Get Your Tax Refund
File your Federal Taxes for
Free with TurboTax Federal FREE Edition
FREE to Prepare + FREE to Print + FREE to E-file
- Get your maximum refund*
- 100% accurate calculations guaranteed*
TurboTax Federal Free Edition - File Taxes Online
Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!
Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
Taxes Unemployed2012 Amended Federal Tax Return FormHow To File A 1040ez Online2010 Irs Form 1040Aarp Tax Preparation SitesFederal Income Tax Forms 2011How To File An Amended Tax Return For 20101040ez Form BookletMilitary OneIrs Amended FormFiling Taxes For 20131040x IrsIrs Forms 1040 EzFree Ez Tax FormE File 2011File Tax Extension Online1044ezFree State Tax Filing 2012Irs 1040x 2010Form1040xHow To Amend A Tax Return With TurbotaxNeed 2007 Taxes1040nr Online FilingWww H&rblockfree Tax ReturnsHow To File Taxes OnlineH R Block OnlineAmend My 2012 Tax ReturnHr Block Free State File2012 Tax Filing For Free1040esHow To Do A Amended Tax Return1040ez Form Printable1040ez Tax Form 2012Federal Ez Tax Form 2011E File ExtensionHow To Amend 2012 Federal Tax ReturnCan I File My State Taxes Online For FreeEfile ComHow Can I File My 2010 Taxes For FreeHow To Amend A Tax Return1040ez
Taxes UnemployedTaxes unemployed 2. Taxes unemployed 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. Taxes unemployed ” 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. Taxes unemployed In many cases, however, losses from tax shelters produce little or no benefit to society, or the tax benefits are exaggerated beyond those intended. Taxes unemployed Those cases are called “abusive tax shelters. Taxes unemployed ” An investment that is considered a tax shelter is subject to restrictions, including the requirement that it be disclosed, as discussed later. Taxes unemployed Topics - This chapter discusses: Abusive Tax Shelters , Rules To Curb Abusive Tax Shelters , Investor Reporting , Penalties , and Whether To Invest . Taxes unemployed 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. Taxes unemployed Abusive Tax Shelters Abusive tax shelters are marketing schemes involving artificial transactions with little or no economic reality. Taxes unemployed 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. Taxes unemployed Despite appearances to the contrary, the taxpayer generally risks little. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed (But see the appraisal requirements discussed under Rules To Curb Abusive Tax Shelters , later. Taxes unemployed ) They are commonly marketed in terms of the ratio of tax deductions allegedly available to each dollar invested. Taxes unemployed This ratio (or “write-off”) is frequently said to be several times greater than one-to-one. Taxes unemployed 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. Taxes unemployed However, you should ask the following questions, which might provide a clue to the abusive nature of the plan. Taxes unemployed 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. Taxes unemployed These provisions include the following. Taxes unemployed Disclosure of reportable transactions. Taxes unemployed You must disclose information for each reportable transaction in which you participate. Taxes unemployed See Reportable Transaction Disclosure Statement , later. Taxes unemployed Material advisors with respect to any reportable transaction must disclose information about the transaction on Form 8918, Material Advisor Disclosure Statement. Taxes unemployed To determine whether you are a material advisor to a transaction, see the Instructions for Form 8918. Taxes unemployed Material advisors will receive a reportable transaction number for the disclosed reportable transaction. Taxes unemployed They must provide this number to all persons to whom they acted as a material advisor. Taxes unemployed They must provide the number at the time the transaction is entered into. Taxes unemployed 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. Taxes unemployed For information on penalties for failure to disclose and failure to maintain lists, see Internal Revenue Code sections 6707, 6707A, and 6708. Taxes unemployed Requirement to maintain list. Taxes unemployed Material advisors must maintain a list of persons to whom they provide material aid, assistance, or advice on any reportable transaction. Taxes unemployed 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. Taxes unemployed See Regulations section 301. Taxes unemployed 6112-1 for more information (including what information is required to be included on the list). Taxes unemployed Confidentiality privilege. Taxes unemployed 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. Taxes unemployed Appraisal requirement for donated property. Taxes unemployed 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. Taxes unemployed If you claim a deduction of more than $500,000 for the donated property, you generally must attach the qualified appraisal to your return. Taxes unemployed If you file electronically, see