money order is not treated as cash if you received it in payment for a consumer durable or collectible, and all three of the following statements are true. My turbotax You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the date of sale. My turbotax You receive it more than 60 days before the date of sale. My turbotax You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. My turbotax Exception for travel and entertainment. My turbotax   A cashier's check, bank draft, traveler's check, or money order received for travel or entertainment is not treated as cash if all three of the following statements are true. My turbotax You receive it under a payment plan requiring: One or more down payments, and Payment of the rest of the purchase price by the earliest date that any travel or entertainment item (such as airfare) is furnished for the trip or entertainment event. My turbotax You receive it more than 60 days before the date on which the final payment is due. My turbotax You use payment plans with the same or substantially similar terms when selling to ultimate consumers in the ordinary course of your trade or business. My turbotax Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. My turbotax If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. My turbotax If you do not know a person's TIN, you have to ask for it. My turbotax You may be subject to penalties for an incorrect or missing TIN. My turbotax There are three types of TINs. My turbotax The TIN for an individual, including a sole proprietor, is the individual's social security number (SSN). My turbotax The TIN for a nonresident alien individual who needs a TIN but is not eligible to get an SSN is an IRS individual taxpayer identification number (ITIN). My turbotax An ITIN has nine digits, similar to an SSN. My turbotax The TIN for other persons, including corporations, partnerships, and estates, is the employer identification number (EIN). My turbotax Exception. My turbotax   You are not required to provide the TIN of a person who is a nonresident alien individual or a foreign organization if that person or foreign organization: Does not have income effectively connected with the conduct of a U. My turbotax S. My turbotax trade or business; Does not have an office or place of business, or a fiscal or paying agent in the United States; Does not file a federal tax return; Does not furnish a withholding certificate described in §1. My turbotax 1441-1(e)(2) or (3) or 1. My turbotax 1441-5(c)(2)(iv) or (3)(iii) to the extent required under 1. My turbotax 1441-1(e)(4)(vii); Does not have to furnish a TIN on any return, statement, or other document as required by the income tax regulations under section 897 or 1445; or In the case of a nonresident alien individual, the individual has not chosen to file a joint federal income tax return with a spouse who is a U. My turbotax S. My turbotax citizen or resident. My turbotax What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. My turbotax If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. My turbotax For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. My turbotax Because they total $12,000 (more than $10,000), you must file Form 8300. My turbotax More than 24 hours between transactions. My turbotax   Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. My turbotax   For example, you are a travel agent. My turbotax A client pays you $8,000 in cash for a trip. My turbotax Two days later, the same client pays you $3,000 more in cash to include another person on the trip. My turbotax These are related transactions, and you must file Form 8300 to report them. My turbotax What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious. My turbotax A transaction is suspicious if it appears that a person is trying to cause you not to file Form 8300 or is trying to cause you to file a false or incomplete Form 8300, or if there is a sign of possible illegal activity. My turbotax If you are suspicious, you are encouraged to call the local IRS Criminal Investigation Division as soon as possible. My turbotax Or, you can call the FinCEN Financial Institution Hotline toll free at 1-866-556-3974. My turbotax When, Where, and What To File The amount you receive and when you receive it determine when you must file. My turbotax Generally, you must file Form 8300 within 15 days after receiving a payment. My turbotax If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. My turbotax More than one payment. My turbotax   In some transactions, the buyer may arrange to pay you in cash installment payments. My turbotax If the first payment is more than $10,000, you must file Form 8300 within 15 days. My turbotax If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. My turbotax When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. My turbotax   After you file Form 8300, you must start a new count of cash payments received from that buyer. My turbotax If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. My turbotax You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. My turbotax   If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. My turbotax Example. My turbotax On January 10, you receive a cash payment of $11,000. My turbotax You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. My turbotax By January 25, you must file a Form 8300 for the $11,000 payment. My turbotax By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. My turbotax Amending a Report?   