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Senior Income Tax

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Senior Income Tax

Senior income tax 4. Senior income tax   Communications and Air Transportation Taxes Table of Contents Uncollected Tax Report Communications TaxLocal-only service. Senior income tax Private communication service. Senior income tax 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. Senior income tax 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. Senior income tax If you fail to collect and pay over the taxes, you may be liable for the trust fund recovery penalty. Senior income tax See chapter 14, later. Senior income tax 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. Senior income tax 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. Senior income tax Regular method taxpayers. Senior income tax   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. Senior income tax Alternative method taxpayers. Senior income tax   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. Senior income tax See Alternative method in  chapter 11. Senior income tax Where to file. Senior income tax    Do not file the uncollected tax report with Form 720. Senior income tax Instead, mail the report to: Internal Revenue Service Excise Tax Program SE:S:SP:EX MS C9-109 5000 Ellin Rd. Senior income tax  Lanham, MD 20706 Communications Tax A 3% tax is imposed on amounts paid for local telephone service and teletypewriter exchange service. Senior income tax Local telephone service. Senior income tax   This includes access to a local telephone system and the privilege of telephonic quality communication with most people who are part of the system. Senior income tax Local telephone service also includes any facility or services provided in connection with this service. Senior income tax 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. Senior income tax Local-only service. Senior income tax   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. Senior income tax 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. Senior income tax Private communication service. Senior income tax   Private communication service is not local telephone service. Senior income tax Private communication service includes accessory-type services provided in connection with a Centrex, PBX, or other similar system for dual use accessory equipment. Senior income tax 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. Senior income tax Teletypewriter exchange service. Senior income tax   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. Senior income tax Figuring the tax. Senior income tax   The tax is based on the sum of all charges for local telephone service included in the bill. Senior income tax 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. Senior income tax The tax on the remaining items not included in any group is based on the charge for each item separately. Senior income tax Do not include in the tax base state or local sales or use taxes that are separately stated on the taxpayer's bill. Senior income tax Exemptions Payments for certain services or payments from certain users are exempt from the communications tax. Senior income tax Nontaxable service. Senior income tax   Nontaxable service means bundled service and long distance service. Senior income tax Nontaxable service also includes pre-paid telephone cards and pre-paid cellular service. Senior income tax Bundled service. Senior income tax   Bundled service is local and long distance service provided under a plan that does not separately state the charge for the local telephone service. Senior income tax 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. Senior income tax Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. Senior income tax 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. Senior income tax   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. Senior income tax Long distance service. Senior income tax   Long distance service is telephonic quality communication with persons whose telephones are outside the local telephone system of the caller. Senior income tax Pre-paid telephone cards (PTC). Senior income tax   A PTC will be treated as bundled service unless a PTC expressly states it is for local-only service. Senior income tax Generally, the person responsible for collecting the tax is the carrier who transfers the PTC to the transferee. Senior income tax The transferee is the first person that is not a carrier to whom a PTC is transferred by the carrier. Senior income tax The transferee is the person liable for the tax and is eligible to request a credit or refund. Senior income tax For more information, see Regulations section 49. Senior income tax 4251-4. Senior income tax   The holder is the person that purchases a PTC to use and not to resell. Senior income tax Holders are not liable for the tax and cannot request a credit or refund. Senior income tax Pre-paid cellular telephones. Senior income tax   Rules similar to the PTC rules described above apply to pre-paid cellular telephones. Senior income tax The transferee is the person eligible to request the credit or refund. Senior income tax Installation charges. Senior income tax   The tax does not apply to payments received for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment. Senior income tax However, the tax does apply to payments for the repair or replacement of those items incidental to ordinary maintenance. Senior income tax Answering services. Senior income tax   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. Senior income tax Mobile radio telephone service. Senior income tax   The tax does not apply to payments for a two-way radio service that does not provide access to a local telephone system. Senior income tax Coin-operated telephones. Senior income tax   The tax for local telephone service does not apply to payments made for services by inserting coins in public coin-operated telephones. Senior income tax But the tax applies if the coin-operated telephone service is furnished for a guaranteed amount. Senior income tax Figure the tax on the amount paid under the guarantee plus any fixed monthly or other periodic charge. Senior income tax Telephone-operated security systems. Senior income tax   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. Senior income tax In addition, the tax does not apply to any amounts paid for rented communication equipment used in the security system. Senior income tax News services. Senior income tax   The tax on teletypewriter exchange service does not apply to charges for the following news services. Senior income tax Services dealing exclusively with the collection or dissemination of news for or through the public press or radio or television broadcasting. Senior income tax 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. Senior income tax 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). Senior income tax 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. Senior income tax Services not exempted. Senior income tax   The tax applies to amounts paid by members of the news media for local telephone service. Senior income tax International organizations and the American Red Cross. Senior income tax   The tax does not apply to communication services furnished to an international organization or to the American National Red Cross. Senior income tax Nonprofit hospitals. Senior income tax   The tax does not apply to telephone services furnished to income tax-exempt nonprofit hospitals for their use. Senior income tax 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. Senior income tax Nonprofit educational organizations. Senior income tax   The tax does not apply to payments received for services and facilities furnished to a nonprofit educational organization