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2011 1040 Form

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2011 1040 Form

2011 1040 form Publication 947 - Main Content Table of Contents Practice Before the IRSWhat Is Practice Before the IRS? Who Can Practice Before the IRS? Who Cannot Practice Before the IRS? How Does an Individual Become Enrolled? What Are the Rules of Practice? Authorizing a RepresentativeWhat Is a Power of Attorney? When Is a Power of Attorney Required? When Is a Power of Attorney Not Required? How Do I Fill Out Form 2848? What Happens to the Power of Attorney When Filed? How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). 2011 1040 form Practice Before the IRS The Office of Professional Responsibility and the Return Preparer Office generally are responsible for administering and enforcing the regulations governing practice before the IRS. 2011 1040 form The Office of Professional Responsibility generally has responsibility for matters related to practitioner conduct and exclusive responsibility for discipline, including disciplinary proceedings and sanctions. 2011 1040 form The Return Preparer Office is responsible for matters related to the authority to practice, including acting on applications for enrollment and administering competency testing and continuing education. 2011 1040 form What Is Practice Before the IRS? Practice before the IRS covers all matters relating to any of the following. 2011 1040 form Communicating with the IRS for a taxpayer regarding the taxpayer's rights, privileges, or liabilities under laws and regulations administered by the IRS. 2011 1040 form Representing a taxpayer at conferences, hearings, or meetings with the IRS. 2011 1040 form Preparing and filing documents, including tax returns, with the IRS for a taxpayer. 2011 1040 form Providing a client with written advice which has a potential for tax avoidance or evasion. 2011 1040 form Furnishing information at the request of the IRS or appearing as a witness for the taxpayer is not practice before the IRS. 2011 1040 form Who Can Practice Before the IRS? The following individuals can practice before the IRS. 2011 1040 form However, any individual who is recognized to practice (a recognized representative) must be designated as the taxpayer's representative and file a written declaration with the IRS stating that he or she is authorized and qualified to represent a particular taxpayer. 2011 1040 form Form 2848 can be used for this purpose. 2011 1040 form Attorneys. 2011 1040 form   Any attorney who is not currently under suspension or disbarment from practice before the IRS and who is a member in good standing of the bar of the highest court of any state, possession, territory, commonwealth, or the District of Columbia may practice before the IRS. 2011 1040 form Certified public accountants (CPAs). 2011 1040 form   Any CPA who is not currently under suspension or disbarment from practice before the IRS and who is duly qualified to practice as a CPA in any state, possession, territory, commonwealth, or the District of Columbia may practice before the IRS. 2011 1040 form Enrolled agents. 2011 1040 form   Any enrolled agent in active status who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. 2011 1040 form Enrolled retirement plan agents. 2011 1040 form   Any enrolled retirement plan agent in active status who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. 2011 1040 form The practice of enrolled retirement plan agents is limited to certain Internal Revenue Code sections that relate to their area of expertise, principally those sections governing employee retirement plans. 2011 1040 form Enrolled actuaries. 2011 1040 form   Any individual who is enrolled as an actuary by the Joint Board for the Enrollment of Actuaries who is not currently under suspension or disbarment from practice before the IRS may practice before the IRS. 2011 1040 form The practice of enrolled actuaries is limited to certain Internal Revenue Code sections that relate to their area of expertise, principally those sections governing employee retirement plans. 2011 1040 form Student. 2011 1040 form    Under certain circumstances, a student who is supervised by a practitioner may request permission to represent another person before the IRS. 2011 1040 form For more information, see Authorization for special appearances, later. 2011 1040 form Registered tax return preparers and unenrolled return preparers. 2011 1040 form   A registered tax return preparer is an individual who has passed an IRS competency test and is authorized to prepare and sign tax returns as the preparer. 2011 1040 form An unenrolled return preparer is an individual other than an attorney, CPA, enrolled agent, enrolled retirement plan agent, or enrolled actuary who prepares and signs a taxpayer's return as the preparer, or who prepares a return but is not required (by the instructions to the return or regulations) to sign the return. 2011 1040 form   Registered tax return preparers and unenrolled return preparers may only represent taxpayers before revenue agents, customer service representatives, or similar officers and employees of the Internal Revenue Service (including the Taxpayer Advocate Service) during an examination of the taxable year or period covered by the tax return they prepared and signed. 2011 1040 form Registered tax return preparers and unenrolled return preparers cannot represent taxpayers, regardless of the circumstances requiring representation, before appeals officers, revenue officers, counsel or similar officers or employees of the Internal Revenue Service or the Department of Treasury. 2011 1040 form Registered tax return preparers and unenrolled return preparers cannot execute closing agreements, extend the statutory period for tax assessments or collection of tax, execute waivers, execute claims for refund, or sign any document on behalf of a taxpayer. 2011 1040 form   If the unenrolled return preparer does not meet the requirements for limited representation, you may file Form 8821 to allow the preparer to inspect your tax information and receive copies of notices sent to you by the IRS. 2011 1040 form See Form 8821. 2011 1040 form Practice denied. 2011 1040 form   Any individual engaged in limited practice before the IRS who is involved in disreputable conduct is subject to disciplinary action. 2011 1040 form Disreputable conduct includes, but is not limited to, the list of items under Incompetence and Disreputable Conduct shown later under What Are the Rules of Practice. 2011 1040 form Other individuals who may serve as representatives. 2011 1040 form   Because of their special relationship with a taxpayer, the following individuals can represent the specified taxpayers before the IRS, provided they present satisfactory identification and, except in the case of an individual described in (1) below, proof of authority to represent the taxpayer. 2011 1040 form An individual. 2011 1040 form An individual can represent himself or herself before the IRS and does not have to file a written declaration of qualification and authority. 2011 1040 form A family member. 2011 1040 form An individual can represent members of his or her immediate family. 2011 1040 form Immediate family includes a spouse, child, parent, brother, or sister of the individual. 2011 1040 form An officer. 2011 1040 form A bona fide officer of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group can represent the corporation, association, or organized group. 2011 1040 form An officer of a governmental unit, agency, or authority, in the course of his or her official duties, can represent the organization before the IRS. 2011 1040 form A partner. 2011 1040 form A general partner may represent the partnership before the IRS. 2011 1040 form An employee. 2011 1040 form A regular full-time employee can represent his or her employer. 2011 1040 form An employer can be, but is not limited to, an individual, partnership, corporation (including a parent, subsidiary, or other affiliated corporation), association, trust, receivership, guardianship, estate, organized group, governmental unit, agency, or authority. 2011 1040 form A fiduciary. 2011 1040 form A fiduciary (trustee, executor, personal representative, administrator, receiver, or guardian) stands in the position of a taxpayer and acts as the taxpayer, not as a representative. 2011 1040 form See Fiduciary under When Is a Power of Attorney Not Required, later. 2011 1040 form Representation Outside the United States Any individual may represent an individual or entity, who is outside the United States, before personnel of the IRS when such representation occurs outside the United States. 2011 1040 form See section 10. 2011 1040 form 7(c)(1)(vii) of Circular 230. 2011 1040 form Authorization for Special Appearances The Commissioner of Internal Revenue, or delegate, can authorize an individual who is not otherwise eligible to practice before the IRS to represent another person for a particular matter. 2011 1040 form The prospective representative must request this authorization in writing from the Office of Professional Responsibility. 2011 1040 form However, it is granted only when extremely compelling circumstances exist. 2011 1040 form If granted, the Commissioner, or delegate, will issue a letter that details the conditions related to the appearance and the particular tax matter for which the authorization is granted. 2011 1040 form The authorization letter should not be confused with a letter from an IRS center advising an individual that he or she has been assigned a Centralized Authorization File (CAF) number. 2011 1040 form The issuance of a CAF number does not indicate that an individual is either recognized or authorized to practice before the IRS. 2011 1040 form It merely confirms that a centralized file for authorizations has been established for the individual under that number. 2011 1040 form Students in LITCs and the STCP. 2011 1040 form   A student who works in a Low Income Taxpayer Clinic (LITC) or Student Tax Clinic Program (STCP) who is supervised by a practitioner may request permission to represent another person before the IRS. 2011 1040 form Authorization requests must be made to the Office of Professional Responsibility. 2011 1040 form If granted, a letter authorizing the student's special appearance and detailing any conditions related to the appearance will be issued. 2011 1040 form Students receiving an authorization letter generally can represent taxpayers before any IRS function or office subject to any conditions in the authorization letter. 2011 1040 form If you intend to have a student represent you, review the authorization letter and ask your student, your student's supervisor, or the Office of Professional Responsibility if you have questions about the terms of the authorization. 2011 1040 form Who Cannot Practice Before the IRS? In general, individuals who are not eligible or who have lost the privilege as a result of certain actions cannot practice before the IRS. 2011 1040 form If an individual loses eligibility to practice, the IRS will not recognize a power of attorney that names the individual as a representative. 2011 1040 form Corporations, associations, partnerships, and other persons that are not individuals. 2011 1040 form   These organizations (or persons) are not eligible to practice before the IRS. 2011 1040 form Loss of Eligibility Generally, individuals lose their eligibility to practice before the IRS in the following ways. 2011 1040 form Not meeting the requirements for renewal of enrollment (such as continuing professional education). 2011 1040 form Requesting to be placed in inactive retirement status. 2011 1040 form Being suspended or disbarred by the Office of Professional Responsibility for violating the regulations governing practice before the IRS. 2011 1040 form Failure to meet requirements. 2011 1040 form   Individuals who fail to comply with the requirements for eligibility for renewal of enrollment will be notified by the IRS. 2011 1040 form The notice will explain the reason for noncompliance and provide the individual with an opportunity to furnish information for reconsideration. 2011 1040 form The individual has 60 days from the date of the notice to respond. 2011 1040 form Inactive roster. 2011 1040 form   An individual will be placed on the roster of inactive individuals for a period of three years, if he or she: Fails to respond timely to the notice of noncompliance with the renewal requirements, Fails to file timely the application for renewal, or Does not satisfy the requirements of eligibility for renewal. 2011 1040 form The individual must file an application for renewal and satisfy all requirements for renewal after being placed in inactive status. 2011 1040 form Otherwise, at the conclusion of the next renewal cycle, he or she will be removed from the roster and the enrollment or registration terminated. 2011 1040 form Inactive retirement status. 2011 1040 form   Individuals who request to be placed in an inactive retirement status will be ineligible to practice before the IRS. 2011 1040 form They must continue to adhere to all renewal requirements. 2011 1040 form They can be reinstated to an active enrollment status by filing an application for renewal and providing evidence that they have completed the required continuing professional education hours for the enrollment cycle or registration year. 2011 1040 form Suspension and disbarment. 2011 1040 form   Individuals authorized to practice before the IRS are subject to disciplinary proceedings and may be suspended or disbarred for violating any regulation governing practice before the IRS. 2011 1040 form This includes engaging in acts of disreputable conduct. 2011 1040 form For more information, see Incompetence and Disreputable Conduct under What are the Rules of Practice, later. 2011 1040 form   Practitioners who are suspended in a disciplinary proceeding are not allowed to practice before the IRS during the period of suspension. 2011 1040 form See What Is Practice Before the IRS, earlier. 2011 1040 form   Practitioners who are disbarred in a disciplinary proceeding are not allowed to practice before the IRS. 2011 1040 form However, a practitioner can seek reinstatement from the Office of Professional Responsibility five years after disbarment. 2011 1040 form   If the practitioner seeks reinstatement, he or she may not practice before the IRS until the Office of Professional Responsibility authorizes reinstatement. 2011 1040 form The Office of Professional Responsibility may reinstate the practitioner if it is determined that: The practitioner's future conduct is not likely to be in violation of the regulations, and Granting the reinstatement would not be contrary to the public interest. 2011 1040 form How Does an Individual Become Enrolled? The Return Preparer Office can grant enrollment to practice before the IRS to an applicant who demonstrates special competence in tax matters by passing a written examination administered by the IRS. 2011 1040 form Enrollment also can be granted to an applicant who qualifies because of past service and technical experience in the IRS. 2011 1040 form In either case, certain application forms, discussed next, must be filed. 2011 1040 form Additionally, an applicant must not have engaged in any conduct that would justify suspension or disbarment from practice before the IRS. 2011 1040 form See Incompetence and Disreputable Conduct, later. 2011 1040 form Form 2587. 2011 1040 form   Applicants can apply to take the special enrollment examination by filing Form 2587, Application for Special Enrollment Examination. 2011 1040 form Form 2587 can be filed online, by mail, or by fax. 2011 1040 form For more information, see instructions and fees listed on the form. 2011 1040 form To get Form 2587, see How To Get Tax Help, later. 2011 1040 form Form 23 and Form 23-EP. 2011 1040 form   Individuals who have passed the examination or are applying on the basis of past service and technical experience with the IRS can apply for enrollment by filing Form 23, Application for Enrollment to Practice Before the Internal Revenue Service, or Form 23-EP, Application for Enrollment to Practice Before the Internal Revenue Service as an Enrolled Retirement Plan Agent. 2011 1040 form The application must include a check or money order in the amount of the fee shown on Form 23 or Form 23-EP. 2011 1040 form Alternatively, payment may be made electronically pursuant to instructions on the forms. 2011 1040 form To get Form 23 or Form 23-EP, see How To Get Tax Help, later. 2011 1040 form Form 5434. 2011 1040 form   An individual may apply as an enrolled actuary on the basis of past employment with the IRS and technical experience by filing Form 5434, Application for Enrollment, with the Joint Board for the Enrollment of Actuaries. 2011 1040 form The application must include a check or money order in the amount of the fee shown on Form 5434. 2011 1040 form To get Form 5434, see How To Get Tax Help, later. 2011 1040 form Period of enrollment. 2011 1040 form   An enrollment card will be issued to each individual whose enrollment application is approved. 2011 1040 form The individual is enrolled until the expiration date shown on the enrollment card or certificate. 2011 1040 form To continue practicing beyond the expiration date, the individual must request renewal of the enrollment by filing Form 8554, Application for Renewal of Enrollment to Practice Before the Internal Revenue Service, or Form 8554-EP, Application for Renewal of Enrollment to Practice Before the Internal Revenue Service as an Enrolled Retirement Plan Agent (ERPA). 2011 1040 form What Are the Rules of Practice? The rules governing practice before the IRS are published in the Code of Federal Regulations at 31 C. 2011 1040 form F. 2011 1040 form R. 2011 1040 form part 10 and reprinted in Treasury Department Circular No. 2011 1040 form 230 (Circular 230). 2011 1040 form An attorney, CPA, enrolled agent, enrolled retirement plan agent, registered tax return preparer, or enrolled actuary authorized to practice before the IRS (referred to hereafter as a practitioner) has the duty to perform certain acts and is restricted from performing other acts. 2011 1040 form In addition, a practitioner cannot engage in disreputable conduct (discussed later). 2011 1040 form Any practitioner who does not comply with the rules of practice or engages in disreputable conduct is subject to disciplinary action. 2011 1040 form Also, unenrolled preparers must comply with the rules of practice and conduct to exercise the privilege of limited practice before the IRS. 2011 1040 form See Publication 470 for a discussion of the special rules for limited practice by unenrolled preparers. 2011 1040 form Duties Practitioners must promptly submit records or information requested by officers or employees of the IRS, except when the practitioner believes on reasonable belief and good faith that the information is privileged. 2011 1040 form Communications with respect to tax advice between a federally authorized tax practitioner and a taxpayer generally are confidential to the same extent that communication would be privileged if it were between a taxpayer and an attorney if the advice relates to: Noncriminal tax matters before the IRS, or Noncriminal tax proceedings brought in federal court by or against the United States. 2011 1040 form Communications regarding corporate tax shelters. 2011 1040 form   This protection of tax advice communications does not apply to any written communications between a federally authorized tax practitioner and any person, including a director, shareholder, officer, employee, agent, or representative of a corporation if the communication involves the promotion of the direct or indirect participation of the corporation in any tax shelter. 2011 1040 form Duty to advise. 2011 1040 form   A practitioner who knows that his or her client has not complied with the revenue laws or has made an error or omission in any return, document, affidavit, or other required paper, has the responsibility to advise the client promptly of the noncompliance, error, or omission, and the consequences of the noncompliance, error, or omission. 2011 1040 form Due diligence. 2011 1040 form   A practitioner must exercise due diligence when performing the following duties. 2011 1040 form Preparing or assisting in the preparing, approving, and filing of returns, documents, affidavits, and other papers relating to IRS matters. 2011 1040 form Determining the correctness of oral or written representations made by him or her to the Department of the Treasury. 2011 1040 form Determining the correctness of oral or written representations made by him or her to clients with reference to any matter administered by the IRS. 2011 1040 form Restrictions Practitioners are restricted from engaging in certain practices. 2011 1040 form The following paragraphs discuss some of these restricted practices. 2011 1040 form Delays. 2011 1040 form   A practitioner must not unreasonably delay the prompt disposition of any matter before the IRS. 2011 1040 form Assistance from disbarred or suspended persons and former IRS employees. 2011 1040 form   A practitioner must not knowingly, directly or indirectly, do the following. 