If you are amending a report, check box 1a at the top of Form 8300. My turbotax Complete the form in its entirety (Parts I-IV) and include the amended information. My turbotax Do not attach a copy of the original report. My turbotax Where to file. My turbotax   Mail the form to the address given in the Form 8300 instructions. My turbotax Required statement to buyer. My turbotax   You must give a written or electronic statement to each person named on any Form 8300 you must file. My turbotax You can give the statement electronically only if the recipient agrees to receive it in that format. My turbotax The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. My turbotax It must state that you are also reporting this information to the IRS. My turbotax   You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. My turbotax    You must keep a copy of every Form 8300 you file for 5 years. My turbotax Examples Example 1. My turbotax Pat Brown is the sales manager for Small Town Cars. My turbotax On January 6, 2009, Jane Smith buys a new car from Pat and pays $18,000 in cash. My turbotax Pat asks for identification from Jane to get the necessary information to complete Form 8300. My turbotax A filled-in form is shown in this publication. My turbotax Pat must mail the form to the address shown in the form's instructions by January 21, 2009. My turbotax He must also send a statement to Jane by January 31, 2010. My turbotax Example 2. My turbotax Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. My turbotax Pat would have to file a Form 8300 by February 26 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2009, is a Saturday). My turbotax Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. My turbotax However, he could report it if he felt it was a suspicious transaction. My turbotax Penalties There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. My turbotax If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: $25,000, or The amount of cash you received and were required to report (up to $100,000). My turbotax There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. My turbotax If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. My turbotax These dollar amounts are based on Section 3571 of Title 18 of the U. My turbotax S. My turbotax Code. My turbotax The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. My turbotax This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. My turbotax Structuring means breaking up a large cash transaction into small cash transactions. My turbotax How To Get Tax Help You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. My turbotax By selecting the method that is best for you, you will have quick and easy access to tax help. My turbotax Free help with your return. My turbotax   Free help in preparing your return is available nationwide from IRS-certified volunteers. My turbotax The Volunteer Income Tax Assistance (VITA) program is designed to help low-moderate income taxpayers and the Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. My turbotax Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. My turbotax To find the nearest VITA or TCE site, visit IRS. My turbotax gov or call 1-800-906-9887 or 1-800-829-1040. My turbotax   As part of the TCE program, AARP offers the Tax-Aide counseling program. My turbotax To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. My turbotax aarp. My turbotax org/money/taxaide. My turbotax   For more information on these programs, go to IRS. My turbotax gov and enter keyword “VITA” in the upper right-hand corner. My turbotax Internet. My turbotax You can access the IRS website at IRS. My turbotax gov 24 hours a day, 7 days a week to: Check the status of your 2011 refund. My turbotax Go to IRS. My turbotax gov and click on Where's My Refund. My turbotax Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. My turbotax If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). My turbotax Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. My turbotax E-file your return. My turbotax Find out about commercial tax preparation and e-file services available free to eligible taxpayers. My turbotax Download forms, including talking tax forms, instructions, and publications. My turbotax Order IRS products online. My turbotax Research your tax questions online. My turbotax Search publications online by topic or keyword. My turbotax Use the online Internal Revenue Code, regulations, or other official guidance. My turbotax View Internal Revenue Bulletins (IRBs) published in the last few years. My turbotax Figure your withholding allowances using the withholding calculator online at  www. My turbotax irs. My turbotax gov/individuals. My turbotax Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at  www. My turbotax irs. My turbotax gov/individuals. My turbotax Sign up to receive local and national tax news by email. My turbotax Get information on starting and operating a small business. My turbotax Phone. My turbotax Many services are available by phone. My turbotax   Ordering forms, instructions, and publications. My turbotax Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. My turbotax You should receive your order within 10 days. My turbotax Asking tax questions. My turbotax Call the IRS with your tax questions at 1-800-829-1040. My turbotax Solving problems. My turbotax You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. My turbotax An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. My turbotax Call your local Taxpayer Assistance Center for an appointment. My turbotax To find the number, go to www. My turbotax irs. My turbotax gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. My turbotax TTY/TDD equipment. My turbotax If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. My turbotax TeleTax topics. My turbotax Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. My turbotax Refund information. My turbotax You can check the status of your refund on the new IRS phone app. My turbotax Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. My turbotax IRS2Go is a new way to provide you with