for its use. Senior income tax A nonprofit educational organization is one that satisfies all the following requirements. Senior income tax It normally maintains a regular faculty and curriculum. Senior income tax It normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. Senior income tax It is exempt from income tax under section 501(a). Senior income tax This includes a school operated by an organization exempt under section 501(c)(3) if the school meets the above qualifications. Senior income tax Qualified blood collector organizations. Senior income tax   The tax does not apply to telephone services furnished to qualified blood collector organizations for their use. Senior income tax 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. Senior income tax Federal, state, and local government. Senior income tax   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. Senior income tax 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. Senior income tax Exemption certificate. Senior income tax   Any form of exemption certificate will be acceptable if it includes all the information required by the Internal Revenue Code and Regulations. Senior income tax See Regulations section 49. Senior income tax 4253-11. Senior income tax File the certificate with the provider of the communication services. Senior income tax An exemption certificate is not required for nontaxable services. Senior income tax   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. Senior income tax The American National Red Cross and other international organizations. Senior income tax Nonprofit hospitals. Senior income tax Nonprofit educational organizations. Senior income tax Qualified blood collector organizations. Senior income tax State and local governments. Senior income tax   The federal government does not have to file any exemption certificate. Senior income tax   All other organizations must furnish exemption certificates when required. Senior income tax 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. Senior income tax Alternatively, the person who paid the tax may claim a refund. Senior income tax For more information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Senior income tax Collectors. Senior income tax   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. Senior income tax These requirements also apply to nontaxable service refunds. Senior income tax Collectors using the regular method for deposits. Senior income tax   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. Senior income tax Collectors using the alternative method for deposits. Senior income tax   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. Senior income tax For more information, see the Instructions for Form 720. Senior income tax 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. Senior income tax Transportation of Persons by Air The tax on transportation of persons by air is made up of the: Percentage tax, and Domestic-segment tax. Senior income tax Percentage tax. Senior income tax   A tax of 7. Senior income tax 5% applies to amounts paid for taxable transportation of persons by air. Senior income tax Amounts paid for transportation include charges for layover or waiting time and movement of aircraft in deadhead service. Senior income tax Mileage awards. Senior income tax   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. Senior income tax For example, this applies to mileage awards purchased by credit card companies, telephone companies, restaurants, hotels, and other businesses. Senior income tax   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. Senior income tax Until regulations are issued, the following rules apply to mileage awards. Senior income tax 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. Senior income tax 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. Senior income tax Therefore, amounts paid to a foreign air carrier for mileage awards are not subject to the tax. Senior income tax 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. Senior income tax 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. Senior income tax Domestic-segment tax. Senior income tax   The domestic-segment tax is a flat dollar amount for each segment of taxable transportation for which an amount is paid. Senior income tax However, see Rural airports, later. Senior income tax A segment is a single takeoff and a single landing. Senior income tax The amount of the domestic-segment tax is in the Instructions for Form 720. Senior income tax Charter flights. Senior income tax    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. Senior income tax Rural airports. Senior income tax   The domestic-segment tax does not apply to a segment to or from a rural airport. Senior income tax 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. Senior income tax   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. Senior income tax   An updated list of rural airports can be found on the Department of Transportation website at www. Senior income tax dot. Senior income tax gov and enter the phrase “Essential Air Service” in the search box. Senior income tax Taxable transportation. Senior income tax   Taxable transportation is transportation by air that meets either of the following tests. Senior income tax 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). Senior income tax 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. Senior income tax Round trip. Senior income tax   A round trip is considered two separate trips. Senior income tax The first trip is from the point of departure to the destination. Senior income tax The second trip is the return trip from that destination. Senior income tax Uninterrupted international air transportation. Senior income tax   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. Senior income tax For a special rule that applies to military personnel, see Exemptions, later. Senior income tax Transportation between the continental U. Senior income tax S. Senior income tax and Alaska or Hawaii. Senior income tax   This transportation is partially exempt from the tax on transportation of persons by air. Senior income tax 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. Senior income tax Leaving or entering occurs when the route of the transportation passes over either the United States border or a point 3 nautical miles (3. Senior income tax 45 statute miles) from low tide on the coast line, or when it leaves a port or station in the 225-mile zone. Senior income tax Therefore, this transportation is subject to the percentage tax on the part of the trip in U. Senior income tax S. Senior income tax airspace, the domestic-segment tax for each domestic segment, and the tax on the use of international air travel facilities, discussed later. Senior income tax Transportation within Alaska or Hawaii. Senior income tax   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. Senior income tax 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). Senior income tax Package tours. Senior income tax   The air transportation taxes apply to “complimentary” air transportation furnished solely to participants in package holiday tours. Senior income tax The amount paid for these package tours includes a charge for air transportation even though it may be advertised as “free. Senior income tax ” This rule also applies to the tax on the use of international air travel facilities, discussed later. Senior income tax Liability for tax. Senior income tax   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. Senior income tax 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. Senior income tax    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. Senior income tax 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. Senior income tax 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. Senior