2011 1040 form Accept assistance from, or assist, any person who is under disbarment or suspension from practice before the IRS if the assistance relates to matters considered practice before the IRS. 2011 1040 form Accept assistance from any former government employee where provisions of Circular 230 or any federal law would be violated. 2011 1040 form Performance as a notary. 2011 1040 form   A practitioner who is a notary public and is employed as counsel, attorney, or agent in a matter before the IRS, or has a material interest in the matter, cannot engage in any notary activities related to that matter. 2011 1040 form Negotiations of taxpayer refund checks. 2011 1040 form   Practitioners must not endorse or otherwise negotiate (cash) any refund check (including directing or accepting payment by any means, electronic or otherwise, in an account owned or controlled by the practitioner or any firm or other entity with whom the practitioner is associated) issued to the taxpayer. 2011 1040 form Incompetence and Disreputable Conduct Any practitioner or unenrolled return preparer may be disbarred or suspended from practice before the IRS, or censured, for incompetence or disreputable conduct. 2011 1040 form The following list contains examples of conduct that is considered disreputable. 2011 1040 form Being convicted of any criminal offense under the revenue laws or of any offense involving dishonesty or breach of trust. 2011 1040 form Knowingly giving false or misleading information in connection with federal tax matters, or participating in such activity. 2011 1040 form Soliciting employment by prohibited means as discussed in section 10. 2011 1040 form 30 of Circular 230. 2011 1040 form Willfully failing to file a federal tax return, evading or attempting to evade any federal tax or payment, or participating in such actions. 2011 1040 form Misappropriating, or failing to properly and promptly remit, funds received from clients for payment of taxes or other obligations due the United States. 2011 1040 form Directly or indirectly attempting to influence the official action of IRS employees by the use of threats, false accusations, duress, or coercion, or by offering gifts, favors, or any special inducements. 2011 1040 form Being disbarred or suspended from practice as an attorney, CPA, public accountant, or actuary, by the District of Columbia or any state, possession, territory, commonwealth, or any federal court, or any federal agency, body, or board. 2011 1040 form Knowingly aiding and abetting another person to practice before the IRS during a period of suspension, disbarment, or ineligibility of that other person. 2011 1040 form Using abusive language, making false accusations and statements knowing them to be false, circulating or publishing malicious or libelous matter, or engaging in any contemptuous conduct in connection with practice before the IRS. 2011 1040 form Giving a false opinion knowingly, recklessly, or through gross incompetence; or following a pattern of providing incompetent opinions in questions arising under the federal tax laws. 2011 1040 form Censure, Disbarments, and Suspensions The Office of Professional Responsibility may censure or institute proceedings to censure, suspend or disbar any attorney, CPA, or enrolled agent who has violated Circular 230. 2011 1040 form A practitioner will be given the opportunity to demonstrate compliance with the rules before any disciplinary action is taken. 2011 1040 form Authorizing a Representative You may either represent yourself, or you may authorize an individual to represent you before the IRS. 2011 1040 form If you chose to have someone represent you, your representative must be a person eligible to practice before the IRS. 2011 1040 form See Who Can Practice Before the IRS, earlier. 2011 1040 form What Is a Power of Attorney? A power of attorney is your written authorization for an individual to act on your behalf. 2011 1040 form If the authorization is not limited, the individual generally can perform all acts that you can perform. 2011 1040 form The authority granted to a registered tax return preparer or an unenrolled preparer is limited. 2011 1040 form For information on the limits regarding registered tax return preparers, see Circular 230 §10. 2011 1040 form 3(f). 2011 1040 form For information on the limits regarding unenrolled preparers, see Publication 470. 2011 1040 form Acts performed. 2011 1040 form   Any representative, other than a registered tax return preparer or an unenrolled return preparer, can usually perform the following acts. 2011 1040 form Represent you before any office of the IRS. 2011 1040 form Sign an offer or a waiver of restriction on assessment or collection of a tax deficiency, or a waiver of notice of disallowance of claim for credit or refund. 2011 1040 form Sign a consent to extend the statutory time period for assessment or collection of a tax. 2011 1040 form Sign a closing agreement. 2011 1040 form Signing your return. 2011 1040 form   The representative named under a power of attorney is not permitted to sign your income tax return unless: The signature is permitted under the Internal Revenue Code and the related regulations (see Regulations section 1. 2011 1040 form 6012-1(a)(5)). 2011 1040 form You specifically authorize this in your power of attorney. 2011 1040 form For example, the regulation permits a representative to sign your return if you are unable to sign the return due to: Disease or injury. 2011 1040 form Continuous absence from the United States (including Puerto Rico) for a period of at least 60 days prior to the date required by law for filing the return. 2011 1040 form Other good cause if specific permission is requested of and granted by the IRS. 2011 1040 form When a return is signed by a representative, it must be accompanied by a power of attorney (or copy) authorizing the representative to sign the return. 2011 1040 form For more information, see the Form 2848 instructions. 2011 1040 form Limitation on substitution or delegation. 2011 1040 form   A recognized representative can substitute or delegate authority under the power of attorney to another recognized representative only if the act is specifically authorized by you on the power of attorney. 2011 1040 form   After a substitution has been made, only the newly recognized representative will be recognized as the taxpayer's representative. 2011 1040 form If a delegation of power has been made, both the original and the delegated representative will be recognized by the IRS to represent you. 2011 1040 form Disclosure of returns to a third party. 2011 1040 form   Your representative cannot execute consents that will allow the IRS to disclose tax return or return information to a third party unless you specifically delegate this authority to your representative on line 5 of Form 2848. 2011 1040 form Incapacity or incompetency. 2011 1040 form   A power of attorney is generally terminated if you become incapacitated or incompetent. 2011 1040 form   The power of attorney can continue, however, in the case of your incapacity or incompetency if you authorize this on line 5 “Other” of the Form 2848 and if your non-IRS durable power of attorney meets all the requirements for acceptance by the IRS. 2011 1040 form See Non-IRS powers of attorney, later. 2011 1040 form When Is a Power of Attorney Required? Submit a power of attorney when you want to authorize an individual to represent you before the IRS, whether or not the representative performs any of the other acts cited earlier under What Is a Power of Attorney. 2011 1040 form A power of attorney is most often required when you want to authorize another individual to perform at least one of the following acts on your behalf. 2011 1040 form Represent you at a meeting with the IRS. 2011 1040 form Prepare and file a written response to the IRS. 2011 1040 form Form Required Use Form 2848 to appoint a recognized representative to act on your behalf before the IRS. 2011 1040 form Individuals recognized to practice before the IRS are listed under Part II, Declaration of Representative, of Form 2848. 2011 1040 form Your representative must complete that part of the form. 2011 1040 form Non-IRS powers of attorney. 2011 1040 form   The IRS will accept a non-IRS power of attorney, but a completed Form 2848 must be attached in order for the power of attorney to be entered on the Centralized Authorization File (CAF) system. 2011 1040 form For more information, see Processing a non-IRS power of attorney, later. 2011 1040 form   If you want to use a power of attorney document other than Form 2848, it must contain the following information. 2011 1040 form Your name and mailing address. 2011 1040 form Your social security number and/or employer identification number. 2011 1040 form Your employee plan number, if applicable. 2011 1040 form The name and mailing address of your representative(s). 2011 1040 form The types of tax involved. 2011 1040 form The federal tax form number. 2011 1040 form The specific year(s) or period(s) involved. 2011 1040 form For estate tax matters, the decedent's date of death. 2011 1040 form A clear expression of your intention concerning the scope of authority granted to your representative(s). 2011 1040 form Your signature and date. 2011 1040 form You also must attach to the non-IRS power of attorney a signed and dated statement made by your representative. 2011 1040 form This statement, which is referred to as the Declaration of Representative, is contained in Part II of Form 2848. 2011 1040 form The statement should read: I am not currently under suspension or disbarment from practice before the Internal Revenue Service or other practice of my profession by any other authority, I am aware of the regulations contained in Circular 230, I am authorized to represent the taxpayer(s) identified in the power of attorney, and I am an individual described in 26 CFR 601. 2011 1040 form 502(b). 2011 1040 form Required information missing. 2011 1040 form   The IRS will not accept your non-IRS power of attorney if it does not contain all the information listed above. 2011 1040 form You can sign and submit a completed Form 2848 or a new non-IRS power of attorney that contains all the information. 2011 1040 form If you cannot sign an acceptable replacement document, your attorney-in-fact may be able to perfect (make acceptable to the IRS) your non-IRS power of attorney by using the procedure described next. 2011 1040 form Procedure for perfecting a non-IRS power of attorney. 2011 1040 form   Under the following conditions, the attorney-in-fact named in your non-IRS power of attorney can sign a Form 2848 on your behalf. 2011 1040 form The original non-IRS power of attorney grants authority to handle federal tax matters (for example, general authority to perform any acts). 2011 1040 form The attorney-in-fact attaches a statement (signed under penalty of perjury) to the Form 2848 stating that the original non-IRS power of attorney is valid under the laws of the governing jurisdiction. 2011 1040 form Example. 2011 1040 form John Elm, a taxpayer, signs a non-IRS durable power of attorney that names his neighbor and CPA, Ed Larch, as his attorney-in-fact. 2011 1040 form The power of attorney grants Ed the authority to perform any and all acts on John's behalf. 2011 1040 form However, it does not list specific tax-related information such as types of tax or tax form numbers. 2011 1040 form Shortly after John signs the power of attorney, he is declared incompetent. 2011 1040 form Later, a federal tax matter arises concerning a prior year return filed by John. 2011 1040 form Ed attempts to represent John before the IRS but is rejected because the durable power of attorney does not contain required information. 2011 1040 form If Ed attaches a statement (signed under the penalty of perjury) that the durable power of attorney is valid under the laws of the governing jurisdiction, he can sign a completed Form 2848 and submit it on John's behalf. 2011 1040 form If Ed can practice before the IRS (see Who Can Practice Before the IRS, earlier), he can name himself as representative on Form 2848. 2011 1040 form Otherwise, he must name another individual who can practice before the IRS. 2011 1040 form Processing a non-IRS power of attorney. 2011 1040 form   The IRS has a centralized computer database system called the CAF system. 2011 1040 form This system contains information on the authority of taxpayer representatives. 2011 1040 form Generally, when you submit a power of attorney document to the IRS, it is processed for inclusion on the CAF system. 2011 1040 form Entry of your power of attorney on the CAF system enables IRS personnel, who do not have a copy of your power of attorney, to verify the authority of your representative by accessing the CAF. 2011 1040 form It also enables the IRS to automatically send copies of notices and other IRS communications to your representative if you specify that your representative should receive those communications. 2011 1040 form   You can have your non-IRS power of attorney entered on the CAF system by attaching it to a completed Form 2848 and submitting it to the IRS. 2011 1040 form Your signature is not required; however, your attorney-in-fact must sign the Declaration of Representative (see Part II of Form 2848). 2011 1040 form Preparation of Form — Helpful Hints The preparation of Form 2848 is illustrated by an example, later under How Do I Fill Out Form 2848. 2011 1040 form However, the following will also assist you in preparing the form. 2011 1040 form Line-by-line hints. 2011 1040 form   The following hints are summaries of some of the line-by-line instructions for Form 2848. 2011 1040 form Line 1—Taxpayer information. 2011 1040 form   If a joint return is involved, the husband and wife each file a separate Form 2848 if they both want to be represented. 2011 1040 form If only one spouse wants to be represented in the matter, that spouse files a Form 2848. 2011 1040 form Line 2—Representative(s). 2011 1040 form   Only individuals may be named as representatives. 2011 1040 form If your representative has not been assigned a CAF number, enter “None” on that line and the IRS will issue one to your representative. 2011 1040 form If the representative's address or phone number has changed since the CAF number was issued, you should check the appropriate box. 2011 1040 form Enter your representative's fax number if available. 2011 1040 form   If you want to name more than three representatives, attach additional Form(s) 2848. 2011 1040 form The IRS can send copies of notices and communications to two of your representatives. 2011 1040 form You must, however, check the boxes on line 2 of the Form 2848 if you want the IRS to routinely send copies of notices and communications to your representatives. 2011 1040 form If you do not check the boxes, your representatives will not routinely receive copies of notices and communications. 2011 1040 form Line 3—Tax matters. 2011 1040 form   You may list any tax years or periods that have already ended as of the date you sign the power of attorney. 2011 1040 form However, you may include on a power of attorney only future tax periods that end no later than 3 years after the date the power of attorney is received by the IRS. 2011 1040 form The 3 future periods are determined starting after December 31 of the year the power of attorney is received by the IRS. 2011 1040 form However, avoid general references such as “all years” or “all taxes. 2011 1040 form ” Any Form 2848 with general references will be returned. 2011 1040 form Line 4—Specific use not recorded on Centralized Authorization File (CAF). 2011 1040 form   Certain matters cannot be recorded on the CAF system. 2011 1040 form Examples of such matters include, but are not limited to, the following. 2011 1040 form Requests for a private letter ruling or technical advice. 2011 1040 form Applications for an employer identification number (EIN). 2011 1040 form Claims filed on Form 843, Claim for Refund and Request for Abatement. 2011 1040 form Corporate dissolutions. 2011 1040 form Requests for change of accounting method. 2011 1040 form Requests for change of accounting period. 2011 1040 form Applications for recognition of exemption under sections 501(c)(3), 501(a), or 521 (Forms 1023, 1034, or 1028). 2011 1040 form Request for a determination of the qualified status of an employee benefit plan (Forms 5300, 5307, or 5310). 2011 1040 form Application for Award for Original Information under section 7623. 2011 1040 form Voluntary submissions under the Employee Plans Compliance Resolution System (EPCRS). 2011 1040 form Freedom of Information Act requests. 2011 1040 form If the tax matter described on line 3 of Form 2848 concerns one of these matters specifically, check the box on line 4. 2011 1040 form If this box is checked, the representative should mail or fax the power of attorney to the IRS office handling the matter. 2011 1040 form Otherwise, the representative should bring a copy of the power of attorney to each meeting with the IRS. 2011 1040 form Where To File a Power of Attorney Generally, you can mail or fax a paper Form 2848 directly to the IRS. 2011 1040 form To determine where you should file Form 2848, see Where To File in the instructions for Form 2848. 2011 1040 form If Form 2848 is for a specific use, mail or fax it to the office handling that matter. 2011 1040 form For more information on specific use, see the Instructions for Form 2848, line 4. 2011 1040 form FAX copies. 2011 1040 form   The IRS will accept a copy of a power of attorney that is submitted by facsimile transmission (fax). 2011 1040 form If you choose to file a power of attorney by fax, be sure the appropriate IRS office is equipped to accept this type of transmission. 2011 1040 form Your representative may be able to file Form 2848 electronically via the IRS website. 2011 1040 form For more information, your representative can go to www. 2011 1040 form irs. 2011 1040 form gov and under the Tax Professionals tab, click on e-services–Online Tools for Tax Professionals. 2011 1040 form If you complete Form 2848 for electronic signature authorization, do not file Form 2848 with the IRS. 2011 1040 form Instead, give it to your representative, who will retain the document. 2011 1040 form Updating a power of attorney. 2011 1040 form   Submit any update or modification to an existing power of attorney in writing. 2011 1040 form Your signature (or the signature of the individual(s) authorized to sign on your behalf) is required. 2011 1040 form Do this by sending the updated Form 2848 or non-IRS power of attorney to the IRS office(s) where you previously sent the original(s), including the center where the related return was, or will be filed. 2011 1040 form   A recognized representative may substitute or delegate authority if you specifically authorize your representative to substitute or delegate representation in the original power of attorney. 2011 1040 form To make a substitution or delegation, the representative must file the following items with the IRS office(s) where the power of attorney was filed. 2011 1040 form A written notice of substitution or delegation signed by the recognized representative. 2011 1040 form A written declaration of representative made by the new representative. 2011 1040 form A copy of the power of attorney that specifically authorizes the substitution or delegation. 2011 1040 form Retention/Revocation of Prior Power(s) of Attorney A newly filed power of attorney concerning the same matter will revoke a previously filed power of attorney. 2011 1040 form However, the new power of attorney will not revoke the prior power of attorney if it specifically states it does not revoke such prior power of attorney and either of the following are attached to the new power of attorney. 2011 1040 form A copy of the unrevoked prior power of attorney, or A statement signed by the taxpayer listing the name and address of each representative authorized under the prior unrevoked power of attorney. 2011 1040 form Note. 2011 1040 form The filing of Form 2848 will not revoke any  Form 8821 that is in effect. 2011 1040 form Revocation of Power of Attorney/Withdrawal of Representative If you want to revoke an existing power of attorney and do not want to name a new representative, or if a representative wants to withdraw from representation, mail or fax a copy of the previously executed power of attorney to the IRS, or if the power of attorney is for a specific matter, to the IRS office handling the matter. 2011 1040 form If the taxpayer is revoking the power of attorney, the taxpayer must write “REVOKE” across the top of the first page with a current signature and date below this annotation. 2011 1040 form If the representative is withdrawing from the representation, the representative must write “WITHDRAW” across the top of the first page with a current signature and date below this annotation. 2011 1040 form If you do not have a copy of the power of attorney you want to revoke or withdraw, send a statement to the IRS. 2011 1040 form The statement of revocation or withdrawal must indicate that the authority of the power of attorney is revoked or withdrawn, list the matters and periods, and must be signed and dated by the taxpayer or representative as applicable. 2011 1040 form If the taxpayer is revoking, list the name and address of each recognized representative whose authority is revoked. 