information and tools. My turbotax To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). My turbotax Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. My turbotax If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). My turbotax Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. My turbotax If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. My turbotax Other refund information. My turbotax To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. My turbotax Evaluating the quality of our telephone services. My turbotax To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. My turbotax One method is for a second IRS representative to listen in on or record random telephone calls. My turbotax Another is to ask some callers to complete a short survey at the end of the call. My turbotax Walk-in. My turbotax Many products and services are available on a walk-in basis. My turbotax   Products. My turbotax You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. My turbotax Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. My turbotax Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. My turbotax Services. My turbotax You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. My turbotax An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. My turbotax If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. My turbotax No appointment is necessary—just walk in. My turbotax If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. My turbotax A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. My turbotax If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. My turbotax All other issues will be handled without an appointment. My turbotax To find the number of your local office, go to www. My turbotax irs. My turbotax gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. My turbotax Mail. My turbotax You can send your order for forms, instructions, and publications to the address below. My turbotax You should receive a response within 10 days after your request is received. My turbotax  Internal Revenue Service 1201 N. My turbotax Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. My turbotax   The Taxpayer Advocate Service (TAS) is your voice at the IRS. My turbotax Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. My turbotax We offer free help to guide you through the often-confusing process of resolving tax problems that you haven’t been able to solve on your own. My turbotax Remember, the worst thing you can do is nothing at all. My turbotax   TAS can help if you can’t resolve your problem with the IRS and: Your problem is causing financial difficulties for you, your family, or your business. My turbotax You face (or your business is facing) an immediate threat of adverse action. My turbotax You have tried repeatedly to contact the IRS but no one has responded, or the IRS has not responded to you by the date promised. My turbotax   If you qualify for our help, we’ll do everything we can to get your problem resolved. My turbotax You will be assigned to one advocate who will be with you at every turn. My turbotax We have offices in every state, the District of Columbia, and Puerto Rico. My turbotax Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. My turbotax And our services are always free. My turbotax   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. My turbotax Our tax toolkit at www. My turbotax TaxpayerAdvocate. My turbotax irs. My turbotax gov can help you understand these rights. My turbotax   If you think TAS might be able to help you, call your local advocate, whose number is in your phone book and on our website at www. My turbotax irs. My turbotax gov/advocate. My turbotax You can also call our toll-free number at 1-877-777-4778. My turbotax   TAS also handles large-scale or systemic problems that affect many taxpayers. My turbotax If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. My turbotax irs. My turbotax gov/advocate. My turbotax Low Income Taxpayer Clinics (LITCs). My turbotax   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. My turbotax Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. My turbotax These clinics provide professional representation before the IRS or in court on audits, appeals, tax collection disputes, and other issues for free or for a small fee. My turbotax Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. My turbotax For more information and to find a clinic near you, see the LITC page on www. My turbotax irs. My turbotax gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. My turbotax This publication is also available by calling 1-800-829-3676 or at your local IRS office. My turbotax Free tax services. My turbotax   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. My turbotax Learn about free tax information from the IRS, including publications, services, and education and assistance programs. My turbotax The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. My turbotax The majority of the information and services listed in this publication are available to you free of charge. My turbotax If there is a fee associated with a resource or service, it is listed in the publication. My turbotax   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. My turbotax DVD for tax products. My turbotax You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. My turbotax Prior-year forms, instructions, and publications. My turbotax Tax Map: an electronic research tool and finding aid. My turbotax Tax law frequently asked questions. My turbotax Tax Topics from the IRS telephone response system. My turbotax Internal Revenue Code—Title 26 of the U. My turbotax S. My turbotax Code. 