income tax For more information on resellers of air transportation, see Revenue Ruling 2006-52. Senior income tax You can find Revenue Ruling 2006-52 on page 761 of I. Senior income tax R. Senior income tax B. Senior income tax 2006-43 at www. Senior income tax irs. Senior income tax gov/pub/irs-irbs/irb06-43. Senior income tax pdf. Senior income tax   The fact that the aircraft does not use public or commercial airports in taking off and landing has no effect on the tax. Senior income tax But see Certain helicopter uses, later. Senior income tax   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. Senior income tax   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. Senior income tax Exemptions. Senior income tax   The tax on transportation of persons by air does not apply in the following situations. Senior income tax See also Special Rules on Transportation Taxes, later. Senior income tax Military personnel on international trips. Senior income tax   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. Senior income tax 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. Senior income tax The trip must begin or end outside the United States and the 225-mile zone. Senior income tax Certain helicopter uses. Senior income tax   The tax does not apply to air transportation by helicopter if the helicopter is used for any of the following purposes. Senior income tax Transporting individuals, equipment, or supplies in the exploration for, or the development or removal of, hard minerals, oil, or gas. Senior income tax Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Senior income tax Providing emergency medical transportation. Senior income tax   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. Senior income tax For item (1), treat each flight segment as a separate flight. Senior income tax Fixed-wing aircraft uses. Senior income tax   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. Senior income tax Planting, cultivating, cutting, transporting, or caring for trees (including logging operations). Senior income tax Providing emergency medical transportation. Senior income tax The aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Senior income tax   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. Senior income tax Skydiving. Senior income tax   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Senior income tax Seaplanes. Senior income tax   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. Senior income tax Bonus tickets. Senior income tax   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. Senior income tax 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. Senior income tax 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. Senior income tax However, for a domestic segment that begins or ends in Alaska or Hawaii, a reduced tax per person applies only to departures. Senior income tax This tax does not apply if all the transportation is subject to the percentage tax, discussed earlier. Senior income tax It also doesn't apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Senior income tax See the Instructions for Form 720 for the tax rates. Senior income tax Transportation of Property by Air A tax of 6. Senior income tax 25% is imposed on amounts paid (whether in or outside the United States) for transportation of property by air. Senior income tax The fact that the aircraft may not use public or commercial airports in taking off and landing has no effect on the tax. Senior income tax The tax applies only to amounts paid to a person engaged in the business of transporting property by air for hire. Senior income tax The tax applies only to transportation (including layover time and movement of aircraft in deadhead service) that begins and ends in the United States. Senior income tax Thus, the tax does not apply to transportation of property by air that begins or ends outside the United States. Senior income tax Exemptions. Senior income tax   The tax on transportation of property by air does not apply in the following situations. Senior income tax See also Special Rules on Transportation Taxes, later. Senior income tax Cropdusting and firefighting service. Senior income tax   The tax does not apply to amounts paid for cropdusting or aerial firefighting service. Senior income tax Exportation. Senior income tax    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. Senior income tax See Form 1363 for more information. Senior income tax Certain helicopter and fixed-wing air ambulance uses. Senior income tax   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. Senior income tax   The tax also does not apply to air transportation by helicopter or fixed-wing aircraft for the purpose of providing emergency medical services. Senior income tax The fixed-wing aircraft must be equipped for and exclusively dedicated on that flight to acute care emergency medical services. Senior income tax Skydiving. Senior income tax   The tax does not apply to any air transportation exclusively for the purpose of skydiving. Senior income tax Excess baggage. Senior income tax    The tax does not apply to excess baggage accompanying a passenger on an aircraft operated on an established line. Senior income tax Surtax on fuel used in a fractional ownership program aircraft. Senior income tax   The tax does not apply if the surtax on fuel used in a fractional ownership program aircraft (discussed earlier) is imposed. Senior income tax Alaska and Hawaii. Senior income tax   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). Senior income tax 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. Senior income tax 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. Senior income tax Liability for tax. Senior income tax   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. Senior income tax   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. Senior income tax Special Rules on Transportation Taxes In certain circumstances, special rules apply to the taxes on transportation of persons and property by air. Senior income tax Aircraft used by affiliated corporations. Senior income tax   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. Senior income tax 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. Senior income tax Determine whether an aircraft is available for hire by a nonmember of an affiliated group on a flight-by-flight basis. Senior income tax   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. Senior income tax Small aircraft. Senior income tax   The taxes do not apply to transportation furnished by an aircraft having a maximum certificated takeoff weight of 6,000 pounds or less. Senior income tax However, the taxes do apply if the aircraft is operated on an established line. Senior income tax “Operated on an established line” means the aircraft operates with some degree of regularity between definite points. Senior income tax However, it does not include any time an aircraft is being operated on a flight that is solely for sightseeing. Senior income tax   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. Senior income tax   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. Senior income tax Mixed load of persons and property. Senior income tax   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. Senior income tax The allocation must be reasonable and supported by adequate records. Senior income tax Credits or refunds. Senior income tax   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. Senior income tax Alternatively, the person who paid the tax may claim a refund. Senior income tax For information on how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Senior income tax Prev  Up  Next   Home   More Online Publications
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Filing Past Due Tax Returns