2011 1040 form When the taxpayer is completely revoking authority, the form should state “remove all years/periods” instead of listing the specific tax matter, years, or periods. 2011 1040 form If the representative is withdrawing, list the name, TIN, and address (if known) of the taxpayer. 2011 1040 form To revoke a specific use power of attorney, send the power of attorney or statement of revocation to the IRS office handling your case, using the above instructions. 2011 1040 form A power of attorney held by a student will be recorded on the CAF system for 130 days from the receipt date. 2011 1040 form If you are authorizing a student to represent you after that time, you will need to submit a current and valid Form 2848. 2011 1040 form When Is a Power of Attorney Not Required? A power of attorney is not required when the third party is not dealing with the IRS as your representative. 2011 1040 form The following situations do not require a power of attorney. 2011 1040 form Providing information to the IRS. 2011 1040 form Authorizing the disclosure of tax return information through Form 8821, Tax Information Authorization, or other written or oral disclosure consent. 2011 1040 form Allowing the IRS to discuss return information with a third party via the checkbox provided on a tax return or other document. 2011 1040 form Allowing a tax matters partner or person (TMP) to perform acts for the partnership. 2011 1040 form Allowing the IRS to discuss return information with a fiduciary. 2011 1040 form How Do I Fill Out Form 2848? The following example illustrates how to complete Form 2848. 2011 1040 form The two completed forms for this example are shown on the next pages. 2011 1040 form Example. 2011 1040 form Stan and Mary Doe have been notified that their joint tax returns (Forms 1040) for 2009, 2010, and 2011 are being examined. 2011 1040 form They have decided to appoint Jim Smith, an enrolled agent, to represent them in this matter and any future matters concerning these returns. 2011 1040 form Jim, who has prepared returns at the same location for years, already has a Centralized Authorization File (CAF) number assigned to him. 2011 1040 form Mary does not want Jim to sign any agreements on her behalf, but Stan is willing to have Jim do so. 2011 1040 form They want copies of all notices and written communications sent to Jim. 2011 1040 form This is the first time Stan and Mary have given power of attorney to anyone. 2011 1040 form They should each complete a Form 2848 as follows. 2011 1040 form Line 1—Taxpayer information. 2011 1040 form   Stan and Mary must each file a separate Form 2848. 2011 1040 form On his separate Form 2848, Stan enters his name, street address, and social security number in the spaces provided. 2011 1040 form Mary does likewise on her separate Form 2848. 2011 1040 form Line 2—Representative(s). 2011 1040 form   On their separate Forms 2848, Stan and Mary each enters the name and current address of their chosen representative, Jim Smith. 2011 1040 form Both Stan and Mary want Jim Smith to receive notices and communications concerning the matters identified in line 3, so on their separate Forms 2848, Stan and Mary each checks the box in the first column of line 2. 2011 1040 form They also enter Mr. 2011 1040 form Smith's CAF number, his telephone number, and his fax number. 2011 1040 form Mr. 2011 1040 form Smith's address, telephone number, and fax number have not changed since the IRS issued his CAF number, so Stan and Mary do not check the boxes in the second column. 2011 1040 form Line 3—Tax Matters. 2011 1040 form   On their separate Forms 2848, Stan and Mary each enters “income” for the type of tax, “1040” for the form number, and “2009, 2010, and 2011” for the tax years. 2011 1040 form Line 4—Specific use not recorded on Centralized Authorization File (CAF). 2011 1040 form   On their separate Forms 2848, Stan and Mary make no entry on this line because they do not want to restrict the use of their powers of attorney to a specific use that is not recorded on the CAF. 2011 1040 form See Preparation of Form — Helpful Hints, earlier. 2011 1040 form Line 5—Acts authorized. 2011 1040 form   Mary wants to sign any agreement that reflects changes to her and Stan's joint 2009, 2010, and 2011 income tax liability, so she writes “Taxpayer must sign any agreement form” on line 5 of her Form 2848. 2011 1040 form Stan does not wish to restrict the authority of Jim Smith in this regard, so he leaves line 5 of his Form 2848 blank. 2011 1040 form If either Mary or Stan had chosen, they could have listed other restrictions on line 5 of their separate Forms 2848. 2011 1040 form Line 6—Retention/revocation of prior power(s) of attorney. 2011 1040 form   Stan and Mary are each filing their first powers of attorney, so they make no entry on this line. 2011 1040 form However, if they had filed prior powers of attorney, the filing of this current power would revoke any earlier ones for the same tax matter(s) unless they checked the box on line 6 and attached a copy of the prior power of attorney that they wanted to remain in effect. 2011 1040 form   If Mary later decides that she can handle the examination on her own, she can revoke her power of attorney even though Stan does not revoke his power of attorney. 2011 1040 form (See Revocation of Power of Attorney/Withdrawal of Representative, earlier, for the special rules that apply. 2011 1040 form ) Line 7—Signature of taxpayer. 2011 1040 form   Stan and Mary each signs and dates his or her Form 2848. 2011 1040 form If a taxpayer does not sign, the IRS cannot accept the form. 2011 1040 form Part II—Declaration of Representative. 2011 1040 form   Jim Smith must complete this part of Form 2848. 2011 1040 form If he does not sign this part, the IRS cannot accept the form. 2011 1040 form What Happens to the Power of Attorney When Filed? A power of attorney will be recognized after it is received, reviewed, and determined by the IRS to contain the required information. 2011 1040 form However, until a power of attorney is entered on the CAF system, IRS personnel may be unaware of the authority of the person you have named to represent you. 2011 1040 form Therefore, during this interim period, IRS personnel may request that you or your representative bring a copy to any meeting with the IRS. 2011 1040 form This image is too large to be displayed in the current screen. 2011 1040 form Please click the link to view the image. 2011 1040 form Filled-in Form 2848 - Page 1 This image is too large to be displayed in the current screen. 2011 1040 form Please click the link to view the image. 2011 1040 form Filled-in Form 2848 - Page 2 This image is too large to be displayed in the current screen. 2011 1040 form Please click the link to view the image. 2011 1040 form Filled-in Form 2848 - Page 1 This image is too large to be displayed in the current screen. 2011 1040 form Please click the link to view the image. 2011 1040 form Filled-in Form 2848 - Page 2 Processing and Handling How the power of attorney is processed and handled depends on whether it is a complete or incomplete document. 2011 1040 form Incomplete document. 2011 1040 form   If Form 2848 is incomplete, the IRS will attempt to secure the missing information either by writing or telephoning you or your representative. 2011 1040 form For example, if your signature or signature date is missing, the IRS will contact you. 2011 1040 form If information concerning your representative is missing and information sufficient to make a contact (such as an address and/or a telephone number) is on the document, the IRS will try to contact your representative. 2011 1040 form   In either case, the power of attorney is not considered valid until all required information is entered on the document. 2011 1040 form The individual(s) named as representative(s) will not be recognized to practice before the IRS, on your behalf, until the document is complete and accepted by the IRS. 2011 1040 form Complete document. 2011 1040 form   If the power of attorney is complete and valid, the IRS will take action to recognize the representative. 2011 1040 form In most instances, this includes processing the document on the CAF system. 2011 1040 form Recording the data on the CAF system enables the IRS to direct copies of mailings to authorized representatives and to readily recognize the scope of authority granted. 2011 1040 form Documents not processed on CAF. 2011 1040 form   Specific-use powers of attorney are not processed on the CAF system (see Preparation of Form – Helpful Hints, earlier). 2011 1040 form For example, a power of attorney that is a one-time or specific-issue grant of authority is not processed on the CAF system. 2011 1040 form These documents remain with the related case files. 2011 1040 form In this situation, you should check the box on line 4 of Form 2848. 2011 1040 form In these situations, the representative should bring a copy of the power of attorney to each meeting with the IRS. 2011 1040 form Dealing With the Representative After a valid power of attorney is filed, the IRS will recognize your representative. 2011 1040 form However, if it appears the representative is responsible for unreasonably delaying or hindering the prompt disposition of an IRS matter by failing to furnish, after repeated requests, nonprivileged information, the IRS can contact you directly. 2011 1040 form For example, in most instances in which a power of attorney is recognized, the IRS will contact the representative to set up appointments and to provide lists of required items. 2011 1040 form However, if the representative is unavailable, does not respond to repeated requests, and does not provide required items (other than items considered privileged), the IRS can bypass your representative and contact you directly. 2011 1040 form If a representative engages in conduct described above, the matter can be referred to the Office of Professional Responsibility for consideration of possible disciplinary action. 2011 1040 form Notices and other correspondence. 2011 1040 form   If you have a recognized representative, you and the representative will routinely receive notices and other correspondence from the IRS (either the original or a copy) if you checked the box in the left column of line 2 of Form 2848. 2011 1040 form If the power of attorney is processed on the CAF system, the IRS will send your representative(s) a duplicate of all computer-generated correspondence that is sent to you. 2011 1040 form This includes notices and letters produced either at the Martinsburg Computing Center, or other IRS centers. 2011 1040 form The IRS employee handling the case is responsible for ensuring that the original and any requested copies of each manually-generated correspondence are sent to you and your representative(s) in accordance with your authorization. 2011 1040 form 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. 2011 1040 form By selecting the method that is best for you, you will have quick and easy access to tax help. 2011 1040 form Free help with your return. 2011 1040 form   Free help in preparing your return is available nationwide from IRS-certified volunteers. 2011 1040 form The Volunteer Income Tax Assistance (VITA) program is designed to help low and 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. 2011 1040 form 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. 2011 1040 form To find the nearest VITA or TCE site, visit IRS. 2011 1040 form gov or call 1-800-906-9887 or 1-800-829-1040. 2011 1040 form   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2011 1040 form To find the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP's website at www. 2011 1040 form aarp. 2011 1040 form org/money/taxaide. 2011 1040 form   For more information on these programs, go to IRS. 2011 1040 form gov and enter keyword “VITA” in the upper right-hand corner. 2011 1040 form Internet. 2011 1040 form You can access the IRS website at IRS. 2011 1040 form gov 24 hours a day, 7 days a week to: E-file your return. 2011 1040 form Find out about commercial tax preparation and e-file services available free to eligible taxpayers. 2011 1040 form Check the status of your refund. 2011 1040 form Go to IRS. 2011 1040 form gov and click on Where's My Refund. 2011 1040 form 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. 2011 1040 form If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 2011 1040 form Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 2011 1040 form Download forms, including talking tax forms, instructions, and publications. 2011 1040 form Order IRS products online. 2011 1040 form Research your tax questions online. 2011 1040 form Search publications online by topic or keyword. 2011 1040 form Use the online Internal Revenue Code, regulations, or other official guidance. 2011 1040 form View Internal Revenue Bulletins (IRBs) published in the last few years. 2011 1040 form Figure your withholding allowances using the withholding calculator online at www. 2011 1040 form irs. 2011 1040 form gov/individuals. 2011 1040 form Determine if Form 6251 must be filed by using our Alternative Minimum Tax (AMT) Assistant available online at www. 2011 1040 form irs. 2011 1040 form gov/individuals. 2011 1040 form Sign up to receive local and national tax news by email. 2011 1040 form Get information on starting and operating a small business. 2011 1040 form Phone. 2011 1040 form Many services are available by phone. 2011 1040 form   Ordering forms, instructions, and publications. 2011 1040 form Call 1-800-TAX -FORM (1-800-829-3676) to order current-year forms, instructions, and publications, and prior-year forms and instructions. 2011 1040 form You should receive your order within 10 days. 2011 1040 form Asking tax questions. 2011 1040 form Call the IRS with your tax questions at 1-800-829-1040. 2011 1040 form Solving problems. 2011 1040 form You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. 2011 1040 form An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. 2011 1040 form Call your local Taxpayer Assistance Center for an appointment. 2011 1040 form To find the number, go to www. 2011 1040 form irs. 2011 1040 form gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 2011 1040 form TTY/TDD equipment. 2011 1040 form If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications. 2011 1040 form TeleTax topics. 2011 1040 form Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. 2011 1040 form Refund information. 2011 1040 form To check the status of your refund, call 1-800-829-1954 or 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). 2011 1040 form 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. 2011 1040 form If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). 2011 1040 form Have your tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 2011 1040 form 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. 2011 1040 form Other refund information. 2011 1040 form To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. 2011 1040 form Evaluating the quality of our telephone services. 2011 1040 form To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. 2011 1040 form One method is for a second IRS representative to listen in on or record random telephone calls. 2011 1040 form Another is to ask some callers to complete a short survey at the end of the call. 2011 1040 form Walk-in. 2011 1040 form Many products and services are available on a walk-in basis. 2011 1040 form   Products. 2011 1040 form You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 2011 1040 form 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. 2011 1040 form Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes. 2011 1040 form Services. 2011 1040 form You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. 2011 1040 form An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 2011 1040 form 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. 2011 1040 form No appointment is necessary—just walk in. 2011 1040 form If you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. 2011 1040 form A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. 2011 1040 form If you have an ongoing, complex tax account problem or a special need, such as a disability, an appointment can be requested. 2011 1040 form All other issues will be handled without an appointment. 2011 1040 form To find the number of your local office, go to  www. 2011 1040 form irs. 2011 1040 form gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service. 2011 1040 form Mail. 2011 1040 form You can send your order for forms, instructions, and publications to the address below. 2011 1040 form You should receive a response within 10 days after your request is received. 2011 1040 form  Internal Revenue Service 1201 N. 2011 1040 form Mitsubishi Motorway Bloomington, IL 61705-6613 Taxpayer Advocate Service. 2011 1040 form   The Taxpayer Advocate Service (TAS) is your voice at the IRS. 2011 1040 form Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. 2011 1040 form 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. 2011 1040 form Remember, the worst thing you can do is nothing at all. 2011 1040 form   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. 2011 1040 form You face (or your business is facing) an immediate threat of adverse action. 2011 1040 form 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. 2011 1040 form   If you qualify for our help, we’ll do everything we can to get your problem resolved. 2011 1040 form You will be assigned to one advocate who will be with you at every turn. 2011 1040 form We have offices in every state, the District of Columbia, and Puerto Rico. 2011 1040 form Although TAS is independent within the IRS, our advocates know how to work with the IRS to get your problems resolved. 2011 1040 form And our services are always free. 2011 1040 form   As a taxpayer, you have rights that the IRS must abide by in its dealings with you. 2011 1040 form Our tax toolkit at www. 2011 1040 form TaxpayerAdvocate. 2011 1040 form irs. 2011 1040 form gov can help you understand these rights. 2011 1040 form   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. 2011 1040 form irs. 2011 1040 form gov/advocate. 2011 1040 form You can also call our toll-free number at 1-877-777-4778 or TTY/TDD 1-800-829-4059. 2011 1040 form   TAS also handles large-scale or systemic problems that affect many taxpayers. 2011 1040 form If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 2011 1040 form irs. 2011 1040 form gov/advocate. 2011 1040 form Low Income Taxpayer Clinics (LITCs). 2011 1040 form   Low Income Taxpayer Clinics (LITCs) are independent from the IRS. 2011 1040 form Some clinics serve individuals whose income is below a certain level and who need to resolve a tax problem. 2011 1040 form 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. 2011 1040 form Some clinics can provide information about taxpayer rights and responsibilities in many different languages for individuals who speak English as a second language. 2011 1040 form For more information and to find a clinic near you, see the LITC page on www. 2011 1040 form irs. 2011 1040 form gov/advocate or IRS Publication 4134, Low Income Taxpayer Clinic List. 2011 1040 form This publication is also available by calling 1-800-829-3676 or at your local IRS office. 2011 1040 form Free tax services. 2011 1040 form   Publication 910, IRS Guide to Free Tax Services, is your guide to IRS services and resources. 2011 1040 form Learn about free tax information from the IRS, including publications, services, and education and assistance programs. 2011 1040 form The publication also has an index of over 100 TeleTax topics (recorded tax information) you can listen to on the telephone. 2011 1040 form The majority of the information and services listed in this publication are available to you free of charge. 2011 1040 form If there is a fee associated with a resource or service, it is listed in the publication. 2011 1040 form   Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. 2011 1040 form DVD for tax products. 2011 1040 form You can order Publication 1796, IRS Tax Products DVD, and obtain: Current-year forms, instructions, and publications. 2011 1040 form Prior-year forms, instructions, and publications. 2011 1040 form Tax Map: an electronic research tool and finding aid. 2011 1040 form Tax law frequently asked questions. 2011 1040 form Tax Topics from the IRS telephone response system. 2011 1040 form Internal Revenue Code—Title 26 of the U. 2011 1040 form S. 2011 1040 form Code. 2011 1040 form Links to other Internet based Tax Research Materials. 2011 1040 form Fill-in, print, and save features for most tax forms. 2011 1040 form Internal Revenue Bulletins. 2011 1040 form Toll-free and email technical support. 2011 1040 form Two releases during the year. 2011 1040 form  – The first release will ship the beginning of January. 2011 1040 form  – The final release will ship the beginning of March. 2011 1040 form Purchase the DVD from National Technical Information Service (NTIS) at www. 2011 1040 form irs. 2011 1040 form gov/cdorders for $30 (no handling fee) or call 1-877-233-6767 toll free to buy the DVD for $30 (plus a $6 handling fee). 2011 1040 form Prev  Up  Next   Home   More Online Publications
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Tax Relief for Victims of Severe Storms in Colorado