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My turbotax 4. My turbotax   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. My turbotax Private communication service. My turbotax Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes Excise taxes are imposed on amounts paid for certain facilities and services. My turbotax If you receive any payment on which tax is imposed, you are required to collect the tax, file returns, and pay the tax over to the government. My turbotax If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. My turbotax See chapter 14, later. My turbotax Uncollected Tax Report A separate report is required to be filed by collecting agents of communications services and air transportation taxes if the person from whom the facilities or services tax (the tax) is required to be collected (the taxpayer) refuses to pay the tax, or it is impossible for the collecting agent to collect the tax. My turbotax The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid. My turbotax Regular method taxpayers. My turbotax   For regular method taxpayers, the report must be filed by the due date of the Form 720 on which the tax would have been reported. My turbotax Alternative method taxpayers. My turbotax   For alternative method taxpayers, the report must be filed by the due date of the Form 720 that includes an adjustment to the separate account for the uncollected tax. My turbotax See Alternative method in  chapter 11. My turbotax Where to file. My turbotax    Do not file the uncollected tax report with Form 720. My turbotax Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. My turbotax  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. My turbotax Local telephone service. My turbotax   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. My turbotax Local telephone service also includes any facility or services provided in connection with this service. My turbotax The tax applies to lease payments for certain customer premises equipment (CPE) even though the lessor does not also provide access to a local telecommunications system. My turbotax Local-only service. My turbotax   Local-only service is local telephone service as described above, provided under a plan that does not include long distance telephone service or that separately states the charge for local service on the bill to customers. My turbotax Local-only service also includes any facility or services provided in connection with this service, even though these services and facilities may also be used with long-distance service. My turbotax Private communication service. My turbotax   Private communication service is not local telephone service. My turbotax Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. My turbotax However, the charge for the service must be stated separately from the charge for the basic system, and the accessory must function, in whole or in part, in connection with intercommunication among the subscriber's stations. My turbotax Teletypewriter exchange service. My turbotax   This includes access from a teletypewriter or other data station to a teletypewriter exchange system and the privilege of intercommunication by that station with most persons having teletypewriter or other data stations in the same exchange system. My turbotax Figuring the tax. My turbotax   The tax is based on the sum of all charges for local telephone service included in the bill. My turbotax However, if the bill groups individual items for billing and tax purposes, the tax is based on the sum of the individual items within that group. My turbotax The tax on the remaining items not included in any group is based on the charge for each item separately. My turbotax Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. My turbotax Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. My turbotax Nontaxable service. My turbotax   Nontaxable service means bundled service and long distance service. My turbotax Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. My turbotax Bundled service. My turbotax   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. My turbotax Bundled service includes plans that provide both local and long distance service for either a flat monthly fee or a charge that varies with the elapsed transmission time for which the service is used. My turbotax Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. My turbotax If Voice over Internet Protocol service provides both local and long distance service and the charges are not separately stated, such service is bundled service. My turbotax   The method for sending or receiving a call, such as on a landline telephone, wireless (cellular), or some other method, does not affect whether a service is local-only or bundled. My turbotax Long distance service. My turbotax   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. My turbotax Pre-paid telephone cards (PTC). My turbotax   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. My turbotax Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. My turbotax The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. My turbotax The transferee is the person liable for the tax and is eligible to request a credit or refund. My turbotax For more information, see Regulations section 49. My turbotax 4251-4. My turbotax   The holder is the person that purchases a PTC to use and not to resell. My turbotax Holders are not liable for the tax and cannot request a credit or refund. My turbotax Pre-paid cellular telephones. My turbotax   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. My turbotax The transferee is the person eligible to request the credit or refund. My turbotax Installation charges. My turbotax   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. My turbotax However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. My turbotax Answering services. My turbotax   The tax does not