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File all tax returns that are due, regardless of whether or not you can pay in full. File your past due return the same way and to the same location where you would file an on-time return. 

If you have received a notice, make sure to send your past due return to the location indicated on the notice you received.

Why you should file your past due return now

Avoid interest and penalties

File your past due return and pay now to limit interest charges and late payment penalties.

Claim a refund

You risk losing your refund if you don't file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date. The same rule applies to a right to claim tax credits such as the Earned Income Credit.

We hold income tax refunds in cases where our records show that one or more income tax returns are past due. We hold them until we get the past due return or receive an acceptable reason for not filing a past due return.

Protect Social Security benefits

If you are self-employed and do not file your federal income tax return, any self-employment income you earned will not be reported to the Social Security Administration and you will not receive credits toward Social Security retirement or disability benefits.

Avoid issues obtaining loans

Loan approvals may be delayed if you don't file your return. Copies of filed tax returns must be submitted to financial institutions, mortgage lenders/brokers, etc., whenever you want to buy or refinance a home, get a loan for a business, or apply for federal aid for higher education.

If you owe more than you can pay

If you cannot pay what you owe, you can request an additional 60-120 days to pay your account in full through the Online Payment Agreement application or by calling 800-829-1040; no user fee will be charged. If you need more time to pay, you can request an installment agreement or you may qualify for an offer in compromise.

What if you don’t file voluntarily

Substitute Return 

If you fail to file, we may file a substitute return for you. This return might not give you credit for deductions and exemptions you may be entitled to receive. We will send you a Notice of Deficiency CP3219N (90-day letter) proposing a tax assessment. You will have 90 days to file your past due tax return or file a petition in Tax Court. If you do neither, we will proceed with our proposed assessment. If you have received notice CP3219N you can not request an extension to file. 

If any of the income listed is incorrect, you may do the following:

  • Contact us at 1-866-681-4271 to let us know.
  • Contact the payer (source) of the income to request a corrected Form W-2 or 1099.
  • Attach the corrected forms when you send us your completed tax returns.

If the IRS files a substitute return, it is still in your best interest to file your own tax return to take advantage of any exemptions, credits and deductions you are entitled to receive. The IRS will generally adjust your account to reflect the correct figures.

Collection and enforcement actions

The return we prepare for you (our proposed assessment) will lead to a tax bill, which, if unpaid, will trigger the collection process. This can include such actions as a levy on your wages or bank account or the filing of a notice of federal tax lien.

If you repeatedly do not file, you could be subject to additional enforcement measures, such as additional penalties and/or criminal prosecution.

Help filing your past due return

For filing help, call 1-800-829-1040 or 1-800-829-4059 for TTY/TDD. If you need income information to help prepare a past due return, call the toll-free number at 1-866-681-4271, or contact your employer or payer.

Get our online tax forms and instructions to file your past due return, or order them by calling 1-800-Tax-Form (1-800-829-3676) or 1-800-829-4059 for TTY/TDD. 

If you are experiencing a hardship and you can’t file your past due return, you can call or write your local Taxpayer Advocate Office for your state.

Already filed your past due return

If you received a notice, you should send us a copy of the past due return to the indicated address.

It takes approximately 6 weeks for us to process an accurately completed past due tax return.