Corrected Oct. 28, 2013 to adjust the counties qualified for tax relief to Adams, Arapahoe, Boulder, Clear Creek, El Paso, Fremont, Jefferson, Larimer, Logan, Morgan, and Weld. 

Updated Sept. 23, 2013 to add Arapahoe and Logan counties.

Updated Sept. 20, 2013 to add Clear Creek, El Paso and Jefferson counties.

Den-2013-28, Sept. 16, 2013

DENVER — Victims of severe storms, flooding, landslides and mudslides that began on Sept. 11, 2013 in parts of Colorado may qualify for tax relief from the Internal Revenue Service.

Following recent disaster declarations for individual assistance issued by the Federal Emergency Management Agency, the IRS announced today that affected taxpayers in Colorado will receive tax relief, and other locations may be added in coming days based on additional damage assessments by FEMA.

The President has declared the counties of Adams, Arapahoe, Boulder, Clear Creek, El Paso, Fremont, Jefferson, Larimer, Logan, Morgan, and Weld a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Sept. 11, and on or before Dec. 2, 2013, have been postponed to Dec. 2, 2013. This includes the quarterly estimated tax payment due on Sept. 16. It also includes the due date of Sept. 16 for calendar year corporations and partnerships that received extensions of time to file.

The IRS is also waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Sept. 11, and on or before Sept. 26, as long as the deposits are made by Sept. 26, 2013.

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

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

Covered Disaster Area

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

Affected Taxpayers

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

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Dec. 2, 2013, to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 11 and on or before Dec. 2, 2013.

The IRS also gives affected taxpayers until Dec. 2, 2013, to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Sept. 11 and on or before Dec. 2, 2013.

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

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Sept. 11 and on or before Sept. 26 provided the taxpayer makes these deposits by Sept. 26.

Casualty Losses

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

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

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Colorado/Severe Storms, Flooding, Landslides, and Mudslides” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

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

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

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

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

Page Last Reviewed or Updated: 28-Oct-2013

The 2011 1040 Form

2011 1040 form Publication 514 - Main Content Table of Contents Choosing To Take Credit or DeductionChoice Applies to All Qualified Foreign Taxes Making or Changing Your Choice Why Choose the Credit?Credit for Taxes Paid or Accrued Foreign Currency and Exchange Rates Foreign Tax Redetermination Who Can Take the Credit?U. 2011 1040 form S. 2011 1040 form Citizens Resident Aliens Nonresident Aliens What Foreign Taxes Qualify for the Credit?Tax Must Be Imposed on You You Must Have Paid or Accrued the Tax Tax Must Be the Legal and Actual Foreign Tax Liability Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) Foreign Taxes for Which You Cannot Take a CreditTaxes on Excluded Income Taxes for Which You Can Only Take an Itemized Deduction Taxes on Foreign Mineral Income Taxes From International Boycott Operations Taxes on Combined Foreign Oil and Gas Income Taxes of U. 2011 1040 form S. 2011 1040 form Persons Controlling Foreign Corporations and Partnerships Taxes Related to a Foreign Tax Credit Splitting Event How To Figure the CreditLimit on the Credit Separate Limit Income Allocation of Foreign Taxes Foreign Taxes From a Partnership or an S Corporation Figuring the Limit Qualified Dividends Capital Gains and Losses Allocation of Foreign and U. 2011 1040 form S. 2011 1040 form Losses Tax Treaties Carryback and CarryoverTime Limit on Tax Assessment Claim for Refund Taxes All Credited or All Deducted Married Couples How To Claim the CreditForm 1116 Records To Keep Simple Example — Filled-In Form 1116Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Comprehensive Example — Filled-In Form 1116Foreign earned income. 2011 1040 form Employee business expenses. 2011 1040 form Forms 1116 Computation of Taxable Income Part I—Taxable Income or Loss From Sources Outside the United States (for Category Checked Above) Part II—Foreign Taxes Paid or Accrued Part III—Figuring the Credit Part IV—Summary of Credits From Separate Parts III Unused Foreign Taxes How To Get Tax HelpLow Income Taxpayer Clinics Choosing To Take Credit or Deduction You can choose whether to take the amount of any qualified foreign taxes paid or accrued during the year as a foreign tax credit or as an itemized deduction. 2011 1040 form You can change your choice for each year's taxes. 2011 1040 form To choose the foreign tax credit, in most cases you must complete Form 1116 and attach it to your U. 2011 1040 form S. 2011 1040 form tax return. 2011 1040 form However, you may qualify for the exception that allows you to claim the foreign tax credit without using Form 1116. 2011 1040 form See How To Figure the Credit , later. 2011 1040 form To choose to claim the taxes as an itemized deduction, use Schedule A (Form 1040), Itemized Deductions. 2011 1040 form Figure your tax both ways—claiming the credit and claiming the deduction. 2011 1040 form Then fill out your return the way that benefits you more. 2011 1040 form See Why Choose the Credit, later. 2011 1040 form Choice Applies to All Qualified Foreign Taxes As a general rule, you must choose to take either a credit or a deduction for all qualified foreign taxes. 2011 1040 form If you choose to take a credit for qualified foreign taxes, you must take the credit for all of them. 2011 1040 form You cannot deduct any of them. 2011 1040 form Conversely, if you choose to deduct qualified foreign taxes, you must deduct all of them. 2011 1040 form You cannot take a credit for any of them. 2011 1040 form See What Foreign Taxes Qualify for the Credit , later, for the meaning of qualified foreign taxes. 2011 1040 form There are exceptions to this general rule, which are described next. 2011 1040 form Exceptions for foreign taxes not allowed as a credit. 2011 1040 form   Even if you claim a credit for other foreign taxes, you can deduct any foreign tax that is not allowed as a credit if: You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act, You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time, You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time, You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property, You participated in or cooperated with an international boycott, You paid taxes in connection with the purchase or sale of oil or gas, or You paid or accrued taxes on income or gain in connection with a covered asset acquisition. 2011 1040 form Covered asset acquisitions include certain acquisitions that result in a stepped-up basis for U. 2011 1040 form S. 2011 1040 form tax purposes. 2011 1040 form For more information, see Internal Revenue Code section 901(m). 2011 1040 form The IRS intends to issue guidance that will explain this provision in greater detail. 2011 1040 form   For more information on these items, see Taxes for Which You Can Only Take an Itemized Deduction , later, under Foreign Taxes for Which You Cannot Take a Credit. 2011 1040 form Foreign taxes that are not income taxes. 2011 1040 form   In most cases, only foreign income taxes qualify for the foreign tax credit. 2011 1040 form Other taxes, such as foreign real and personal property taxes, do not qualify. 2011 1040 form But you may be able to deduct these other taxes even if you claim the foreign tax credit for foreign income taxes. 2011 1040 form   In most cases, you can deduct these other taxes only if they are expenses incurred in a trade or business or in the production of income. 2011 1040 form However, you can deduct foreign real property taxes that are not trade or business expenses as an itemized deduction on Schedule A (Form 1040). 2011 1040 form Carrybacks and carryovers. 2011 1040 form   There is a limit on the credit you can claim in a tax year. 2011 1040 form If your qualified foreign taxes exceed the credit limit, you may be able to carry over or carry back the excess to another tax year. 2011 1040 form If you deduct qualified foreign taxes in a tax year, you cannot use a carryback or carryover in that year. 2011 1040 form That is because you cannot take both a deduction and a credit for qualified foreign taxes in the same tax year. 2011 1040 form   For more information on the limit, see How To Figure the Credit , later. 2011 1040 form For more information on carrybacks and carryovers, see Carryback and Carryover , later. 2011 1040 form Making or Changing Your Choice You can make or change your choice to claim a deduction or credit at any time during the period within 10 years from the regular due date for filing the return (without regard to any extension of time to file) for the tax year in which the taxes were actually paid or accrued. 2011 1040 form You make or change your choice on your tax return (or on an amended return) for the year your choice is to be effective. 2011 1040 form Example. 2011 1040 form You paid foreign taxes for the last 13 years and chose to deduct them on your U. 2011 1040 form S. 2011 1040 form income tax returns. 2011 1040 form You were timely in both filing your returns and paying your U. 2011 1040 form S. 2011 1040 form tax liability. 2011 1040 form In February 2013, you file an amended return for tax year 2002 choosing to take a credit for your 2002 foreign taxes because you now realize that the credit is more advantageous than the deduction for that year. 2011 1040 form Because the regular due date of your 2002 return was April 15, 2003, this choice is timely (within 10 years). 2011 1040 form Because there is a limit on the credit for your 2002 foreign tax, you have unused 2002 foreign taxes. 2011 1040 form Ordinarily, you first carry back unused foreign taxes arising in 2002 to, and claim them as a credit in, the 2 preceding tax years. 2011 1040 form If you are unable to claim all of them in those 2 years, you carry them forward to the 10 years following the year in which they arose. 2011 1040 form Because you originally chose to deduct your foreign taxes and the 10-year period for changing the choice for 2000 and 2001 has passed, you cannot change your choice and carry the unused 2002 foreign taxes back to tax years 2000 and 2001. 2011 1040 form Because the 10-year periods for changing the choice have not passed for your 2003 through 2012 income tax returns, you can still choose to claim the credit for those years and carry forward any unused 2002 foreign taxes. 2011 1040 form However, you must reduce the unused 2002 foreign taxes that you carry forward by the amount that would have been allowed as a carryback if you had timely carried back the foreign tax to tax years 2000 and 2001. 2011 1040 form You cannot take a credit or a deduction for foreign taxes paid on income you exclude under the foreign earned income exclusion or the foreign housing exclusion. 2011 1040 form See Foreign Earned Income and Housing Exclusions under Foreign Taxes for Which You Cannot Take a Credit, later. 2011 1040 form Why Choose the Credit? The foreign tax credit is intended to relieve you of a double tax burden when your foreign source income is taxed by both the United States and the foreign country. 2011 1040 form In most cases, if the foreign tax rate is higher than the U. 2011 1040 form S. 2011 1040 form rate, there will be no U. 2011 1040 form S. 2011 1040 form tax on the foreign income. 2011 1040 form If the foreign tax rate is lower than the U. 2011 1040 form S. 2011 1040 form rate, U. 2011 1040 form S. 2011 1040 form tax on the foreign income will be limited to the difference between the rates. 2011 1040 form The foreign tax credit can only reduce U. 2011 1040 form S. 2011 1040 form taxes on foreign source income; it cannot reduce U. 2011 1040 form S. 2011 1040 form taxes on U. 2011 1040 form S. 2011 1040 form source income. 2011 1040 form Although no one rule covers all situations, in most cases it is better to take a credit for qualified foreign taxes than to deduct them as an itemized deduction. 2011 1040 form This is because: A credit reduces your actual U. 2011 1040 form S. 2011 1040 form income tax on a dollar-for-dollar basis, while a deduction reduces only your income subject to tax, You can choose to take the foreign tax credit even if you do not itemize your deductions. 2011 1040 form You then are allowed the standard deduction in addition to the credit, and If you choose to take the foreign tax credit, and the taxes paid or accrued exceed the credit limit for the tax year, you may be able to carry over or carry back the excess to another tax year. 2011 1040 form (See Limit on credit under How To Figure the Credit, later. 2011 1040 form ) Example 1. 2011 1040 form For 2013, you and your spouse have adjusted gross income of $80,300, including $20,000 of dividend income from foreign sources. 2011 1040 form None of the dividends are qualified dividends. 2011 1040 form You file a joint return and can claim two $3,900 exemptions. 2011 1040 form You had to pay $2,000 in foreign income taxes on the dividend income. 2011 1040 form If you take the foreign taxes as an itemized deduction, your total itemized deductions are $15,000. 2011 1040 form Your taxable income then is $57,500 and your tax is $7,736. 2011 1040 form If you take the credit instead, your itemized deductions are only $13,000. 2011 1040 form Your taxable income then is $59,500 and your tax before the credit is $8,036. 2011 1040 form After the credit, however, your tax is only $6,036. 2011 1040 form Therefore, your tax is $1,700 lower ($7,736 − $6,036) by taking the credit. 2011 1040 form Example 2. 2011 1040 form In 2013, you receive investment income of $5,000 from a foreign country, which imposes a tax of $1,500 on that income. 2011 1040 form You report on your U. 2011 1040 form S. 2011 1040 form return this income as well as $56,000 of U. 2011 1040 form S. 2011 1040 form source wages and an allowable $49,000 partnership loss from a U. 2011 1040 form S. 2011 1040 form partnership. 2011 1040 form Your share of the partnership's gross income is $25,000 and your share of its expenses is $74,000. 2011 1040 form You are single, entitled to one $3,900 exemption, and have other itemized deductions of $6,850. 2011 1040 form If you deduct the foreign tax on your U. 2011 1040 form S. 2011 1040 form return, your taxable income is a negative $250 ($5,000 + $56,000 − $49,000 − $1,500 − $6,850 − $3,900) and your tax is $0. 2011 1040 form If you take the credit instead, your taxable income is $1,250 ($5,000 + $56,000 − $49,000 − $3,900 − $6,850) and your tax before the credit is $126. 2011 1040 form You can take a credit of only $113 because of limits discussed later. 2011 1040 form Your tax after the credit is $13 ($126 − $113), which is $13 more than if you deduct the foreign tax. 2011 1040 form If you choose the credit, you will have unused foreign taxes of $1,387 ($1,500 − $113). 2011 1040 form When deciding whether to take the credit or the deduction this year, you will need to consider whether you can benefit from a carryback or carryover of that unused foreign tax. 2011 1040 form Credit for Taxes Paid or Accrued You can claim the credit for a qualified foreign tax in the tax year in which you pay it or accrue it, depending on your method of accounting. 2011 1040 form “Tax year” refers to the tax year for which your U. 2011 1040 form S. 2011 1040 form return is filed, not the tax year for which your foreign return is filed. 2011 1040 form Accrual method of accounting. 2011 1040 form   If you use an accrual method of accounting, you can claim the credit only in the year in which you accrue the tax. 2011 1040 form You are using an accrual method of accounting if you report income when you earn it, rather than when you receive it, and you deduct your expenses when you incur them, rather than when you pay them. 2011 1040 form   In most cases, foreign taxes accrue when all the events have taken place that fix the amount of the tax and your liability to pay it. 2011 1040 form Generally, this occurs on the last day of the tax year for which your foreign return is filed. 2011 1040 form Contesting your foreign tax liability. 2011 1040 form   If you are contesting your foreign tax liability, you cannot accrue it and take a credit until the amount of foreign tax due is finally determined. 2011 1040 form However, if you choose to pay the tax liability you are contesting, you can take a credit for the amount you pay before a final determination of foreign tax liability is made. 2011 1040 form Once your liability is determined, the foreign tax credit is allowable for the year to which the foreign tax relates. 2011 1040 form If the amount of foreign taxes taken as a credit differs from the final foreign tax liability, you may have to adjust the credit, as discussed later under Foreign Tax Redetermination . 2011 1040 form You may have to post a bond. 2011 1040 form   If you claim a credit for taxes accrued but not paid, you may have to post an income tax bond to guarantee your payment of any tax due in the event the amount of foreign tax paid differs from the amount claimed. 2011 1040 form   The IRS can request this bond at any time without regard to the Time Limit on Tax Assessment discussed later under Carryback and Carryover. 2011 1040 form Cash method of accounting. 2011 1040 form   If you use the cash method of accounting, you can choose to take the credit either in the year you pay the tax or in the year you accrue it. 2011 1040 form You are using the cash method of accounting if you report income in the year you actually or constructively receive it, and deduct expenses in the year you pay them. 2011 1040 form Choosing to take credit in the year taxes accrue. 2011 1040 form   Even if you use the cash method of accounting, you can choose to take a credit for foreign taxes in the year they accrue. 2011 1040 form You make the choice by checking the box in Part II of Form 1116. 2011 1040 form Once you make that choice, you must follow it in all later years and take a credit for foreign taxes in the year they accrue. 2011 1040 form   In addition, the choice to take the credit when foreign taxes accrue applies to all foreign taxes qualifying for the credit. 2011 1040 form You cannot take a credit for some foreign taxes when paid and take a credit for others when accrued. 2011 1040 form   If you make the choice to take the credit when foreign taxes accrue and pay them in a later year, you cannot claim a deduction for any part of the previously accrued taxes. 2011 1040 form Credit based on taxes paid in earlier year. 2011 1040 form   If, in earlier years, you took the credit based on taxes paid, and this year you choose to take the credit based on taxes accrued, you may be able to take the credit this year for taxes from more than one year. 2011 1040 form Example. 2011 1040 form Last year you took the credit based on taxes paid. 2011 1040 form This year you chose to take the credit based on taxes accrued. 2011 1040 form During the year you paid foreign income taxes owed for last year. 2011 1040 form You also accrued foreign income taxes for this year that you did not pay by the end of the year. 2011 1040 form You can base the credit on your return for this year on both last year's taxes that you paid and this year's taxes that you accrued. 2011 1040 form Foreign Currency and Exchange Rates U. 2011 1040 form S. 2011 1040 form income tax is imposed on income expressed in U. 2011 1040 form S. 2011 1040 form dollars, while in most cases the foreign tax is imposed on income expressed in foreign currency. 2011 1040 form Therefore, fluctuations in the value of the foreign currency relative to the U. 2011 1040 form S. 2011 1040 form dollar may affect the foreign tax credit. 2011 1040 form Translating foreign currency into U. 2011 1040 form S. 2011 1040 form dollars. 2011 1040 form   If you receive all or part of your income or pay some or all of your expenses in foreign currency, you must translate the foreign currency into U. 2011 1040 form S. 2011 1040 form dollars. 2011 1040 form How and when you do this depends on your functional currency. 2011 1040 form In most cases, your functional currency is the U. 2011 1040 form S. 2011 1040 form dollar unless you are required to use the currency of a foreign country. 2011 1040 form   You must make all federal income tax determinations in your functional currency. 2011 1040 form The U. 2011 1040 form S. 2011 1040 form dollar is the functional currency for all taxpayers except some qualified business units. 