apply to amounts paid for a private line, an answering service, and a one-way paging or message service if they do not provide access to a local telephone system and the privilege of telephonic communication as part of the local telephone system. My turbotax Mobile radio telephone service. My turbotax   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. My turbotax Coin-operated telephones. My turbotax   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. My turbotax But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. My turbotax Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. My turbotax Telephone-operated security systems. My turbotax   The tax does not apply to amounts paid for telephones used only to originate calls to a limited number of telephone stations for security entry into a building. My turbotax In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. My turbotax News services. My turbotax   The tax on teletypewriter exchange service does not apply to charges for the following news services. My turbotax Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. My turbotax Services used exclusively in the collection or dissemination of news by a news ticker service furnishing a general news service similar to that of the public press. My turbotax This exemption applies to payments received for messages from one member of the news media to another member (or to or from their bona fide correspondents). My turbotax For the exemption to apply, the charge for these services must be billed in writing to the person paying for the service and that person must certify in writing that the services are used for an exempt purpose. My turbotax Services not exempted. My turbotax   The tax applies to amounts paid by members of the news media for local telephone service. My turbotax International organizations and the American Red Cross. My turbotax   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. My turbotax Nonprofit hospitals. My turbotax   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. My turbotax Also, the tax does not apply to amounts paid by these hospitals to provide local telephone service in the homes of their personnel who must be reached during their off-duty hours. My turbotax Nonprofit educational organizations. My turbotax   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. My turbotax A nonprofit educational organization is one that satisfies all the following requirements. My turbotax It normally maintains a regular faculty and curriculum. My turbotax It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. My turbotax It is exempt from income tax under section 501(a). My turbotax This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. My turbotax Qualified blood collector organizations. My turbotax   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. My turbotax A qualified blood collector organization is one that is: Described in section 501(c)(3) and exempt from tax under section 501(a), Primarily engaged in the activity of collecting human blood, Registered with the IRS, and Registered by the Food and Drug Administration to collect blood. My turbotax Federal, state, and local government. My turbotax   The tax does not apply to communication services provided to the government of the United States, the government of any state or its political subdivisions, the District of Columbia, or the United Nations. My turbotax Treat an Indian tribal government as a state for the exemption from the communications tax only if the services involve the exercise of an essential tribal government function. My turbotax Exemption certificate. My turbotax   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. My turbotax See Regulations section 49. My turbotax 4253-11. My turbotax File the certificate with the provider of the communication services. My turbotax An exemption certificate is not required for nontaxable services. My turbotax   The following users that are exempt from the communications tax do not have to file an annual exemption certificate after they have filed the initial certificate to claim an exemption from the communications tax. My turbotax The American National Red Cross and other international organizations. My turbotax Nonprofit hospitals. My turbotax Nonprofit educational organizations. My turbotax Qualified blood collector organizations. My turbotax State and local governments. My turbotax   The federal government does not have to file any exemption certificate. My turbotax   All other organizations must furnish exemption certificates when required. My turbotax Credits or Refunds If tax is collected and paid over for nontaxable services, or for certain services or users exempt from the communications tax, the collector or taxpayer may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. My turbotax Alternatively, the person who paid the tax may claim a refund. My turbotax For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. My turbotax Collectors. My turbotax   The collector may request a credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. My turbotax These requirements also apply to nontaxable service refunds. My turbotax Collectors using the regular method for deposits. My turbotax   Collectors using the regular method for deposits must use Form 720X to request a credit or refund if the collector has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. My turbotax Collectors using the alternative method for deposits. My turbotax   Collectors using the alternative method for deposits must adjust their separate accounts for the credit or refund if it has repaid the tax to the person from whom the tax was collected, or obtained the consent of that person to the allowance of the credit or refund. My turbotax For more