Page Last Reviewed or Updated: 16-Sep-2013

The Senior Income Tax

Senior income tax 5. Senior income tax   Soil and Water Conservation Expenses Table of Contents Introduction Topics - This chapter discusses: Business of Farming Plan Certification Conservation ExpensesWater well. Senior income tax Assessment by Conservation DistrictAssessment for Depreciable Property 25% Limit on DeductionNet operating loss. Senior income tax When to Deduct or Capitalize Sale of a Farm Introduction If you are in the business of farming, you can choose to deduct certain expenses for: Soil or water conservation, Prevention of erosion of land used in farming, or Endangered species recovery. Senior income tax Otherwise, these are capital expenses that must be added to the basis of the land. Senior income tax (See chapter 6 for information on determining basis. Senior income tax ) Conservation expenses for land in a foreign country do not qualify for this special treatment. Senior income tax The deduction for conservation expenses cannot be more than 25% of your gross income from farming. Senior income tax See 25% Limit on Deduction , later. Senior income tax Although some expenses are not deductible as soil and water conservation expenses, they may be deductible as ordinary and necessary farm expenses. Senior income tax These include interest and taxes, the cost of periodically clearing brush from productive land, the regular removal of sediment from a drainage ditch, and expenses paid or incurred primarily to produce an agricultural crop that may also conserve soil. Senior income tax You must include in income most government payments for approved conservation practices. Senior income tax However, you can exclude some payments you receive under certain cost-sharing conservation programs. Senior income tax For more information, see Agricultural Program Payments in chapter 3. Senior income tax To get the full deduction to which you are entitled, you should maintain your records to clearly distinguish between your ordinary and necessary farm business expenses and your soil and water conservation expenses. Senior income tax Topics - This chapter discusses: Business of farming Plan certification Conservation expenses Assessment by conservation district 25% limit on deduction When to deduct or capitalize Sale of a farm Business of Farming For purposes of soil and water conservation expenses, you are in the business of farming if you cultivate, operate, or manage a farm for profit, either as an owner or a tenant. Senior income tax You are not in the business of farming if you cultivate or operate a farm for recreation or pleasure, rather than for profit. Senior income tax You are not farming if you are engaged only in forestry or the growing of timber. Senior income tax Farm defined. Senior income tax   A farm includes livestock, dairy, poultry, fish, fruit, and truck farms. Senior income tax It also includes plantations, ranches, ranges, and orchards. Senior income tax A fish farm is an area where fish and other marine animals are grown or raised and artificially fed, protected, etc. Senior income tax It does not include an area where they are merely caught or harvested. Senior income tax A plant nursery is a farm for purposes of deducting soil and water conservation expenses. Senior income tax Farm rental. Senior income tax   If you own a farm and receive farm rental payments based on farm production, either in cash or crop shares, you are in the business of farming. Senior income tax If you get cash rental for a farm you own that is not used in farm production, you cannot deduct soil and water conservation expenses for that farm. Senior income tax   If you receive a fixed rental payment that is not based on farm production, you are in the business of farming only if you materially participate in operating or managing the farm. Senior income tax Example. Senior income tax You own a farm in Iowa and live in California. Senior income tax You rent the farm for $175 in cash per acre and do not materially participate in producing or managing production of the crops grown on the farm. Senior income tax You cannot deduct your soil conservation expenses for this farm. Senior income tax You must capitalize the expenses and add them to the basis of the land. Senior income tax     For more information, see Material participation for landlords under Landlord Participation in Farming in chapter 12. Senior income tax Plan Certification You can deduct soil and water conservation expenses only if they are consistent with a plan approved by the Natural Resources Conservation Service (NRCS) of the Department of Agriculture. Senior income tax If no such plan exists, the expenses must be consistent with a soil conservation plan of a comparable state agency. Senior income tax Keep a copy of the plan with your books and records to support your deductions. Senior income tax Conservation plan. Senior income tax   A conservation plan includes the farming conservation practices approved for the area where your farmland is located. Senior income tax There are three types of approved plans. Senior income tax NRCS individual site plans. Senior income tax These plans are issued individually to farmers who request assistance from NRCS to develop a conservation plan designed specifically for their farmland. Senior income tax NRCS county plans. Senior income tax These plans include a listing of farm conservation practices approved for the county where the farmland is located. Senior income tax You can deduct expenses for conservation practices not included on the NRCS county plans only if the practice is a part of an individual site plan. Senior income tax Comparable state agency plans. Senior income tax These plans are approved by state agencies and can be approved individual site plans or county plans. Senior income tax   A list of NRCS conservation programs is available at www. Senior income tax nrcs. Senior income tax usda. Senior income tax gov/programs. Senior income tax Individual site plans can be obtained from NRCS offices and the comparable state agencies. Senior income tax Conservation Expenses You can deduct conservation expenses only for land you or your tenant are using, or have used in the past, for farming. Senior income tax These expenses include, but are not limited to, the following. Senior income tax The treatment or movement of earth, such as: Leveling, Conditioning, Grading, Terracing, Contour furrowing, and Restoration of soil fertility. Senior income tax The construction, control, and protection of: Diversion channels, Drainage ditches, Irrigation ditches, Earthen dams, and Watercourses, outlets, and ponds. Senior income tax The eradication of brush. Senior income tax The planting of windbreaks. Senior income tax You cannot deduct expenses to drain or fill wetlands, or to prepare land for center pivot irrigation systems, as soil and water conservation expenses. Senior income tax These expenses are added to the basis of the land. Senior income tax If you choose to deduct soil and water conservation expenses, you cannot exclude from gross income any cost-sharing payments you receive for those expenses. Senior income tax See chapter 3 for information about payments eligible for the cost-sharing exclusion. Senior income tax New farm or farmland. Senior income tax   If you acquire a new farm or new farmland from someone who was using it in farming immediately before you acquired the land, soil and water conservation expenses you incur on it will be treated as made on land used in farming at the time the expenses were paid or incurred. Senior income tax You can deduct soil and water conservation expenses for this land if your use of it is substantially a continuation of its use in farming. Senior income tax The new farming activity does not have to be the same as the old farming activity. Senior income tax For example, if you buy land that was used for grazing cattle and then prepare it for use as an apple orchard, you can deduct your conservation expenses. Senior income tax Land not used for farming. Senior income tax   If your conservation expenses benefit both land that does not qualify as land used for farming and land that does qualify, you must allocate the expenses between the two types of land. Senior income tax For example, if the expenses benefit 200 acres of your land, but only 120 acres of this land are used for farming, then you can deduct 60% (120 ÷ 200) of the expenses. Senior income tax You can use another method to allocate these expenses if you can clearly show that your method is more reasonable. Senior income tax Depreciable conservation assets. Senior income tax   You generally cannot deduct your expenses for depreciable conservation assets. Senior income tax However, you can deduct certain amounts you pay or incur for an assessment for depreciable property that a soil and water conservation or drainage district levies against your farm. Senior income tax See Assessment for Depreciable Property , later. Senior income tax   You must capitalize expenses to buy, build, install, or improve depreciable structures or facilities. Senior income tax These expenses include those for materials, supplies, wages, fuel, hauling, and moving dirt when making structures such as tanks, reservoirs, pipes, culverts, canals, dams, wells, or pumps composed of masonry, concrete, tile, metal, or wood. Senior income tax You recover your capital investment through annual allowances for depreciation. Senior income tax   You can deduct soil and water conservation expenses for nondepreciable earthen items. Senior income tax Nondepreciable earthen items include certain dams, ponds, and terraces described under Property Having a Determinable Useful Life in chapter 7. Senior income tax Water well. Senior income tax   You cannot deduct the cost of drilling a water well for irrigation and other agricultural purposes as a soil and water conservation expense. Senior income tax It is a capital expense. Senior income tax You recover your cost through depreciation. Senior income tax You also must capitalize your cost for drilling a test hole. Senior income tax If the test hole produces no water and you continue drilling, the cost of the test hole is added to the cost of the producing well. Senior income tax You can recover the total cost through depreciation deductions. Senior income tax   If a test hole, dry hole, or dried-up well (resulting from prolonged lack of rain, for instance) is abandoned, you can deduct your unrecovered cost in the year of abandonment. Senior income tax Abandonment means that all economic benefits from the well are terminated. Senior income tax For example, filling or sealing a well excavation or casing so that all economic benefits from the well are terminated constitutes an abandonment. Senior income tax Endangered species recovery expenses. Senior income tax   If you are in the business of farming and meet other specific requirements, you can choose to deduct the conservation expenses discussed earlier as endangered species recovery expenses. Senior income tax Otherwise, these are capital expenses that must be added to the basis of the land. Senior income tax   The expenses must be paid or incurred for the purpose of achieving site-specific management actions recommended in a recovery plan approved under section 4(f) of the Endangered Species Act of 1973. Senior income tax See Internal Revenue Code section 175 for more information. Senior income tax Assessment by Conservation District In some localities, a soil or water conservation or drainage district incurs expenses for soil or water conservation and levies an assessment against the farmers who benefit from the expenses. Senior income tax You can deduct as a conservation expense amounts you pay or incur for the part of an assessment that: Covers expenses you could deduct if you had paid them directly, or Covers expenses for depreciable property used in the district's business. Senior income tax Assessment for Depreciable Property You generally can deduct as a conservation expense amounts you pay or incur for the part of a conservation or drainage district assessment that covers expenses for depreciable property. Senior income tax This includes items such as pumps, locks, concrete structures (including dams and weir gates), draglines, and similar equipment. Senior income tax The depreciable property must be used in the district's soil and water conservation activities. Senior income tax However, the following limits apply to these assessments. Senior income tax The total assessment limit. Senior income tax The yearly assessment limit. Senior income tax After you apply these limits, the amount you can deduct is added to your other conservation expenses for the year. Senior income tax The total for these expenses is then subject to the 25% of gross income from farming limit on the deduction, discussed later. Senior income tax See Table 5-1 for a brief summary of these limits. Senior income tax Table 5-1. Senior income tax Limits on Deducting an Assessment by a Conservation District for Depreciable Property Total Limit on Deduction for Assessment for Depreciable Property Yearly Limit on Deduction for Assessment for Depreciable Property Yearly Limit for All Conservation Expenses 10% of: $500 + 10% of: 25% of: Total assessment against all members of the district for the property. Senior income tax Your deductible share of the cost to the district for the property. Senior income tax Your gross income from farming. Senior income tax No one taxpayer can deduct more than 10% of the total assessment. Senior income tax Any amount over 10% is a capital expense and is added to the basis of your land. Senior income tax If an assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Senior income tax If the amount you pay or incur for any year is more than the limit, you can deduct for that year only 10% of your deductible share of the cost. Senior income tax You can deduct the remainder in equal amounts over the next 9 tax years. Senior income tax Limit for all conservation expenses, including assessments for depreciable property. Senior income tax Amounts greater than 25% can be carried to the following year and added to that year's expenses. Senior income tax The total is then subject to the 25% of gross income from farming limit in that year. Senior income tax To ensure your deduction is within the deduction limits, keep records to show the following. Senior income tax The total assessment against all members of the district for the depreciable property. Senior income tax Your deductible share of the cost to the district for the depreciable property. Senior income tax Your gross income from farming. Senior income tax Total assessment limit. Senior income tax   You cannot deduct more than 10% of the total amount assessed to all members of the conservation or drainage district for the depreciable property. Senior income tax This applies whether you pay the assessment in one payment or in installments. Senior income tax If your assessment is more than 10% of the total amount assessed, both the following rules apply. Senior income tax The amount over 10% is a capital expense and is added to the basis of your land. Senior income tax If the assessment is paid in installments, each payment must be prorated between the conservation expense and the capital expense. Senior income tax Yearly assessment limit. Senior income tax   The maximum amount you can deduct in any one year is the total of 10% of your deductible share of the cost as explained earlier, plus $500. Senior income tax If the amount you pay or incur is equal to or less than the maximum amount, you can deduct it in the year it is paid or incurred. Senior income tax If the amount you pay or incur is more, you can deduct in that year only 10% of your deductible share of the cost. Senior income tax You can deduct the remainder in equal amounts over the next 9 tax years. Senior income tax Your total conservation expense deduction for each year is also subject to the 25% of gross income from farming limit on the deduction, discussed later. Senior income tax Example 1. Senior income tax This year, the soil conservation district levies and you pay an assessment of $2,400 against your farm. Senior income tax Of the assessment, $1,500 is for digging drainage ditches. Senior income tax You can deduct this part as a soil or conservation expense as if you had paid it directly. Senior income tax The remaining $900 is for depreciable equipment to be used in the district's irrigation activities. Senior income tax The total amount assessed by the district against all its members for the depreciable equipment is $7,000. Senior income tax The total amount you can deduct for the depreciable equipment is limited to 10% of the total amount assessed by the district against all its members for depreciable equipment, or $700. Senior income tax The $200 excess ($900 − $700) is a capital expense you must add to the basis of your farm. Senior income tax To figure the maximum amount you can deduct for the depreciable equipment this year, multiply your deductible share of the total assessment ($700) by 10%. Senior income tax Add $500 to the result for a total of $570. Senior income tax Your deductible share, $700, is greater than the maximum amount deductible in one year, so you can deduct only $70 of the amount you paid or incurred for depreciable property this year (10% of $700). Senior income tax You can deduct the balance at the rate of $70 a year over the next 9 years. Senior income tax You add $70 to the $1,500 portion of the assessment for drainage ditches. Senior income tax You can deduct $1,570 of the $2,400 assessment as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed later. Senior income tax Example 2. Senior income tax Assume the same facts in Example 1 except that $1,850 of the $2,400 assessment is for digging drainage ditches and $550 is for depreciable equipment. Senior income tax The total amount assessed by the district against all its members for depreciable equipment is $5,500. Senior income tax The