2011 1040 form A qualified business unit is a separate and clearly identified unit of a trade or business that maintains separate books and records. 2011 1040 form Unless you are self-employed, your functional currency is the U. 2011 1040 form S. 2011 1040 form dollar. 2011 1040 form   Even if you are self-employed and have a qualified business unit, your functional currency is the U. 2011 1040 form S. 2011 1040 form dollar if any of the following apply. 2011 1040 form You conduct the business primarily in dollars. 2011 1040 form The principal place of business is located in the United States. 2011 1040 form You choose to or are required to use the dollar as your functional currency. 2011 1040 form The business books and records are not kept in the currency of the economic environment in which a significant part of the business activities is conducted. 2011 1040 form   If your functional currency is the U. 2011 1040 form S. 2011 1040 form dollar, you must immediately translate into dollars all items of income, expense, etc. 2011 1040 form , that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. 2011 1040 form If there is more than one exchange rate, use the one that most properly reflects your income. 2011 1040 form In most cases, you can get exchange rates from banks and U. 2011 1040 form S. 2011 1040 form Embassies. 2011 1040 form   If your functional currency is not the U. 2011 1040 form S. 2011 1040 form dollar, make all income tax determinations in your functional currency. 2011 1040 form At the end of the year, translate the results, such as income or loss, into U. 2011 1040 form S. 2011 1040 form dollars to report on your income tax return. 2011 1040 form    For more information, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Rate of exchange for foreign taxes paid. 2011 1040 form   Use the rate of exchange in effect on the date you paid the foreign taxes to the foreign country unless you meet the exception discussed next. 2011 1040 form If your tax was withheld in foreign currency, use the rate of exchange in effect for the date on which the tax was withheld. 2011 1040 form If you make foreign estimated tax payments, you use the rate of exchange in effect for the date on which you made the estimated tax payment. 2011 1040 form   The exchange rate rules discussed here apply even if the foreign taxes are paid or accrued with respect to a foreign tax credit splitting event (discussed later). 2011 1040 form Exception. 2011 1040 form   If you claim the credit for foreign taxes on an accrual basis, in most cases you must use the average exchange rate for the tax year to which the taxes relate. 2011 1040 form This rule applies to accrued taxes relating to tax years beginning after 1997 and only under the following conditions. 2011 1040 form The foreign taxes are paid on or after the first day of the tax year to which they relate. 2011 1040 form The foreign taxes are paid not later than 2 years after the close of the tax year to which they relate. 2011 1040 form The foreign tax liability is not denominated in an inflationary currency (defined in the Form 1116 instructions). 2011 1040 form (This condition applies to taxes paid or accrued in tax years beginning after November 6, 2007. 2011 1040 form )   For all other foreign taxes, you should use the exchange rate in effect on the date you paid them. 2011 1040 form Election to use exchange rate on date paid. 2011 1040 form   If you have accrued foreign taxes that you are otherwise required to convert using the average exchange rate, you may elect to use the exchange rate in effect on the date the foreign taxes are paid if the taxes are denominated in a nonfunctional foreign currency. 2011 1040 form If any of the accrued taxes are unpaid, you must translate them into U. 2011 1040 form S. 2011 1040 form dollars using the exchange rate on the last day of the U. 2011 1040 form S. 2011 1040 form tax year to which those taxes relate. 2011 1040 form You may make the election for all nonfunctional currency foreign income taxes or only those nonfunctional currency foreign income taxes that are attributable to qualified business units with a U. 2011 1040 form S. 2011 1040 form dollar functional currency. 2011 1040 form Once made, the election applies to the tax year for which made and all subsequent tax years unless revoked with the consent of the IRS. 2011 1040 form The election is available for tax years beginning after 2004. 2011 1040 form It must be made by the due date (including extensions) for filing the tax return for the first tax year to which the election applies. 2011 1040 form Make the election by attaching a statement to the applicable tax return. 2011 1040 form The statement must identify whether the election is made for all foreign taxes or only for foreign taxes attributable to qualified business units with a U. 2011 1040 form S. 2011 1040 form dollar functional currency. 2011 1040 form Foreign Tax Redetermination A foreign tax redetermination is any change in your foreign tax liability that may affect your U. 2011 1040 form S. 2011 1040 form foreign tax credit claimed. 2011 1040 form The year in which to claim the credit remains the year to which the foreign taxes paid or accrued relate, even if the change in foreign tax liability occurs in a later year. 2011 1040 form If a foreign tax redetermination occurs, a redetermination of your U. 2011 1040 form S. 2011 1040 form tax liability is required if any of the following conditions apply. 2011 1040 form The accrued taxes when paid differ from the amounts claimed as a credit. 2011 1040 form The accrued taxes you claimed as a credit in one tax year are not paid within 2 years after the end of that tax year. 2011 1040 form If this applies to you, you must reduce the credit previously claimed by the amount of the unpaid taxes. 2011 1040 form You will not be allowed a credit for the unpaid taxes until you pay them. 2011 1040 form When you pay the accrued taxes, a new foreign tax redetermination occurs and you must translate the taxes into U. 2011 1040 form S. 2011 1040 form dollars using the exchange rate as of the date they were paid. 2011 1040 form The foreign tax credit is allowed for the year to which the foreign tax relates. 2011 1040 form See Rate of exchange for foreign taxes paid , earlier, under Foreign Currency and Exchange Rates. 2011 1040 form The foreign taxes you paid are refunded in whole or in part. 2011 1040 form For taxes taken into account when accrued but translated into dollars on the date of payment, the dollar value of the accrued tax differs from the dollar value of the tax paid because of fluctuations in the exchange rate between the date of accrual and the date of payment. 2011 1040 form However, no redetermination is required if the change in foreign tax liability for each foreign country is solely attributable to exchange rate fluctuations and is less than the smaller of: $10,000, or 2% of the total dollar amount of the foreign tax initially accrued for that foreign country for the U. 2011 1040 form S. 2011 1040 form tax year. 2011 1040 form In this case, you must adjust your U. 2011 1040 form S. 2011 1040 form tax in the tax year in which the accrued foreign taxes are paid. 2011 1040 form Notice to the Internal Revenue Service (IRS) of Redetermination You are required to notify the IRS about a foreign tax credit redetermination that affects your U. 2011 1040 form S. 2011 1040 form tax liability for each tax year affected by the redetermination. 2011 1040 form In most cases, you must file Form 1040X, Amended U. 2011 1040 form S. 2011 1040 form Individual Income Tax Return, with a revised Form 1116 and a statement that contains information sufficient for the IRS to redetermine your U. 2011 1040 form S. 2011 1040 form tax liability for the year or years affected. 2011 1040 form See Contents of statement , later. 2011 1040 form You are not required to attach Form 1116 for a tax year affected by a redetermination if: The amount of your creditable taxes paid or accrued during the tax year is not more than $300 ($600 if married filing a joint return) as a result of the foreign tax redetermination, and You meet the requirements listed under Exemption from foreign tax credit limit under How To Figure the Credit, later. 2011 1040 form There are other exceptions to this requirement. 2011 1040 form They are discussed later under Due date of notification to IRS . 2011 1040 form Contents of statement. 2011 1040 form   The statement must include all of the following. 2011 1040 form Your name, address, and taxpayer identification number. 2011 1040 form The tax year or years that are affected by the foreign tax redetermination. 2011 1040 form The date or dates the foreign taxes were accrued, if applicable. 2011 1040 form The date or dates the foreign taxes were paid. 2011 1040 form The amount of foreign taxes paid or accrued on each date (in foreign currency) and the exchange rate used to translate each amount. 2011 1040 form Information sufficient to determine any interest due from or owing to you, including the amount of any interest paid to you by the foreign government and the dates received. 2011 1040 form   In the case of any foreign taxes that were not paid before the date two years after the close of the tax year to which those taxes relate, you must provide the amount of those taxes in foreign currency and the exchange rate that was used to translate that amount when originally claimed as a credit. 2011 1040 form   If any foreign tax was refunded in whole or in part, you must provide the date and amount (in foreign currency) of each refund, the exchange rate that was used to translate each amount when originally claimed as a credit, and the exchange rate for the date the refund was received (for purposes of computing foreign currency gain or loss under Internal Revenue Code section 988). 2011 1040 form Due date of notification to IRS. 2011 1040 form   If you pay less foreign tax than you originally claimed a credit for, in most cases you must file a notification by the due date (with extensions) of your original return for your tax year in which the foreign tax redetermination occurred. 2011 1040 form There is no limit on the time the IRS has to redetermine and assess the correct U. 2011 1040 form S. 2011 1040 form tax due. 2011 1040 form If you pay more foreign tax than you originally claimed a credit for, you have 10 years to file a claim for refund of U. 2011 1040 form S. 2011 1040 form taxes. 2011 1040 form See Time Limit on Refund Claims , later. 2011 1040 form   Exceptions to this due date are explained in the next two paragraphs. 2011 1040 form Multiple redeterminations of U. 2011 1040 form S. 2011 1040 form tax liability for same tax year. 2011 1040 form   Where more than one foreign tax redetermination requires a redetermination of U. 2011 1040 form S. 2011 1040 form tax liability for the same tax year and those redeterminations occur in the same tax year or within two consecutive tax years, you can file for that tax year one notification (Form 1040X with a Form 1116 and the required statement) that reflects all those tax redeterminations. 2011 1040 form If you choose to file one notification, the due date for that notification is the due date of the original return (with extensions) for the year in which the first foreign tax redetermination that reduced your foreign tax liability occurred. 2011 1040 form However, foreign tax redeterminations with respect to the tax year for which a redetermination of U. 2011 1040 form S. 2011 1040 form tax liability is required may occur after the due date for providing that notification. 2011 1040 form In this situation, you may have to file more than one Form 1040X for that tax year. 2011 1040 form Additional U. 2011 1040 form S. 2011 1040 form tax due eliminated by foreign tax credit carryback or carryover. 2011 1040 form   If a foreign tax redetermination requires a redetermination of U. 2011 1040 form S. 2011 1040 form tax liability that would otherwise result in an additional amount of U. 2011 1040 form S. 2011 1040 form tax due, but the additional tax is eliminated by a carryback or carryover of an unused foreign tax, you do not have to amend your tax return for the year affected by the redetermination. 2011 1040 form Instead, you can notify the IRS by attaching a statement to the original return for the tax year in which the foreign tax redetermination occurred. 2011 1040 form You must file the statement by the due date (with extensions) of that return. 2011 1040 form The statement must show the amount of the unused foreign taxes paid or accrued and a detailed schedule showing the computation of the carryback or carryover (including the amounts carried back or over to the year for which a redetermination on U. 2011 1040 form S. 2011 1040 form tax liability is required). 2011 1040 form Failure-to-notify penalty. 2011 1040 form   If you fail to notify the IRS of a foreign tax redetermination and cannot show reasonable cause for the failure, you may have to pay a penalty. 2011 1040 form   For each month, or part of a month, that the failure continues, you pay a penalty of 5% of the tax due resulting from a redetermination of your U. 2011 1040 form S. 2011 1040 form tax. 2011 1040 form This penalty cannot be more than 25% of the tax due. 2011 1040 form Foreign tax refund. 2011 1040 form   If you receive a foreign tax refund without interest from the foreign government, you will not have to pay interest on the amount of tax due resulting from the adjustment to your U. 2011 1040 form S. 2011 1040 form tax for the time before the date of the refund. 2011 1040 form   However, if you receive a foreign tax refund with interest, you must pay interest to the IRS up to the amount of the interest paid to you by the foreign government. 2011 1040 form The interest you must pay cannot be more than the interest you would have had to pay on taxes that were unpaid for any other reason for the same period. 2011 1040 form Interest also is owed from the time you receive a refund until you pay the additional tax due. 2011 1040 form Foreign tax imposed on foreign refund. 2011 1040 form   If your foreign tax refund is taxed by the foreign country, you cannot take a separate credit or deduction for this additional foreign tax. 2011 1040 form However, when you refigure the foreign tax credit taken for the original foreign tax, reduce the amount of the refund by the foreign tax paid on the refund. 2011 1040 form Example. 2011 1040 form You paid a foreign income tax of $3,000 in 2011, and received a foreign tax refund of $500 in 2013 on which a foreign tax of $100 was imposed. 2011 1040 form When you refigure your credit for 2011, you must reduce the $3,000 you paid by $400. 2011 1040 form Time Limit on Refund Claims You have 10 years to file a claim for refund of U. 2011 1040 form S. 2011 1040 form tax if you find that you paid or accrued a larger foreign tax than you claimed a credit for. 2011 1040 form The 10-year period begins the day after the regular due date for filing the return (without extensions) for the year in which the taxes were actually paid or accrued. 2011 1040 form You have 10 years to file your claim regardless of whether you claim the credit for taxes paid or taxes accrued. 2011 1040 form The 10-year period applies to claims for refund or credit based on: Fixing math errors in figuring qualified foreign taxes, Reporting qualified foreign taxes not originally reported on the return, or Any other change in the size of the credit (including one caused by correcting the foreign tax credit limit). 2011 1040 form The special 10-year period also applies to making or changing your choice to claim a deduction or credit for foreign taxes. 2011 1040 form See Making or Changing Your Choice discussed earlier under Choosing To Take Credit or Deduction. 2011 1040 form Who Can Take the Credit? U. 2011 1040 form S. 2011 1040 form citizens, resident aliens, and nonresident aliens who paid foreign income tax and are subject to U. 2011 1040 form S. 2011 1040 form tax on foreign source income may be able to take a foreign tax credit. 2011 1040 form U. 2011 1040 form S. 2011 1040 form Citizens If you are a U. 2011 1040 form S. 2011 1040 form citizen, you are taxed by the United States on your worldwide income wherever you live. 2011 1040 form You are normally entitled to take a credit for foreign taxes you pay or accrue. 2011 1040 form Resident Aliens If you are a resident alien of the United States, you can take a credit for foreign taxes subject to the same general rules as U. 2011 1040 form S. 2011 1040 form citizens. 2011 1040 form If you are a bona fide resident of Puerto Rico for the entire tax year, you also come under the same rules. 2011 1040 form Usually, you can take a credit only for those foreign taxes imposed on income you actually or constructively received while you had resident alien status. 2011 1040 form For information on alien status, see Publication 519. 2011 1040 form Nonresident Aliens If you are a nonresident alien, you cannot take the credit in most cases. 2011 1040 form However, you may be able to take the credit if: You were a bona fide resident of Puerto Rico during your entire tax year, or You pay or accrue tax to a foreign country or U. 2011 1040 form S. 2011 1040 form possession on income from foreign sources that is effectively connected with a trade or business in the United States. 2011 1040 form But if you must pay tax to a foreign country or U. 2011 1040 form S. 2011 1040 form possession on income from U. 2011 1040 form S. 2011 1040 form sources only because you are a citizen or a resident of that country or U. 2011 1040 form S. 2011 1040 form possession, do not use that tax in figuring the amount of your credit. 2011 1040 form For information on alien status and effectively connected income, see Publication 519. 2011 1040 form What Foreign Taxes Qualify for the Credit? In most cases, the following four tests must be met for any foreign tax to qualify for the credit. 2011 1040 form The tax must be imposed on you. 2011 1040 form You must have paid or accrued the tax. 2011 1040 form The tax must be the legal and actual foreign tax liability. 2011 1040 form The tax must be an income tax (or a tax in lieu of an income tax). 2011 1040 form Certain foreign taxes do not qualify for the credit even if the four tests are met. 2011 1040 form See Foreign Taxes for Which You Cannot Take a Credit, later. 2011 1040 form Tax Must Be Imposed on You You can claim a credit only for foreign taxes that are imposed on you by a foreign country or U. 2011 1040 form S. 2011 1040 form possession. 2011 1040 form For example, a tax that is deducted from your wages is considered to be imposed on you. 2011 1040 form You cannot shift the right to claim the credit by contract or other means. 2011 1040 form Foreign country. 2011 1040 form   A foreign country includes any foreign state and its political subdivisions. 2011 1040 form Income, war profits, and excess profits taxes paid or accrued to a foreign city or province qualify for the foreign tax credit. 2011 1040 form U. 2011 1040 form S. 2011 1040 form possessions. 2011 1040 form   For foreign tax credit purposes, all qualified taxes paid to U. 2011 1040 form S. 2011 1040 form possessions are considered foreign taxes. 2011 1040 form For this purpose, U. 2011 1040 form S. 2011 1040 form possessions include Puerto Rico and American Samoa. 2011 1040 form   When the term “foreign country” is used in this publication, it includes U. 2011 1040 form S. 2011 1040 form possessions unless otherwise stated. 2011 1040 form You Must Have Paid or Accrued the Tax In most cases, you can claim the credit only if you paid or accrued the foreign tax to a foreign country or U. 2011 1040 form S. 2011 1040 form possession. 2011 1040 form However, the paragraphs that follow describe some instances in which you can claim the credit even if you did not directly pay or accrue the tax yourself. 2011 1040 form Joint return. 2011 1040 form   If you file a joint return, you can claim the credit based on the total foreign income taxes paid or accrued by you and your spouse. 2011 1040 form Combined income. 2011 1040 form   If foreign tax is imposed on the combined income of two or more persons (for example, spouses), the tax is allocated among, and considered paid by, these persons on a pro rata basis in proportion to each person's portion of the combined income, as determined under foreign law and Regulations section 1. 2011 1040 form 901-2(f)(3)(iii). 2011 1040 form Combined income with respect to each foreign tax that is imposed on a combined basis (and combined income subject to tax exemption or preferential tax rates) is computed separately, and the tax on that combined income is allocated separately. 2011 1040 form   These rules apply to foreign taxes paid or accrued in tax years beginning after February 14, 2012. 2011 1040 form However, you can choose to apply the new rules to foreign taxes paid or accrued in tax years beginning after December 31, 2010, and before February 15, 2012. 2011 1040 form For more details, see paragraphs (f) and (h) of Regulations section 1. 2011 1040 form 901-2. 2011 1040 form For similar rules applicable to prior tax years, see Regulations section 1. 2011 1040 form 901-2 (revised as of April 1, 2011). 2011 1040 form Example. 2011 1040 form You and your spouse reside in Country X, which imposes income tax on your combined incomes. 2011 1040 form Both of you use the “u” as your functional currency. 2011 1040 form Country X apportions tax based on income. 2011 1040 form You had income of 30,000u and your spouse had income of 20,000u. 2011 1040 form Your filing status on your U. 2011 1040 form S. 2011 1040 form income tax return is married filing separately. 2011 1040 form You can claim only 60% (30,000u/50,000u) of the foreign taxes imposed on your income on your U. 2011 1040 form S income tax return. 2011 1040 form Your spouse can claim only 40% (20,000u/50,000u). 2011 1040 form Partner or S corporation shareholder. 2011 1040 form   If you are a member of a partnership, or a shareholder in an S corporation, you can claim the credit based on your proportionate share of the foreign income taxes paid or accrued by the partnership or the S corporation. 2011 1040 form These amounts will be shown on the Schedule K-1 you receive from the partnership or S corporation. 2011 1040 form However, if you are a shareholder in an S corporation that in turn owns stock in a foreign corporation, you cannot claim a credit for your share of foreign taxes paid by the foreign corporation. 2011 1040 form Beneficiary. 2011 1040 form   If you are a beneficiary of an estate or trust, you may be able to claim the credit based on your proportionate share of foreign income taxes paid or accrued by the estate or trust. 2011 1040 form This amount will be shown on the Schedule K-1 you receive from the estate or trust. 2011 1040 form However, you must show that the tax was imposed on income of the estate and not on income received by the decedent. 2011 1040 form Mutual fund shareholder. 2011 1040 form   If you are a shareholder of a mutual fund or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. 2011 1040 form You should receive from the mutual fund or other RIC a Form 1099-DIV, or similar statement, showing your share of the foreign income, and your share of the foreign taxes paid. 2011 1040 form If you do not receive this information, you will need to contact the fund. 2011 1040 form Controlled foreign corporation shareholder. 2011 1040 form   If you are a shareholder of a controlled foreign corporation and choose to be taxed at corporate rates on the amount you must include in gross income from that corporation, you can claim the credit based on your share of foreign taxes paid or accrued by the controlled foreign corporation. 2011 1040 form If you make this election, you must claim the credit by filing Form 1118, Foreign Tax Credit—Corporations. 2011 1040 form Controlled foreign corporation. 2011 1040 form   A controlled foreign corporation is a foreign corporation in which U. 2011 1040 form S. 2011 1040 form shareholders own more than 50% of the voting power or value of the stock. 2011 1040 form You are considered a U. 2011 1040 form S. 2011 1040 form shareholder if you own, directly or indirectly, 10% or more of the total voting power of all classes of the foreign corporation's stock. 2011 1040 form See Internal Revenue Code sections 951(b) and 958(b) for more information. 2011 1040 form Tax Must Be the Legal and Actual Foreign Tax Liability The amount of foreign tax that qualifies is not necessarily the amount of tax withheld by the foreign country. 2011 1040 form Only the legal and actual foreign tax liability that you paid or accrued during the year qualifies for the credit. 2011 1040 form Foreign tax refund. 2011 1040 form   You cannot take a foreign tax credit for income taxes paid to a foreign country if it is reasonably certain the amount would be refunded, credited, rebated, abated, or forgiven if you made a claim. 2011 1040 form   For example, the United States has tax treaties with many countries allowing U. 2011 1040 form S. 2011 1040 form citizens and residents reductions in the rates of tax of those foreign countries. 2011 1040 form However, some treaty countries require U. 2011 1040 form S. 2011 1040 form citizens and residents to pay the tax figured without regard to the lower treaty rates and then claim a refund for the amount by which the tax actually paid is more than the amount of tax figured using the lower treaty rate. 2011 1040 form The qualified foreign tax is the amount figured using the lower treaty rate and not the amount actually paid, because the excess tax is refundable. 2011 1040 form Subsidy received. 2011 1040 form   Tax payments a foreign country returns to you in the form of a subsidy do not qualify for the foreign tax credit. 2011 1040 form This rule applies even if the subsidy is given to a person related to you, or persons who participated with you in a transaction or a related transaction. 2011 1040 form A subsidy can be provided by any means but must be determined, directly or indirectly, in relation to the amount of tax, or to the base used to figure the tax. 2011 1040 form   The term “subsidy” includes any type of benefit. 2011 1040 form Some ways of providing a subsidy are refunds, credits, deductions, payments, or discharges of obligations. 2011 1040 form Shareholder receiving refund for corporate tax in integrated system. 2011 1040 form   Under some foreign tax laws and treaties, a shareholder is considered to have paid part of the tax that is imposed on the corporation. 2011 1040 form You may be able to claim a refund of these taxes from the foreign government. 2011 1040 form You must include the refund (including any amount withheld) in your income in the year received. 2011 1040 form Any tax withheld from the refund is a qualified foreign tax. 2011 1040 form Example. 2011 1040 form You are a shareholder of a French corporation. 2011 1040 form You receive a $100 refund of the tax paid to France by the corporation on the earnings distributed to you as a dividend. 2011 1040 form The French government imposes a 15% withholding tax ($15) on the refund you received. 2011 1040 form You receive a check for $85. 2011 1040 form You include $100 in your income. 2011 1040 form The $15 of tax withheld is a qualified foreign tax. 2011 1040 form Tax Must Be an Income Tax (or Tax in Lieu of Income Tax) In most cases, only income, war profits, and excess profits taxes (income taxes) qualify for the foreign tax credit. 2011 1040 form Foreign taxes on wages, dividends, interest, and royalties qualify for the credit in most cases. 2011 1040 form Furthermore, foreign taxes on income can qualify even though they are not imposed under an income tax law if the tax is in lieu of an income, war profits, or excess profits tax. 2011 1040 form See Taxes in Lieu of Income Taxes , later. 2011 1040 form Income Tax Simply because the levy is called an income tax by the foreign taxing authority does not make it an income tax for this purpose. 2011 1040 form A foreign levy is an income tax only if it meets both of the following requirements. 2011 1040 form It is a tax; that is, you have to pay it and you get no specific economic benefit (discussed below) from paying it. 2011 1040 form The predominant character of the tax is that of an income tax in the U. 2011 1040 form S. 2011 1040 form sense. 2011 1040 form A foreign levy may meet these requirements even if the foreign tax law differs from U. 2011 1040 form S. 2011 1040 form tax law. 2011 1040 form The foreign law may include in income items that U. 2011 1040 form S. 2011 1040 form law does not include, or it may allow certain exclusions or deductions that U. 2011 1040 form S. 2011 1040 form law does not allow. 2011 1040 form Specific economic benefit. 2011 1040 form   In most cases, you get a specific economic benefit if you receive, or are considered to receive, an economic benefit from the foreign country imposing the levy, and: If there is a generally imposed income tax, the economic benefit is not available on substantially the same terms to all persons subject to the income tax, or If there is no generally imposed income tax, the economic benefit is not available on substantially the same terms to the population of the foreign country in general. 2011 1040 form   You are considered to receive a specific economic benefit if you have a business transaction with a person who receives a specific economic benefit from the foreign country and, under the terms and conditions of the transaction, you receive directly or indirectly all or part of the benefit. 2011 1040 form   However, see the exception discussed later under Pension, unemployment, and disability fund payments . 2011 1040 form Economic benefits. 2011 1040 form   Economic benefits include the following. 2011 1040 form Goods. 2011 1040 form Services. 2011 1040 form Fees or other payments. 2011 1040 form Rights to use, acquire, or extract resources, patents, or other property the foreign country owns or controls. 2011 1040 form Discharges of contractual obligations. 2011 1040 form   In most cases, the right or privilege merely to engage in business is not an economic benefit. 2011 1040 form Dual-capacity taxpayers. 2011 1040 form   If you are subject to a foreign country's levy and you also receive a specific economic benefit from that foreign country, you are a “dual-capacity taxpayer. 2011 1040 form ” As a dual-capacity taxpayer, you cannot claim a credit for any part of the foreign levy, unless you establish that the amount paid under a distinct element of the foreign levy is a tax, rather than a compulsory payment for a direct or indirect specific economic benefit. 2011 1040 form    For more information on how to establish amounts paid under separate elements of a levy, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Pension, unemployment, and disability fund payments. 2011 1040 form   A foreign tax imposed on an individual to pay for retirement, old-age, death, survivor, unemployment, illness, or disability benefits, or for substantially similar purposes, is not payment for a specific economic benefit if the amount of the tax does not depend on the age, life expectancy, or similar characteristics of that individual. 2011 1040 form    No deduction or credit is allowed, however, for social security taxes paid or accrued to a foreign country with which the United States has a social security agreement. 2011 1040 form For more information about these agreements, see Publication 54. 2011 1040 form Soak-up taxes. 2011 1040 form   A foreign tax is not predominantly an income tax and does not qualify for credit to the extent it is a soak-up tax. 2011 1040 form A tax is a soak-up tax to the extent that liability for it depends on the availability of a credit for it against income tax imposed by another country. 2011 1040 form This rule applies only if and to the extent that the foreign tax would not be imposed if the credit were not available. 2011 1040 form Penalties and interest. 2011 1040 form   Amounts paid to a foreign government to satisfy a liability for interest, fines, penalties, or any similar obligation are not taxes and do not qualify for the credit. 2011 1040 form Taxes not based on income. 2011 1040 form   Foreign taxes based on gross receipts or the number of units produced, rather than on realized net income, do not qualify unless they are imposed in lieu of an income tax, as discussed next. 2011 1040 form Taxes based on assets, such as property taxes, do not qualify for the credit. 2011 1040 form Taxes in Lieu of Income Taxes A tax paid or accrued to a foreign country qualifies for the credit if it is imposed in lieu of an income tax otherwise generally imposed. 2011 1040 form A foreign levy is a tax in lieu of an income tax only if: It is not payment for a specific economic benefit as discussed earlier, and The tax is imposed in place of, and not in addition to, an income tax otherwise generally imposed. 2011 1040 form A tax in lieu of an income tax does not have to be based on realized net income. 2011 1040 form A foreign tax imposed on gross income, gross receipts or sales, or the number of units produced or exported can qualify for the credit. 2011 1040 form In most cases, a soak-up tax (discussed earlier) does not qualify as a tax in lieu of an income tax. 2011 1040 form However, if the foreign country imposes a soak-up tax in lieu of an income tax, the amount that does not qualify for foreign tax credit is the lesser of the following amounts. 2011 1040 form The soak-up tax. 2011 1040 form The foreign tax you paid that is more than the amount you would have paid if you had been subject to the generally imposed income tax. 2011 1040 form Foreign Taxes for Which You Cannot Take a Credit This part discusses the foreign taxes for which you cannot take a credit. 2011 1040 form These are: Taxes on excluded income, Taxes for which you can only take an itemized deduction, Taxes on foreign mineral income, Taxes from international boycott operations, A portion of taxes on combined foreign oil and gas income, Taxes of U. 2011 1040 form S. 2011 1040 form persons controlling foreign corporations and partnerships who fail to file required information returns, and Taxes related to a foreign tax splitting event. 2011 1040 form Taxes on Excluded Income You cannot take a credit for foreign taxes paid or accrued on certain income that is excluded from U. 2011 1040 form S. 2011 1040 form gross income. 2011 1040 form Foreign Earned Income and Housing Exclusions You must reduce your foreign taxes available for the credit by the amount of those taxes paid or accrued on income that is excluded from U. 2011 1040 form S. 2011 1040 form income under the foreign earned income exclusion or the foreign housing exclusion. 2011 1040 form See Publication 54 for more information on the foreign earned income and housing exclusions. 2011 1040 form Wages completely excluded. 2011 1040 form   If your wages are completely excluded, you cannot take a credit for any of the foreign taxes paid or accrued on these wages. 2011 1040 form Wages partly excluded. 2011 1040 form   If only part of your wages is excluded, you cannot take a credit for the foreign income taxes allocable to the excluded part. 2011 1040 form You find the amount allocable to your excluded wages by multiplying the foreign tax paid or accrued on foreign earned income received or accrued during the tax year by a fraction. 2011 1040 form   The numerator of the fraction is your foreign earned income and housing amounts excluded under the foreign earned income and housing exclusions for the tax year minus otherwise deductible expenses definitely related and properly apportioned to that income. 2011 1040 form Deductible expenses do not include the foreign housing deduction. 2011 1040 form   The denominator is your total foreign earned income received or accrued during the tax year minus all deductible expenses allocable to that income (including the foreign housing deduction). 2011 1040 form If the foreign law taxes foreign earned income and some other income (for example, earned income from U. 2011 1040 form S. 2011 1040 form sources or a type of income not subject to U. 2011 1040 form S. 2011 1040 form tax), and the taxes on the other income cannot be segregated, the denominator of the fraction is the total amount of income subject to the foreign tax minus deductible expenses allocable to that income. 2011 1040 form Example. 2011 1040 form You are a U. 2011 1040 form S. 2011 1040 form citizen and a cash basis taxpayer, employed by Company X and living in Country A. 2011 1040 form Your records show the following: Foreign earned income received $125,000 Unreimbursed business travel expenses 20,000 Income tax paid to Country A 30,000 Exclusion of foreign earned  income and housing allowance 97,600     Because you can exclude part of your wages, you cannot claim a credit for part of the foreign taxes. 2011 1040 form To find that part, do the following. 2011 1040 form First, find the amount of business expenses allocable to excluded wages and therefore not deductible. 2011 1040 form To do this, multiply the otherwise deductible expenses by a fraction. 2011 1040 form That fraction is the excluded wages over your foreign earned income. 2011 1040 form   $20,000 × $97,600 $125,000 = $15,616             Next, find the numerator of the fraction by which you will multiply the foreign taxes paid. 2011 1040 form To do this, subtract business expenses allocable to excluded wages ($15,616) from excluded wages ($97,600). 2011 1040 form The result is $81,984. 2011 1040 form Then, find the denominator of the fraction by subtracting all your deductible expenses from all your foreign earned income ($125,000 − $20,000 = $105,000). 2011 1040 form Finally, multiply the foreign tax you paid by the resulting fraction. 2011 1040 form   $30,000 × $81,984  $105,000 = $23,424 The amount of Country A tax you cannot take a credit for is $23,424. 2011 1040 form Taxes on Income From Puerto Rico Exempt From U. 2011 1040 form S. 2011 1040 form Tax If you have income from Puerto Rican sources that is not taxable, you must reduce your foreign taxes paid or accrued by the taxes allocable to the exempt income. 2011 1040 form For information on figuring the reduction, see Publication 570. 2011 1040 form Possession Exclusion If you are a bona fide resident of American Samoa and exclude income from sources in American Samoa, you cannot take a credit for the taxes you pay or accrue on the excluded income. 2011 1040 form For more information on this exclusion, see Publication 570. 2011 1040 form Extraterritorial Income Exclusion You cannot take a credit for taxes you pay on qualifying foreign trade income excluded on Form 8873, Extraterritorial Income Exclusion. 2011 1040 form However, see Internal Revenue Code section 943(d) for an exception for certain withholding taxes. 2011 1040 form Taxes for Which You Can Only Take an Itemized Deduction You cannot claim a foreign tax credit for foreign income taxes paid or accrued under the following circumstances. 2011 1040 form However, you can claim an itemized deduction for these taxes. 2011 1040 form See Choosing To Take Credit or Deduction , earlier. 2011 1040 form Taxes Imposed By Sanctioned Countries (Section 901(j) Income) You cannot claim a foreign tax credit for income taxes paid or accrued to any country if the income giving rise to the tax is for a period (the sanction period) during which: The Secretary of State has designated the country as one that repeatedly provides support for acts of international terrorism, The United States has severed or does not conduct diplomatic relations with the country, or The United States does not recognize the country's government, and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act. 2011 1040 form The following countries meet this description for 2013. 2011 1040 form Income taxes paid or accrued to these countries in 2013 do not qualify for the credit. 2011 1040 form Cuba. 2011 1040 form Iran. 2011 1040 form Libya (but see Note later). 2011 1040 form North Korea. 2011 1040 form Sudan. 2011 1040 form Syria. 2011 1040 form Waiver of denial of the credit. 2011 1040 form   A waiver can be granted to a sanctioned country if the President of the United States determines that granting the waiver is in the national interest of the United States and will expand trade and investment opportunities for U. 2011 1040 form S. 2011 1040 form companies in the sanctioned country. 2011 1040 form The President must report to Congress his intentions to grant the waiver and his reasons for granting the waiver not less than 30 days before the date on which the waiver is granted. 2011 1040 form Note. 2011 1040 form Effective December 10, 2004, the President granted a waiver to Libya. 2011 1040 form Income taxes arising on or after this date qualify for the credit if they meet the other requirements in this publication. 2011 1040 form Limit on credit. 2011 1040 form   In figuring the foreign tax credit limit, discussed later, income from a sanctioned country is a separate category of foreign income unless a Presidential waiver is granted. 2011 1040 form You must fill out a separate Form 1116 for this income. 2011 1040 form This will prevent you from claiming a credit for foreign taxes paid or accrued to the sanctioned country. 2011 1040 form Example. 2011 1040 form You lived and worked in Iran until August, when you were transferred to Italy. 2011 1040 form You paid taxes to each country on the income earned in that country. 2011 1040 form You cannot claim a foreign tax credit for the foreign taxes paid on the income earned in Iran. 2011 1040 form Because the income earned in Iran is a separate category of foreign income, you must fill out a separate Form 1116 for that income. 2011 1040 form You cannot take a credit for taxes paid on the income earned in Iran, but that income is taxable by the United States. 2011 1040 form Figuring the credit when a sanction ends. 2011 1040 form    Table 1 lists the countries for which sanctions have ended or for which a Presidential waiver has been granted. 2011 1040 form For any of these countries, you can claim a foreign tax credit for the taxes paid or accrued to that country on the income for the period that begins after the end of the sanction period or the date the Presidential waiver was granted. 2011 1040 form Example. 2011 1040 form The sanctions against Country X ended on July 31. 2011 1040 form On August 19, you receive a distribution from a mutual fund of Country X income. 2011 1040 form The fund paid Country X income tax for you on the distribution. 2011 1040 form Because the distribution was made after the sanction ended, you may include the foreign tax paid on the distribution to compute your foreign tax credit. 2011 1040 form Amounts for the nonsanctioned period. 2011 1040 form   If a sanction period ends (or a Presidential waiver is granted) during your tax year and you are not able to determine the actual income and taxes for that period, you can allocate amounts to that period based on the number of days in the period that fall in your tax year. 2011 1040 form Multiply the income or taxes for the year by the following fraction to determine the amounts allocable to that period. 2011 1040 form   Number of nonsanctioned days in year  Number of days in year Example. 2011 1040 form You are a calendar year filer and received $20,000 of income from Country X in 2013 on which you paid tax of $4,500. 2011 1040 form Sanctions against Country X ended on July 11, 2013. 2011 1040 form You are unable to determine how much of the income or tax is for the nonsanctioned period. 2011 1040 form Because your tax year starts on January 1, and the Country X sanction ended on July 11, 2013, 173 days of your tax year are in the nonsanctioned period. 2011 1040 form You would compute the income for the nonsanctioned period as follows. 2011 1040 form 173 365 × $20,000 = $9,479             You would figure the tax for the nonsanctioned period as follows. 2011 1040 form 173 365 × $4,500 = $2,133 To figure your foreign tax credit, you would use $9,479 as the income from Country X and $2,133 as the tax. 2011 1040 form Further information. 2011 1040 form   The rules for figuring the foreign tax credit after a country's sanction period ends are more fully explained in Revenue Ruling 92-62, Cumulative Bulletin 1992-2, page 193. 2011 1040 form This Cumulative Bulletin can be found in many libraries and IRS offices. 2011 1040 form Table 1. 2011 1040 form Countries Removed From the Sanction List or Granted Presidential Waiver   Sanction Period Country Starting Date Ending Date Iraq February 1, 1991 June 27, 2004 Libya January 1, 1987 December 9, 2004* *Presidential waiver granted for qualified income taxes arising after December 9, 2004. 2011 1040 form Taxes Imposed on Certain Dividends You cannot claim a foreign tax credit for withholding tax (defined later ) on dividends paid or accrued if either of the following applies to the dividends. 2011 1040 form The dividends are on stock you held for less than 16 days during the 31-day period that begins 15 days before the ex-dividend date (defined later). 2011 1040 form The dividends are for a period or periods totaling more than 366 days on preferred stock you held for less than 46 days during the 91-day period that begins 45 days before the ex-dividend date. 2011 1040 form If the dividend is not for more than 366 days, rule (1) applies to the preferred stock. 2011 1040 form When figuring how long you held the stock, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. 2011 1040 form Regardless of how long you held the stock, you cannot claim the credit to the extent you have an obligation under a short sale or otherwise to make payments related to the dividend for positions in substantially similar or related property. 2011 1040 form Withholding tax. 2011 1040 form   For this purpose, withholding tax includes any tax determined on a gross basis. 2011 1040 form It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. 2011 1040 form Ex-dividend date. 2011 1040 form   The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. 2011 1040 form Example 1. 2011 1040 form You bought common stock from a foreign corporation on November 3. 2011 1040 form You sold the stock on November 19. 2011 1040 form You received a dividend on this stock because you owned it on the ex-dividend date of November 5. 2011 1040 form To claim the credit, you must have held the stock for at least 16 days within the 31-day period that began on October 21 (15 days before the ex-dividend date). 2011 1040 form Because you held the stock for 16 days, from November 4 until November 19, you are entitled to the credit. 2011 1040 form Example 2. 2011 1040 form The facts are the same as in Example 1 except that you sold the stock on November 14. 2011 1040 form You held the stock for only 11 days. 2011 1040 form You are not entitled to the credit. 2011 1040 form Exception. 2011 1040 form   If you are a securities dealer who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes paid on dividends regardless of how long you held the stock or whether you were obligated to make payments for positions in substantially similar or related property. 2011 1040 form See section 901(k)(4) of the Internal Revenue Code for more information. 2011 1040 form Taxes Withheld on Income or Gain (Other Than Dividends) For income or gain (other than dividends) paid or accrued on property, you cannot claim a foreign tax credit for withholding tax (defined later): If you have not held the property for at least 16 days during the 31-day period that begins 15 days before the date on which the right to receive the payment arises, or To the extent you have to make related payments on positions in substantially similar or related property. 2011 1040 form When figuring how long you held the property, count the day you sold it, but do not count the day you acquired it or any days on which you were protected from risk of loss. 2011 1040 form Withholding tax. 2011 1040 form   For this purpose, withholding tax includes any tax determined on a gross basis. 2011 1040 form It does not include any tax which is in the nature of a prepayment of a tax imposed on a net basis. 2011 1040 form Exception for dealers. 2011 1040 form   If you are a dealer in property who actively conducts business in a foreign country, you may be able to claim a foreign tax credit for qualified taxes withheld on income or gain from that property regardless of how long you held it or whether you have to make related payments on positions in substantially similar or related property. 2011 1040 form See section 901(I)(2) of the Internal Revenue Code for more information. 2011 1040 form Covered Asset Acquisition ???You cannot take a credit for the disqualified portion of any foreign tax paid or accrued in connection with a covered asset acquisition. 2011 1040 form A covered asset acquisition includes certain acquisitions that result in a stepped-up basis for U. 2011 1040 form S. 2011 1040 form tax purposes but not for foreign tax purposes. 2011 1040 form For more information, see Internal Revenue Code section 901(m). 2011 1040 form The IRS intends to issue guidance that will explain this provision in greater detail. 2011 1040 form Taxes in Connection With the Purchase or Sale of Oil or Gas You cannot claim a foreign tax credit for taxes paid or accrued to a foreign country in connection with the purchase or sale of oil or gas extracted in that country if you do not have an economic interest in the oil or gas, and the purchase price or sales price is different from the fair market value of the oil or gas at the time of purchase or sale. 2011 1040 form Taxes on Foreign Mineral Income You must reduce any taxes paid or accrued to a foreign country or possession on mineral income from that country or possession if you were allowed a deduction for percentage depletion for any part of the mineral income. 2011 1040 form For details, see Regulations section 1. 2011 1040 form 901-3. 2011 1040 form Taxes From International Boycott Operations If you participate in or cooperate with an international boycott during the tax year, your foreign taxes resulting from boycott activities will reduce the total taxes available for credit. 2011 1040 form See the instructions for line 12 in the Form 1116 instructions to figure this reduction. 2011 1040 form In most cases, this rule does not apply to employees with wages who are working and living in boycotting countries, or to retirees with pensions who are living in these countries. 2011 1040 form List of boycotting countries. 2011 1040 form   A list of the countries which may require participation in or cooperation with an international boycott is published by the Department of the Treasury. 2011 1040 form As of November 2013, the following countries are listed. 2011 1040 form Iraq. 2011 1040 form Kuwait. 2011 1040 form Lebanon. 2011 1040 form Libya. 2011 1040 form Qatar. 2011 1040 form Saudi Arabia. 2011 1040 form Syria. 2011 1040 form United Arab Emirates. 2011 1040 form Yemen. 2011 1040 form    For information concerning changes to the list, write to: Internal Revenue Service International Section Philadelphia, PA 19255-0725 Determinations of whether the boycott rule applies. 2011 1040 form   You may request a determination from the Internal Revenue Service as to whether a particular operation constitutes participation in or cooperation with an international boycott. 2011 1040 form The procedures for obtaining a determination from the Service are outlined in Revenue Procedure 77-9 in Cumulative Bulletin 1977-1. 2011 1040 form Cumulative Bulletins are available in most IRS offices and you are welcome to read them there. 2011 1040 form Public inspection. 2011 1040 form   A determination and any related background file is open to public inspection. 2011 1040 form However, your identity and certain other information will remain confidential. 2011 1040 form Reporting requirements. 2011 1040 form   You must file a report with the IRS if you or any of the following persons have operations in or related to a boycotting country or with the government, a company, or a national of a boycotting country. 2011 1040 form A foreign corporation in which you own 10% or more of the voting power of all voting stock but only if you own the stock of the foreign corporation directly or through foreign entities. 2011 1040 form A partnership in which you are a partner. 2011 1040 form A trust you are treated as owning. 2011 1040 form Form 5713 required. 2011 1040 form   If you have to file a report, you must use Form 5713, International Boycott Report, and attach all supporting schedules. 2011 1040 form See the Instructions for Form 5713 for information on when and where to file the form. 2011 1040 form Penalty for failure to file. 2011 1040 form   If you willfully fail to make a report, in addition to other penalties, you may be fined $25,000 or imprisoned for no more than one year, or both. 2011 1040 form Taxes on Combined Foreign Oil and Gas Income You must reduce your foreign taxes by a portion of any foreign taxes imposed on combined foreign oil and gas income. 2011 1040 form The amount of the reduction is the amount by which your foreign oil and gas taxes exceed the amount of your combined foreign oil and gas income multiplied by a fraction equal to your pre-credit U. 2011 1040 form S. 2011 1040 form tax liability (Form 1040, line 44) divided by your worldwide taxable income. 2011 1040 form You may be entitled to carry over to other years taxes reduced under this rule. 2011 1040 form See Internal Revenue Code section 907(f). 2011 1040 form Combined foreign oil and gas income means the sum of foreign oil related income and foreign oil and gas extraction income. 2011 1040 form Foreign oil and gas taxes are the sum of foreign oil and gas extraction taxes and foreign oil related taxes. 2011 1040 form Taxes of U. 2011 1040 form S. 2011 1040 form Persons Controlling Foreign Corporations and Partnerships If you had control of a foreign corporation or a foreign partnership for the annual accounting period of that corporation or partnership that ended with or within your tax year, you may have to file an annual information return. 2011 1040 form If you do not file the required information return, you may have to reduce the foreign taxes that may be used for the foreign tax credit. 2011 1040 form See Penalty for not filing Form 5471 or Form 8865 , later. 2011 1040 form U. 2011 1040 form S. 2011 1040 form persons controlling foreign corporations. 2011 1040 form   If you are a U. 2011 1040 form S. 2011 1040 form citizen or resident who had control of a foreign corporation for an uninterrupted period of at least 30 days during the annual accounting period of that corporation, you may have to file an annual information return on Form 5471, Information Return of U. 2011 1040 form S. 2011 1040 form Persons With Respect To Certain Foreign Corporations. 2011 1040 form Under this rule, you generally had control of a foreign corporation if at any time during your tax year you owned: Stock possessing more than 50% of the total combined voting power of all classes of stock entitled to vote, or More than 50% of the total value of shares of all classes of stock of the foreign corporation. 2011 1040 form U. 2011 1040 form S. 2011 1040 form persons controlling foreign partnerships. 2011 1040 form   If you are a U. 2011 1040 form S. 2011 1040 form citizen or resident who had control of a foreign partnership at any time during the partnership's tax year, you may have to file