Form 8453, U. Taxes unemployed S. Taxes unemployed Individual Income Tax Transmittal for an IRS e-file Return, and its instructions. Taxes unemployed For more information about appraisals, including exceptions, see Publication 561. Taxes unemployed Passive activity loss and credit limits. Taxes unemployed 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. Taxes unemployed For more detailed information about determining and reporting income, losses, and credits from passive activities, see Publication 925. Taxes unemployed Interest on penalties. Taxes unemployed 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. Taxes unemployed Accounting method restriction. Taxes unemployed Tax shelters generally cannot use the cash method of accounting. Taxes unemployed Uniform capitalization rules. Taxes unemployed The uniform capitalization rules generally apply to producing property or acquiring it for resale. Taxes unemployed Under those rules, the direct cost and part of the indirect cost of the property must be capitalized or included in inventory. Taxes unemployed For more information, see Publication 538. Taxes unemployed Denial of deduction for interest on an underpayment due to a reportable transaction. Taxes unemployed 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. Taxes unemployed This rule applies to reportable transactions entered into in tax years beginning after October 22, 2004. Taxes unemployed 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. Taxes unemployed The guidance is the conclusion of the IRS on how the law is applied to a particular set of facts. Taxes unemployed Guidance is published in the Internal Revenue Bulletin for taxpayers' information and also for use by IRS officials. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Investor Reporting You may be required to file a reportable transaction disclosure statement. Taxes unemployed Reportable Transaction Disclosure Statement Use Form 8886 to disclose information for each reportable transaction (discussed later) in which you participated. Taxes unemployed Generally, you must attach Form 8886 to your return for each tax year in which you participated in the transaction. Taxes unemployed 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). Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed If you use a computer-generated or substitute Form 8886, it must be an exact copy of the official IRS form. Taxes unemployed 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. Taxes unemployed See Penalty for failure to disclose a reportable transaction , later under Penalties. Taxes unemployed The following discussion briefly describes reportable transactions. Taxes unemployed For more details, see the Instructions for Form 8886. Taxes unemployed Reportable transaction. Taxes unemployed A reportable transaction is any of the following. Taxes unemployed A listed transaction. Taxes unemployed A confidential transaction. Taxes unemployed A transaction with contractual protection. Taxes unemployed A loss transaction. Taxes unemployed A transaction of interest entered into after November 1, 2006. Taxes unemployed Note. Taxes unemployed Transactions with a brief asset holding period were removed from the definition of reportable transaction for transactions entered into after August 2, 2007. Taxes unemployed Listed transaction. Taxes unemployed 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. Taxes unemployed These transactions have been identified in notices, regulations, and other published guidance issued by the IRS. Taxes unemployed For a list of existing guidance, see Notice 2009-59 in Internal Revenue Bulletin 2009-31, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2009-31_IRB/ar07. Taxes unemployed html. Taxes unemployed Confidential transaction. Taxes unemployed A confidential transaction is offered to you under conditions of confidentiality and for which you have paid an advisor a minimum fee. Taxes unemployed 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. Taxes unemployed The transaction is treated as confidential even if the conditions of confidentiality are not legally binding on you. Taxes unemployed Transaction with contractual protection. Taxes unemployed 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. Taxes unemployed For information on exceptions, see Revenue Procedure 2007-20 in Internal Revenue Bulletin 2007-7, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2007-07_IRB/ar15. Taxes unemployed html. Taxes unemployed Loss transaction. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed irs. Taxes unemployed gov/irb/2004-50_IRB/ar11. Taxes unemployed html. Taxes unemployed Transaction of interest. Taxes unemployed 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. Taxes unemployed The IRS has identified the following transactions of interest. Taxes unemployed “Toggling” grantor trusts as described in Notice 2007-73, 2007-36 I. Taxes unemployed R. Taxes unemployed B. Taxes unemployed 545, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2007-36_IRB/ar20. Taxes unemployed html. Taxes unemployed Certain transactions involving contributions of a successor member interest in a limited liability company as described in Notice 2007-72, 2007-36 I. Taxes unemployed R. Taxes unemployed B. Taxes unemployed 544, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2007-36_IRB/ar19. Taxes unemployed html. Taxes unemployed 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. Taxes unemployed R. Taxes unemployed B. Taxes unemployed 1194, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2008-47_IRB/ar11. Taxes unemployed html. Taxes unemployed Certain transactions involving a U. Taxes unemployed S. Taxes unemployed 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. Taxes unemployed R. Taxes unemployed B. Taxes unemployed 312, available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2009-03_IRB/ar10. Taxes unemployed html. Taxes unemployed For updates to this list, go to www. Taxes unemployed irs. Taxes unemployed gov/Businesses/Corporations/Abusive-Tax-Shelters-and-Transactions. Taxes unemployed Penalties Investing in an abusive tax shelter may lead to substantial expenses. Taxes unemployed First, the promoter generally charges a substantial fee. Taxes unemployed 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. Taxes unemployed You may also be subject to the penalty for failure to pay tax. Taxes unemployed These penalties are explained in the following paragraphs. Taxes unemployed Accuracy-related penalties. Taxes unemployed 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). Taxes unemployed 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. Taxes unemployed Your failure to disclose a reportable transaction is a strong indication that you failed to act in good faith. Taxes unemployed 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. Taxes unemployed The 20% penalties do not apply to any underpayment attributable to a reportable transaction understatement subject to an accuracy-related penalty (discussed later). Taxes unemployed Negligence or disregard of rules or regulations. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Negligence includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code. Taxes unemployed It also includes any failure to keep adequate books and records. Taxes unemployed A return position that has a reasonable basis is not negligence. Taxes unemployed Disregard includes any careless, reckless, or intentional disregard of rules or regulations. Taxes unemployed The penalty for disregard of rules and regulations can be avoided if all the following are true. Taxes unemployed You keep adequate books and records. Taxes unemployed You have a reasonable basis for your position on the tax issue. Taxes unemployed You make an adequate disclosure of your position. Taxes unemployed Use Form 8275 to make your disclosure and attach it to your return. Taxes unemployed To disclose a position contrary to a regulation, use Form 8275-R. Taxes unemployed Use Form 8886 to disclose a reportable transaction (discussed earlier). Taxes unemployed Substantial understatement of tax. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed In that way, you can avoid the substantial understatement penalty if you have a reasonable basis for your position on the tax issue. Taxes unemployed Disclosure of the tax shelter item on a tax return does not reduce the amount of the understatement. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Substantial valuation misstatement. Taxes unemployed In general, you are liable for a 20% penalty for a substantial valuation misstatement if all the following are true. Taxes unemployed The value or adjusted basis of any property claimed on the return is 150% or more of the correct amount. Taxes unemployed You underpaid your tax by more than $5,000 because of the misstatement. Taxes unemployed You cannot establish that you had reasonable cause for the underpayment and that you acted in good faith. Taxes unemployed You may be assessed a penalty of 40% for a gross valuation misstatement. Taxes unemployed 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. Taxes unemployed The penalty rate is also 40% if the property's correct value or adjusted basis is zero. Taxes unemployed Transaction lacking economic substance. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Relevant facts include any facts affecting the tax treatment of the transaction. Taxes unemployed 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. Taxes unemployed Undisclosed foreign financial asset understatement. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed The penalty applies to any part of an underpayment related to the following undisclosed foreign financial assets. Taxes unemployed Any foreign business you control, reportable on Form 5471, Information Return of U. Taxes unemployed S. Taxes unemployed Persons With Respect To Certain Foreign Corporations, or Form 8865, Return of U. Taxes unemployed S. Taxes unemployed Persons With Respect to Certain Foreign Partnerships. