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Amended Tax Return Forms

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Amended Tax Return Forms

Amended tax return forms Part Two -   Excise Taxes Other Than Fuel Taxes Table of Contents 3. Amended tax return forms   Environmental TaxesOil Spill Liability Tax ODCs Imported Taxable Products Floor Stocks Tax 4. Amended tax return forms   Communications and Air Transportation TaxesUncollected Tax Report Communications TaxLocal-only service. Amended tax return forms Private communication service. Amended tax return forms Exemptions Credits or Refunds Air Transportation TaxesTransportation of Persons by Air International Air Travel Facilities Transportation of Property by Air Special Rules on Transportation Taxes 5. Amended tax return forms   Manufacturers TaxesImporter. Amended tax return forms Use considered sale. Amended tax return forms Lease considered sale. Amended tax return forms Bonus goods. Amended tax return forms Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. Amended tax return forms Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. Amended tax return forms CoalExported. Amended tax return forms Taxable TiresQualifying intercity or local bus. Amended tax return forms Qualifying school bus. Amended tax return forms Gas Guzzler TaxVehicles not subject to tax. Amended tax return forms Imported automobiles. Amended tax return forms VaccinesConditions to allowance. Amended tax return forms Taxable Medical Devices 6. Amended tax return forms   Retail Tax on Heavy Trucks, Trailers, and TractorsHighway vehicle. Amended tax return forms Vehicles not considered highway vehicles. Amended tax return forms Idling reduction device. Amended tax return forms Separate purchase. Amended tax return forms Leases. Amended tax return forms Exported vehicle. Amended tax return forms Tax on resale of tax-paid trailers and semitrailers. Amended tax return forms Use treated as sale. Amended tax return forms Sale. Amended tax return forms Long-term lease. Amended tax return forms Short-term lease. Amended tax return forms Related person. Amended tax return forms Exclusions from tax base. Amended tax return forms Sales not at arm's length. Amended tax return forms Installment sales. Amended tax return forms Repairs and modifications. Amended tax return forms Further manufacture. Amended tax return forms Rail trailers and rail vans. Amended tax return forms Parts and accessories. Amended tax return forms Trash containers. Amended tax return forms House trailers. Amended tax return forms Camper coaches or bodies for self-propelled mobile homes. Amended tax return forms Farm feed, seed, and fertilizer equipment. Amended tax return forms Ambulances and hearses. Amended tax return forms Truck-tractors. Amended tax return forms Concrete mixers. Amended tax return forms Registration requirement. Amended tax return forms Further manufacture. Amended tax return forms 7. Amended tax return forms   Ship Passenger Tax 8. Amended tax return forms   Foreign Insurance TaxesPremium. Amended tax return forms 9. Amended tax return forms   Obligations Not in Registered Form 10. Amended tax return forms   Indoor Tanning Services Tax 11. Amended tax return forms   Patient-Centered Outcomes Research Fee Prev  Up  Next   Home   More Online Publications
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Understanding Your CP19 Notice

We have increased the amount of tax you owe because we believe you incorrectly claimed one or more deductions or credits.


What you need to do

  • Review your notice and compare our changes to your tax return.
  • Complete and return the Response form.

You may want to...

  • Review this notice with your tax preparer.
  • Read about the deduction or credit in Publication 17.
  • Call us for clarification at the number listed on your notice.

Answers to Common Questions

What is the notice telling me?
Based on the information shown on your tax return, it appears you have not met the requirements for claiming one or more deductions or credits. As a result, your total tax is more than you expected.

What do I have to do?
Review the requirements for the deduction or credit we adjusted. Return the Response form indicating thereon your agreement or disagreement with the changes we made.

If you feel your tax return was correct as filed, send us the documentation listed on page 2 of the notice to verify you qualify for the exemption or credit.

If you agree with the changes we made, pay the amount due by the date requested on the notice.


Tips for next year

Consider filing your taxes electronically. Filing online can help you avoid mistakes and find credits and deductions that you may qualify for. In many cases you can file for free. Learn more about e-file.

Page Last Reviewed or Updated: 20-Feb-2014

Printable samples of this notice (PDF)


 

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
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  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Amended Tax Return Forms

Amended tax return forms 2. Amended tax return forms   Tax Shelters and Other Reportable Transactions Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Abusive Tax SheltersRules To Curb Abusive Tax Shelters Investor Reporting Penalties Whether To Invest Introduction Investments that yield tax benefits are sometimes called “tax shelters. Amended tax return forms ” In some cases, Congress has concluded that the loss of revenue is an acceptable side effect of special tax provisions designed to encourage taxpayers to make certain types of investments. Amended tax return forms In many cases, however, losses from tax shelters produce little or no benefit to society, or the tax benefits are exaggerated beyond those intended. Amended tax return forms Those cases are called “abusive tax shelters. Amended tax return forms ” An investment that is considered a tax shelter is subject to restrictions, including the requirement that it be disclosed, as discussed later. Amended tax return forms Topics - This chapter discusses: Abusive Tax Shelters , Rules To Curb Abusive Tax Shelters , Investor Reporting , Penalties , and Whether To Invest . Amended tax return forms Useful Items - You may want to see: Publication 538 Accounting Periods and Methods 556 Examination of Returns, Appeal Rights, and Claims for Refund 561 Determining the Value of Donated Property 925 Passive Activity and At-Risk Rules Form (and Instructions) 8275 Disclosure Statement 8275-R Regulation Disclosure Statement 8283 Noncash Charitable Contributions 8886 Reportable Transaction Disclosure Statement See chapter 5, How To Get Tax Help , for information about getting these publications and forms. Amended tax return forms Abusive Tax Shelters Abusive tax shelters are marketing schemes involving artificial transactions with little or no economic reality. Amended tax return forms They often make use of unrealistic allocations, inflated appraisals, losses in connection with nonrecourse loans, mismatching of income and deductions, financing techniques that do not conform to standard commercial business practices, or mischaracterization of the substance of the transaction. Amended tax return forms Despite appearances to the contrary, the taxpayer generally risks little. Amended tax return forms Abusive tax shelters commonly involve package deals designed from the start to generate losses, deductions, or credits that will be far more than present or future investment. Amended tax return forms Or, they may promise investors from the start that future inflated appraisals will enable them, for example, to reap charitable contribution deductions based on those appraisals. Amended tax return forms (But see the appraisal requirements discussed under Rules To Curb Abusive Tax Shelters , later. Amended tax return forms ) They are commonly marketed in terms of the ratio of tax deductions allegedly available to each dollar invested. Amended tax return forms This ratio (or “write-off”) is frequently said to be several times greater than one-to-one. Amended tax return forms Because there are many abusive tax shelters, it is not possible to list all the factors you should consider in determining whether an offering is an abusive tax shelter. Amended tax return forms However, you should ask the following questions, which might provide a clue to the abusive nature of the plan. Amended tax return forms Do the tax benefits far outweigh the economic benefits? Is this a transaction you would seriously consider, apart from the tax benefits, if you hoped to make a profit? Do shelter assets really exist and, if so, are they insured for less than their purchase price? Is there a nontax justification for the way profits and losses are allocated to partners? Do the facts and supporting documents make economic sense? In that connection, are there sales and resales of the tax shelter property at ever increasing prices? Does the investment plan involve a gimmick, device, or sham to hide the economic reality of the transaction? Does the promoter offer to backdate documents after the close of the year? Are you instructed to backdate checks covering your investment? Is your debt a real debt or are you assured by the promoter that you will never have to pay it? Does this transaction involve laundering United States source income through foreign corporations incorporated in a tax haven and owned by United States shareholders? Rules To Curb Abusive Tax Shelters Congress has enacted a series of income tax laws designed to halt the growth of abusive tax shelters. Amended tax return forms These provisions include the following. Amended tax return forms Disclosure of reportable transactions. Amended tax return forms   You must disclose information for each reportable transaction in which you participate. Amended tax return forms See Reportable Transaction Disclosure Statement , later. Amended tax return forms   Material advisors with respect to any reportable transaction must disclose information about the transaction on Form 8918, Material Advisor Disclosure Statement. Amended tax return forms To determine whether you are a material advisor to a transaction, see the Instructions for Form 8918. Amended tax return forms   Material advisors will receive a reportable transaction number for the disclosed reportable transaction. Amended tax return forms They must provide this number to all persons to whom they acted as a material advisor. Amended tax return forms They must provide the number at the time the transaction is entered into. Amended tax return forms If they do not have the number at that time, they must provide it within 60 days from the date the number is mailed to them. Amended tax return forms For information on penalties for failure to disclose and failure to maintain lists, see Internal Revenue Code sections 6707, 6707A, and 6708. Amended tax return forms Requirement to maintain list. Amended tax return forms   Material advisors must maintain a list of persons to whom they provide material aid, assistance, or advice on any reportable transaction. Amended tax return forms The list must be available for inspection by the IRS, and the information required to be included on the list generally must be kept for 7 years. Amended tax return forms See Regulations section 301. Amended tax return forms 6112-1 for more information (including what information is required to be included on the list). Amended tax return forms Confidentiality privilege. Amended tax return forms   The confidentiality privilege between you and a federally authorized tax practitioner does not apply to written communications made after October 21, 2004, regarding the promotion of your direct or indirect participation in any tax shelter. Amended tax return forms Appraisal requirement for donated property. Amended tax return forms   If you claim a deduction of more than $5,000 for an item or group of similar items of donated property, you generally must get a qualified appraisal from a qualified appraiser and complete and attach section B of Form 8283 to your return. Amended tax return forms If you claim a deduction of more than $500,000 for the donated property, you generally must attach the qualified appraisal to your return. Amended tax return forms If you file electronically, see Form 8453, U. Amended tax return forms S. Amended tax return forms Individual Income Tax Transmittal for an IRS e-file Return, and its instructions. Amended tax return forms For more information about appraisals, including exceptions, see Publication 561. Amended tax return forms Passive activity loss and credit limits. Amended tax return forms   The passive activity loss and credit rules limit the amount of losses and credits that can be claimed from passive activities and limit the amount that can offset nonpassive income, such as certain portfolio income from investments. Amended tax return forms For more detailed information about determining and reporting income, losses, and credits from passive activities, see Publication 925. Amended tax return forms Interest on penalties. Amended tax return forms   If you are assessed an accuracy-related or civil fraud penalty (as discussed under Penalties , later), interest will be imposed on the amount of the penalty from the due date of the return (including any extensions) to the date you pay the penalty. Amended tax return forms Accounting method restriction. Amended tax return forms   Tax shelters generally cannot use the cash method of accounting. Amended tax return forms Uniform capitalization rules. Amended tax return forms   The uniform capitalization rules generally apply to producing property or acquiring it for resale. Amended tax return forms Under those rules, the direct cost and part of the indirect cost of the property must be capitalized or included in inventory. Amended tax return forms For more information, see Publication 538. Amended tax return forms Denial of deduction for interest on an underpayment due to a reportable transaction. Amended tax return forms   You cannot deduct any interest you paid or accrued on any part of an underpayment of tax due to an understatement arising from a reportable transaction (discussed later) if the relevant facts affecting the tax treatment of the item are not adequately disclosed. Amended tax return forms This rule applies to reportable transactions entered into in tax years beginning after October 22, 2004. Amended tax return forms Authority for Disallowance of Tax Benefits The IRS has published guidance concluding that the claimed tax benefits of various abusive tax shelters should be disallowed. Amended tax return forms The guidance is the conclusion of the IRS on how the law is applied to a particular set of facts. Amended tax return forms Guidance is published in the Internal Revenue Bulletin for taxpayers' information and also for use by IRS officials. Amended tax return forms So, if your return is examined and an abusive tax shelter is identified and challenged, published guidance dealing with that type of shelter, which disallows certain claimed tax shelter benefits, could serve as the basis for the examining official's challenge of the tax benefits you claimed. Amended tax return forms In such a case, the examiner will not compromise even if you or your representative believes you have authority for the positions taken on your tax return. Amended tax return forms The courts have generally been unsympathetic to taxpayers involved in abusive tax shelter schemes and have ruled in favor of the IRS in the majority of the cases in which these shelters have been challenged. Amended tax return forms Investor Reporting You may be required to file a reportable transaction disclosure statement. Amended tax return forms Reportable Transaction Disclosure Statement Use Form 8886 to disclose information for each reportable transaction (discussed later) in which you participated. Amended tax return forms Generally, you must attach Form 8886 to your return for each tax year in which you participated in the transaction. Amended tax return forms Under certain circumstances, a transaction must be disclosed within 90 days of the transaction being identified as a listed transaction or a transaction of interest (discussed later). Amended tax return forms In addition, for the first year Form 8886 is attached to your return, you must send a copy of the form to: Internal Revenue Service OTSA Mail Stop 4915 1973 North Rulon White Blvd. Amended tax return forms  Ogden, UT 84404 If you file your return electronically, the copy sent to OTSA must show exactly the same information, word for word, provided with the electronically filed return and it must be provided on the official IRS Form 8886 or an exact copy of the form. Amended tax return forms If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form. Amended tax return forms If you fail to file Form 8886 as required or fail to include any required information on the form, you may have to pay a penalty. Amended tax return forms See Penalty for failure to disclose a reportable transaction , later under Penalties. Amended tax return forms The following discussion briefly describes reportable transactions. Amended tax return forms For more details, see the Instructions for Form 8886. Amended tax return forms Reportable transaction. Amended tax return forms   A reportable transaction is any of the following. Amended tax return forms A listed transaction. Amended tax return forms A confidential transaction. Amended tax return forms A transaction with contractual protection. Amended tax return forms A loss transaction. Amended tax return forms A transaction of interest entered into after November 1, 2006. Amended tax return forms Note. Amended tax return forms Transactions with a brief asset holding period were removed from the definition of reportable transaction for transactions entered into after August 2, 2007. Amended tax return forms Listed transaction. Amended tax return forms   A listed transaction is the same as, or substantially similar to, one of the types of transactions the IRS has determined to be a tax-avoidance transaction. Amended tax return forms These transactions have been identified in notices, regulations, and other published guidance issued by the IRS. Amended tax return forms For a list of existing guidance, see Notice 2009-59 in Internal Revenue Bulletin 2009-31, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2009-31_IRB/ar07. Amended tax return forms html. Amended tax return forms Confidential transaction. Amended tax return forms   A confidential transaction is offered to you under conditions of confidentiality and for which you have paid an advisor a minimum fee. Amended tax return forms A transaction is offered under conditions of confidentiality if the advisor who is paid the fee places a limit on your disclosure of the tax treatment or tax structure of the transaction and the limit protects the confidentiality of the advisor's tax strategies. Amended tax return forms The transaction is treated as confidential even if the conditions of confidentiality are not legally binding on you. Amended tax return forms Transaction with contractual protection. Amended tax return forms   Generally, a transaction with contractual protection is one in which you or a related party has the right to a full or partial refund of fees if all or part of the intended tax consequences of the transaction are not sustained, or a transaction for which the fees are contingent on your realizing the tax benefits from the transaction. Amended tax return forms For information on exceptions, see Revenue Procedure 2007-20 in Internal Revenue Bulletin 2007-7, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2007-07_IRB/ar15. Amended tax return forms html. Amended tax return forms Loss transaction. Amended tax return forms   For individuals, a loss transaction is one that results in a deductible loss if the gross amount of the loss is at least $2 million in a single tax year or $4 million in any combination of tax years. Amended tax return forms A loss from a foreign currency transaction under Internal Revenue Code section 988 is a loss transaction if the gross amount of the loss is at least $50,000 in a single tax year, whether or not the loss flows through from an S corporation or partnership. Amended tax return forms   Certain losses (such as losses from casualties, thefts, and condemnations) are excepted from this category and do not have to be reported on Form 8886. Amended tax return forms For information on other exceptions, see Revenue Procedure 2004-66 in Internal Revenue Bulletin 2004-50, as modified and superseded by Revenue Procedure 2013-11, (or future published guidance) available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2004-50_IRB/ar11. Amended tax return forms html. Amended tax return forms Transaction of interest. Amended tax return forms   A transaction of interest is a transaction entered into after November 1, 2006, that is the same as, or substantially similar to, one of the types of transactions that the IRS has identified by notice, regulation, or other form of published guidance as a transaction of interest. Amended tax return forms The IRS has identified the following transactions of interest. Amended tax return forms “Toggling” grantor trusts as described in Notice 2007-73, 2007-36 I. Amended tax return forms R. Amended tax return forms B. Amended tax return forms 545, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2007-36_IRB/ar20. Amended tax return forms html. Amended tax return forms Certain transactions involving contributions of a successor member interest in a limited liability company as described in Notice 2007-72, 2007-36 I. Amended tax return forms R. Amended tax return forms B. Amended tax return forms 544, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2007-36_IRB/ar19. Amended tax return forms html. Amended tax return forms Certain transactions involving the sale or other disposition of all interests in a charitable remainder trust and claiming little or no taxable gain as described in Notice 2008-99, 2008-47 I. Amended tax return forms R. Amended tax return forms B. Amended tax return forms 1194, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2008-47_IRB/ar11. Amended tax return forms html. Amended tax return forms Certain transactions involving a U. Amended tax return forms S. Amended tax return forms taxpayer owning controlled foreign corporations (CFCs) that hold stock of a lower-tier CFC through a domestic partnership to avoid reporting income as described in Notice 2009-7, 2009-3 I. Amended tax return forms R. Amended tax return forms B. Amended tax return forms 312, available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2009-03_IRB/ar10. Amended tax return forms html. Amended tax return forms   For updates to this list, go to www. Amended tax return forms irs. Amended tax return forms gov/Businesses/Corporations/Abusive-Tax-Shelters-and-Transactions. Amended tax return forms Penalties Investing in an abusive tax shelter may lead to substantial expenses. Amended tax return forms First, the promoter generally charges a substantial fee. Amended tax return forms If your return is examined by the IRS and a tax deficiency is determined, you will be faced with payment of more tax, interest on the underpayment, possibly a 20%, 30%, or even 40% accuracy-related penalty, or a 75% civil fraud penalty. Amended tax return forms You may also be subject to the penalty for failure to pay tax. Amended tax return forms These penalties are explained in the following paragraphs. Amended tax return forms Accuracy-related penalties. Amended tax return forms   An accuracy-related penalty of 20% can be imposed for underpayments of tax due to: Negligence or disregard of rules or regulations, Substantial understatement of tax, Substantial valuation misstatement (increased to 40% for gross valuation misstatement), Transaction lacking economic substance (increased to 40% for undisclosed transaction lacking economic substance), or Undisclosed foreign financial asset understatement (40% in all cases). Amended tax return forms Except for a transaction lacking economic substance, this penalty will not be imposed if you can show you had reasonable cause for any understatement of tax and that you acted in good faith. Amended tax return forms Your failure to disclose a reportable transaction is a strong indication that you failed to act in good faith. Amended tax return forms   If you are charged an accuracy-related penalty, interest will be imposed on the amount of the penalty from the due date of the return (including extensions) to the date you pay the penalty. Amended tax return forms   The 20% penalties do not apply to any underpayment attributable to a reportable transaction understatement subject to an accuracy-related penalty (discussed later). Amended tax return forms Negligence or disregard of rules or regulations. Amended tax return forms   The penalty for negligence or disregard of rules or regulations is imposed only on the part of the underpayment due to negligence or disregard of rules or regulations. Amended tax return forms The penalty will not be charged if you can show you had reasonable cause for understating your tax and that you acted in good faith. Amended tax return forms    Negligence includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Amended tax return forms It also includes any failure to keep adequate books and records. Amended tax return forms A return position that has a reasonable basis is not negligence. Amended tax return forms   Disregard includes any careless, reckless, or intentional disregard of rules or regulations. Amended tax return forms   The penalty for disregard of rules and regulations can be avoided if all the following are true. Amended tax return forms You keep adequate books and records. Amended tax return forms You have a reasonable basis for your position on the tax issue. Amended tax return forms You make an adequate disclosure of your position. Amended tax return forms Use Form 8275 to make your disclosure and attach it to your return. Amended tax return forms To disclose a position contrary to a regulation, use Form 8275-R. Amended tax return forms Use Form 8886 to disclose a reportable transaction (discussed earlier). Amended tax return forms Substantial understatement of tax. Amended tax return forms   An understatement is considered to be substantial if it is more than the greater of: 10% of the tax required to be shown on the return, or $5,000. Amended tax return forms An “understatement” is the amount of tax required to be shown on your return for a tax year minus the amount of tax shown on the return, reduced by any rebates. Amended tax return forms The term “rebate” generally means a decrease in the tax shown on your original return as the result of your filing an amended return or claim for refund. Amended tax return forms   For items other than tax shelters, you can file Form 8275 or Form 8275-R to disclose items that could cause a substantial understatement of income tax. Amended tax return forms In that way, you can avoid the substantial understatement penalty if you have a reasonable basis for your position on the tax issue. Amended tax return forms Disclosure of the tax shelter item on a tax return does not reduce the amount of the understatement. Amended tax return forms   Also, the understatement penalty will not be imposed if you can show there was reasonable cause for the underpayment caused by the understatement and that you acted in good faith. Amended tax return forms An important factor in establishing reasonable cause and good faith will be the extent of your effort to determine your proper tax liability under the law. Amended tax return forms Substantial valuation misstatement. Amended tax return forms   In general, you are liable for a 20% penalty for a substantial valuation misstatement if all the following are true. Amended tax return forms The value or adjusted basis of any property claimed on the return is 150% or more of the correct amount. Amended tax return forms You underpaid your tax by more than $5,000 because of the misstatement. Amended tax return forms You cannot establish that you had reasonable cause for the underpayment and that you acted in good faith. Amended tax return forms   You may be assessed a penalty of 40% for a gross valuation misstatement. Amended tax return forms If you misstate the value or the adjusted basis of property by 200% or more of the amount determined to be correct, you will be assessed a penalty of 40%, instead of 20%, of the amount you underpaid because of the gross valuation misstatement. Amended tax return forms The penalty rate is also 40% if the property's correct value or adjusted basis is zero. Amended tax return forms Transaction lacking economic substance. Amended tax return forms   The economic substance doctrine only applies to an individual that entered into a transaction in connection with a trade or business or an activity engaged in for the production of income. Amended tax return forms For transactions entered into after March 30, 2010, a transaction has economic substance for you as an individual taxpayer only if: The transaction changes your economic position in a meaningful way (apart from federal income tax effects), or You have a substantial purpose (apart from federal income tax effects) for entering into the transaction. Amended tax return forms   For purposes of determining whether economic substance exists, a transaction's profit potential will only be taken into account if the present value of the reasonably expected pre-tax profit from the transaction is substantial compared to the present value of the expected net tax benefits that would be allowed if the transaction were respected. Amended tax return forms   If any part of your underpayment is due to any disallowance of claimed tax benefits by reason of a transaction lacking economic substance or failing to meet the requirements of any similar rule of law, that part of your underpayment will be subject to the 20% accuracy-related penalty even if you had a reasonable cause and acted in good faith concerning that part. Amended tax return forms   Additionally, the penalty increases to 40% if you do not adequately disclose on your return or in a statement attached to your return the relevant facts affecting the tax treatment of a transaction that lacks economic substance. Amended tax return forms Relevant facts include any facts affecting the tax treatment of the transaction. Amended tax return forms    Any excessive amount of an erroneous claim for an income tax refund or credit (other than a refund or credit related to the earned income credit) that results from a transaction found to be lacking economic substance will not be treated as having a reasonable basis and could be subject to a 20% penalty. Amended tax return forms Undisclosed foreign financial asset understatement. Amended tax return forms   For tax years beginning after March 18, 2010, you may be liable for a 40% penalty for an understatement of your tax liability due to an undisclosed foreign financial asset. Amended tax return forms An undisclosed foreign financial asset is any asset for which an information return, required to be provided under Internal Revenue Code section 6038, 6038B, 6038D, 6046A, or 6048 for any taxable year, is not provided. Amended tax return forms The penalty applies to any part of an underpayment related to the following undisclosed foreign financial assets. Amended tax return forms Any foreign business you control, reportable on Form 5471, Information Return of U. Amended tax return forms S. Amended tax return forms Persons With Respect To Certain Foreign Corporations, or Form 8865, Return of U. Amended tax return forms S. Amended tax return forms Persons With Respect to Certain Foreign Partnerships. Amended tax return forms Certain transfers of property to a foreign corporation or partnership, reportable on Form 926, Return by a U. Amended tax return forms S. Amended tax return forms Transferor of Property to a Foreign Corporation, or certain distributions to a foreign person, reportable on Form 8865. Amended tax return forms Your ownership interest in certain foreign financial assets, temporarily reportable on Form 8275 or 8275-R. Amended tax return forms    Instead of, or in addition to, Form 8275 or 8275-R, you may have to file Form 8938, Statement of Specified Foreign Financial Assets, with your tax return. Amended tax return forms See the Instructions for Form 8938 for details. Amended tax return forms    Your acquisition, disposition, or substantial change in ownership interest in a foreign partnership, reportable on Form 8865. Amended tax return forms Creation or transfer of money or property to certain foreign trusts, reportable on Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Amended tax return forms Penalty for incorrect appraisals. Amended tax return forms   The person who prepares an appraisal of the value of property may have to pay a penalty if: He or she knows, or reasonably should have known, that the appraisal would be used in connection with a return or claim for refund; and The claimed value of the property on a return or claim for refund based on that appraisal results in a substantial valuation misstatement or a gross valuation misstatement as discussed earlier. Amended tax return forms For details on the penalty amount and exceptions, see Publication 561. Amended tax return forms Penalty for failure to disclose a reportable transaction. Amended tax return forms   If you fail to include any required information regarding a reportable transaction (discussed earlier) on a return or statement, you may have to pay a penalty of 75% of the decrease in tax shown on your return as a result of such transaction (or that would have resulted if the transaction were respected for federal tax purposes). Amended tax return forms For an individual, the minimum penalty is $5,000 and the maximum is $10,000 (or $100,000 for a listed transaction). Amended tax return forms This penalty is in addition to any other penalty that may be imposed. Amended tax return forms   The IRS may rescind or abate the penalty for failing to disclose a reportable transaction under certain limited circumstances but cannot rescind the penalty for failing to disclose a listed transaction. Amended tax return forms For information on rescission, see Revenue Procedure 2007-21 in Internal Revenue Bulletin 2007-9 available at www. Amended tax return forms irs. Amended tax return forms gov/irb/2007-09_IRB/ar12. Amended tax return forms html. Amended tax return forms Accuracy-related penalty for a reportable transaction understatement. Amended tax return forms   If you have a reportable transaction understatement, you may have to pay a penalty equal to 20% of the amount of that understatement. Amended tax return forms This applies to any item due to a listed transaction or other reportable transaction with a significant purpose of avoiding or evading federal income tax. Amended tax return forms The penalty is 30% rather than 20% for the part of any reportable transaction understatement if the transaction was not properly disclosed. Amended tax return forms You may not have to pay the 20% penalty if you meet the strengthened reasonable cause and good faith exception. Amended tax return forms The reasonable cause and good faith exception does not apply to any part of a reportable transaction understatement attributable to one or more transactions that lack economic substance. Amended tax return forms   This penalty does not apply to the part of an understatement on which the fraud penalty, gross valuation misstatement penalty, or penalty for nondisclosure of noneconomic substance transactions is imposed. Amended tax return forms Civil fraud penalty. Amended tax return forms   If any underpayment of tax on your return is due to fraud, a penalty of 75% of the underpayment will be added to your tax. Amended tax return forms Joint return. Amended tax return forms   The fraud penalty on a joint return applies to a spouse only if some part of the underpayment is due to the fraud of that spouse. Amended tax return forms Failure to pay tax. Amended tax return forms   If a deficiency is assessed and is not paid within 10 days of the demand for payment, an investor can be penalized with up to a 25% addition to tax if the failure to pay continues. Amended tax return forms Whether To Invest In light of the adverse tax consequences and the substantial amount of penalties and interest that will result if the claimed tax benefits are disallowed, you should consider tax shelter investments carefully and seek competent legal and financial advice. Amended tax return forms Prev  Up  Next   Home   More Online Publications