information, see the Instructions for Form 720. My turbotax Air Transportation Taxes Taxes are imposed on amounts paid for: Transportation of persons by air, Use of international air travel facilities, and Transportation of property by air. My turbotax Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. My turbotax Percentage tax. My turbotax   A tax of 7. My turbotax 5% applies to amounts paid for taxable transportation of persons by air. My turbotax Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. My turbotax Mileage awards. My turbotax   The percentage tax may apply to an amount paid (in cash or in kind) to an air carrier (or any related person) for the right to provide mileage awards for, or other reductions in the cost of, any transportation of persons by air. My turbotax For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. My turbotax   Generally, the percentage tax does not apply to amounts paid for mileage awards where the mileage awards cannot, under any circumstances, be redeemed for air transportation that is subject to the tax. My turbotax Until regulations are issued, the following rules apply to mileage awards. My turbotax Amounts paid for mileage awards that cannot be redeemed for taxable transportation beginning and ending in the United States are not subject to the tax. My turbotax For this rule, mileage awards issued by a foreign air carrier are considered to be usable only on that foreign air carrier and thus not redeemable for taxable transportation beginning and ending in the United States. My turbotax Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. My turbotax Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are not subject to the tax to the extent those miles will be awarded in connection with the purchase of taxable transportation. My turbotax Amounts paid by an air carrier to a domestic air carrier for mileage awards that can be redeemed for taxable transportation are subject to the tax to the extent those miles will not be awarded in connection with the purchase of taxable transportation. My turbotax Domestic-segment tax. My turbotax   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. My turbotax However, see Rural airports, later. My turbotax A segment is a single takeoff and a single landing. My turbotax The amount of the domestic-segment tax is in the Instructions for Form 720. My turbotax Charter flights. My turbotax    If an aircraft is chartered, the domestic-segment tax for each segment of taxable transportation is figured by multiplying the tax by the number of passengers transported on the aircraft. My turbotax Rural airports. My turbotax   The domestic-segment tax does not apply to a segment to or from a rural airport. My turbotax An airport is a rural airport for a calendar year if fewer than 100,000 commercial passengers departed from the airport by air during the second preceding calendar year (the 100,000 passenger rule), and one of the following is true: The airport is not located within 75 miles of another airport from which 100,000 or more commercial passengers departed during the second preceding calendar year, The airport was receiving essential air service subsidies as of August 5, 1997, or The airport is not connected by paved roads to another airport. My turbotax   To apply the 100,000 passenger rule to any airport described in (3) above, only count commercial passengers departing from the airport by air on flight segments of at least 100 miles. My turbotax   An updated list of rural airports can be found on the Department of Transportation website at www. My turbotax dot. My turbotax gov and enter the phrase “Essential Air Service” in the search box. My turbotax Taxable transportation. My turbotax   Taxable transportation is transportation by air that meets either of the following tests. My turbotax It begins and ends either in the United States or at any place in Canada or Mexico not more than 225 miles from the nearest point on the continental United States boundary (this is the 225-mile zone). My turbotax It is directly or indirectly from one port or station in the United States to another port or station in the United States, but only if it is not a part of uninterrupted international air transportation, discussed later. My turbotax Round trip. My turbotax   A round trip is considered two separate trips. My turbotax The first trip is from the point of departure to the destination. My turbotax The second trip is the return trip from that destination. My turbotax Uninterrupted international air transportation. My turbotax   This means transportation entirely by air that does not begin and end in the United States or in the 225-mile zone if there is not more than a 12-hour scheduled interval between arrival and departure at any station in the United States. My turbotax For a special rule that applies to military personnel, see Exemptions, later. My turbotax Transportation between the continental U. My turbotax S. My turbotax and Alaska or Hawaii. My turbotax   This transportation is partially exempt from the tax on transportation of persons by air. My turbotax The tax does not apply to the part of the trip between the point at which the route of transportation leaves or enters the continental United States (or a port or station in the 225-mile zone) and the point at which it enters or leaves Hawaii or Alaska. My turbotax Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. My turbotax 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. My turbotax Therefore, this transportation is subject to the percentage tax on the part of the trip in U. My turbotax S. My turbotax airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. My turbotax Transportation within Alaska or Hawaii. My turbotax   The tax on transportation of persons