total amount you can deduct for the depreciable equipment is limited to 10% of this amount, or $550. Senior income tax The maximum amount you can deduct this year for the depreciable equipment is $555 (10% of your deductible share of the total assessment, $55, plus $500). Senior income tax Since your deductible share is less than the maximum amount deductible in one year, you can deduct the entire $550 this year. Senior income tax You can deduct the entire assessment, $2,400, as a soil and water conservation expense this year, subject to the 25% of gross income from farming limit on the deduction, discussed below. Senior income tax Sale or other disposal of land during 9-year period. Senior income tax   If you dispose of the land during the 9-year period for deducting conservation expenses subject to the yearly limit, any amounts you have not yet deducted because of this limit are added to the basis of the property. Senior income tax Death of farmer during 9-year period. Senior income tax   If a farmer dies during the 9-year period, any remaining amounts not yet deducted are deducted in the year of death. Senior income tax 25% Limit on Deduction The total deduction for conservation expenses in any tax year is limited to 25% of your gross income from farming for the year. Senior income tax Gross income from farming. Senior income tax   Gross income from farming is the income you derive in the business of farming from the production of crops, fish, fruits, other agricultural products, or livestock. Senior income tax Gains from sales of draft, breeding, or dairy livestock are included. Senior income tax Gains from sales of assets such as farm machinery, or from the disposition of land, are not included. Senior income tax Carryover of deduction. Senior income tax   If your deductible conservation expenses in any year are more than 25% of your gross income from farming for that year, you can carry the unused deduction over to later years. Senior income tax However, the deduction in any later year is limited to 25% of the gross income from farming for that year as well. Senior income tax Example. Senior income tax In 2012, you have gross income of $32,000 from two farms. Senior income tax During the year, you incurred $10,000 of deductible soil and water conservation expenses for one of the farms. Senior income tax However, your deduction is limited to 25% of $32,000, or $8,000. Senior income tax The $2,000 excess ($10,000 − $8,000) is carried over to 2013 and added to deductible soil and water conservation expenses made in that year. Senior income tax The total of the 2012 carryover plus 2013 expenses is deductible in 2013, subject to the limit of 25% of your gross income from farming in 2013. Senior income tax Any expenses over the limit in that year are carried to 2014 and later years. Senior income tax Net operating loss. Senior income tax   The deduction for soil and water conservation expenses, after applying the 25% limit, is included when figuring a net operating loss (NOL) for the year. Senior income tax If the NOL is carried to another year, the soil and water conservation deduction included in the NOL is not subject to the 25% limit in the year to which it is carried. Senior income tax When to Deduct or Capitalize If you choose to deduct soil and water conservation expenses, you must deduct the total allowable amount on your tax return for the first year you pay or incur these expenses. Senior income tax If you do not choose to deduct the expenses, you must capitalize them. Senior income tax Change of method. Senior income tax   If you want to change your method for the treatment of soil and water conservation expenses, or you want to treat the expenses for a particular project or a single farm in a different manner, you must get the approval of the IRS. Senior income tax To get this approval, submit a written request by the due date of your return for the first tax year you want the new method to apply. Senior income tax You or your authorized representative must sign the request. Senior income tax   The request must include the following information. Senior income tax Your name and address. Senior income tax The first tax year the method or change of method is to apply. Senior income tax Whether the method or change of method applies to all your soil and water conservation expenses or only to those for a particular project or farm. Senior income tax If the method or change of method does not apply to all your expenses, identify the project or farm to which the expenses apply. Senior income tax The total expenses you paid or incurred in the first tax year the method or change of method is to apply. Senior income tax A statement that you will account separately in your books for the expenses to which this method or change of method relates. Senior income tax Send your request to the following  address. Senior income tax  Department of the Treasury Internal Revenue Service Center Cincinnati, OH 45999  For more information, see Change in  Accounting Method in chapter 2. Senior income tax Sale of a Farm If you sell your farm, you cannot adjust the basis of the land at the time of the sale for any unused carryover of soil and water conservation expenses (except for deductions of assessments for depreciable property, discussed earlier). Senior income tax However, if you acquire another farm and return to the business of farming, you can start taking deductions again for the unused carryovers. Senior income tax Gain on sale of farmland. Senior income tax   If you held the land 5 years or less before you sold it, gain on the sale of the land is treated as ordinary income up to the amount you previously deducted for soil and water conservation expenses. Senior income tax If you held the land less than 10 but more than 5 years, the gain is treated as ordinary income up to a specified percentage of the previous deductions. Senior income tax See Section 1252 property under Other Gains in chapter 9. Senior income tax Prev  Up  Next   Home   More Online Publications