by air applies to the entire fare paid in the case of flights between any of the Hawaiian Islands, and between any ports or stations in the Aleutian Islands or other ports or stations elsewhere in Alaska. My turbotax The tax applies even though parts of the flights may be over international waters or over Canada, if no point on the direct line of transportation between the ports or stations is more than 225 miles from the United States (Hawaii or Alaska). My turbotax Package tours. My turbotax   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. My turbotax The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. My turbotax ” This rule also applies to the tax on the use of international air travel facilities, discussed later. My turbotax Liability for tax. My turbotax   The person paying for taxable transportation is liable for the tax and, ordinarily, the person receiving the payment collects the tax, files the returns, and pays the tax over to the government. My turbotax However, if payment is made outside the United States for a prepaid order, exchange order, or similar order, the person furnishing the initial transportation provided for under that order must collect the tax. My turbotax    A travel agency that is an independent broker and sells tours on aircraft that it charters must collect the transportation tax, file the returns, and pay the tax over to the government. My turbotax However, a travel agency that sells tours as the agent of an airline must collect the tax and remit it to the airline for the filing of returns and for the payment of the tax over to the government. My turbotax An independent third party that is not under the airline's supervision or control, but is acting on behalf of, and receiving compensation from, a passenger, is not required to collect the tax and pay it to the government. My turbotax For more information on resellers of air transportation, see Revenue Ruling 2006-52. My turbotax You can find Revenue Ruling 2006-52 on page 761 of I. My turbotax R. My turbotax B. My turbotax 2006-43 at www. My turbotax irs. My turbotax gov/pub/irs-irbs/irb06-43. My turbotax pdf. My turbotax   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. My turbotax But see Certain helicopter uses, later. My turbotax   For taxable transportation that begins and ends in the United States, the tax applies regardless of whether the payment is made in or outside the United States. My turbotax   If the tax is not paid when payment for the transportation is made, the air carrier providing the initial segment of the transportation that begins or ends in the United States becomes liable for the tax. My turbotax Exemptions. My turbotax   The tax on transportation of persons by air does not apply in the following situations. My turbotax See also Special Rules on Transportation Taxes, later. My turbotax Military personnel on international trips. My turbotax   When traveling in uniform at their own expense, United States military personnel on authorized leave are deemed to be traveling in uninterrupted international air transportation (defined earlier) even if the scheduled interval between arrival and departure at any station in the United States is actually more than 12 hours. My turbotax However, such personnel must buy their tickets within 12 hours after landing at the first domestic airport and accept the first available accommodation of the type called for by their tickets. My turbotax The trip must begin or end outside the United States and the 225-mile zone. My turbotax Certain helicopter uses. My turbotax   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. My turbotax Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. My turbotax Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). My turbotax Providing emergency medical transportation. My turbotax   However, during a use described in items (1) or (2), the tax applies if the helicopter takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. My turbotax For item (1), treat each flight segment as a separate flight. My turbotax Fixed-wing aircraft uses. My turbotax   The tax does not apply to air transportation by fixed-wing aircraft if the fixed-wing aircraft is used for any of the following purposes. My turbotax Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). My turbotax Providing emergency medical transportation. My turbotax The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. My turbotax   However, during a use described in item (1), the tax applies if the fixed-wing aircraft takes off from, or lands at, a facility eligible for assistance under the Airport and Airway Development Act of 1970, or otherwise uses services provided under section 44509 or 44913(b) or subchapter I of chapter 471 of title 49, United States Code. My turbotax Skydiving. My turbotax   The tax does not apply to any air transportation exclusively for the purpose of skydiving. My turbotax Seaplanes. My turbotax   The tax does not apply to any air transportation by seaplane for any segment consisting of a takeoff from, and a landing on, water if the places where the takeoff and landing occur are not receiving financial assistance from the Airport and Airways Trust Fund. My turbotax Bonus tickets. My turbotax   The tax does not apply to free bonus tickets issued by an airline company to its customers who have satisfied all requirements to qualify for the bonus tickets. My turbotax However, the tax applies to amounts paid by customers for advance bonus tickets when customers have traveled insufficient mileage to fully qualify for the free advance bonus tickets. My turbotax International Air Travel Facilities A tax per person is imposed (whether in or outside the United States) for international flights that begin or end in the United States. My turbotax However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. My turbotax This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. My turbotax It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. My turbotax See the Instructions for Form 720 for the tax rates. My turbotax Transportation of Property by Air A tax of 6. My turbotax 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. My turbotax The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. My turbotax The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. My turbotax The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. My turbotax Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. My turbotax Exemptions. My turbotax   The tax on transportation of property by air does not apply in the following situations. My turbotax See also Special Rules on Transportation Taxes, later. My turbotax Cropdusting and firefighting service. My turbotax   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. My turbotax Exportation. My turbotax    The tax does not apply to payments for transportation of property by air in the course of exportation (including to United States possessions) by continuous movement, as evidenced by the execution of Form 1363, Export Exemption Certificate. My turbotax See Form 1363 for more information. My turbotax Certain helicopter and fixed-wing air ambulance uses. My turbotax   The tax does not apply to amounts paid for the use of helicopters in construction to set heating and air conditioning units on roofs of buildings, to dismantle tower cranes, and to aid in construction of power lines and ski lifts. My turbotax   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. My turbotax The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. My turbotax Skydiving. My turbotax   The tax does not apply to any air transportation exclusively for the purpose of skydiving. My turbotax Excess baggage. My turbotax    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. My turbotax Surtax on fuel used in a fractional ownership program aircraft. My turbotax   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. My turbotax Alaska and Hawaii. My turbotax   For transportation of property to and from Alaska and Hawaii, the tax in general does not apply to the portion of the transportation that is entirely outside the continental United States (or the 225-mile zone if the aircraft departs from or arrives at an airport in the 225-mile zone). My turbotax But the tax applies to flights between ports or stations in Alaska and the Aleutian Islands, as well as between ports or stations in Hawaii. My turbotax The tax applies even though parts of the flights may be over international waters or over Canada, if no point on a line drawn from where the route of transportation leaves the United States (Alaska) to where it reenters the United States (Alaska) is more than 225 miles from the United States. My turbotax Liability for tax. My turbotax   The person paying for taxable transportation is liable for the tax and, ordinarily, the person engaged in the business of transporting property by air for hire receives the payment, collects the tax, files the returns, and pays the tax over to the government. My turbotax   If tax is not paid when a payment is made outside the United States, the person furnishing the last segment of taxable transportation collects the tax from the person to whom the property is delivered in the United States. My turbotax Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. My turbotax Aircraft used by affiliated corporations. My turbotax   The taxes do not apply to payments received by one member of an affiliated group of corporations from another member for services furnished in connection with the use of an aircraft. My turbotax However, the aircraft must be owned or leased by a member of the affiliated group and cannot be available for hire by a nonmember of the affiliated group. My turbotax Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. My turbotax   For this rule, an affiliated group of corporations is any group of corporations connected with a common parent corporation through 80% or more of stock ownership. My turbotax Small aircraft. My turbotax   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. My turbotax However, the taxes do apply if the aircraft is operated on an established line. My turbotax “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. My turbotax However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. My turbotax   Consider an aircraft to be operated on an established line if it is operated on a charter basis between two cities also served by that carrier on a regularly scheduled basis. My turbotax   Also, the taxes apply if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight or whether or not it is operated on an established line. My turbotax Mixed load of persons and property. My turbotax   If a single amount is paid for air transportation of persons and property, the payment must be allocated between the amount subject to the tax on transportation of persons and the amount subject to the tax on transportation of property. My turbotax The allocation must be reasonable and supported by adequate records. My turbotax Credits or refunds. My turbotax   If tax is collected and paid over for air transportation that is not taxable air transportation, the collector may claim a credit or refund if it has repaid the tax to the person from whom the tax was collected or obtained the consent of that person to the allowance of the credit or refund. My turbotax Alternatively, the person who paid the tax may claim a refund. My turbotax For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. My turbotax Prev  Up  Next   Home   More Online Publications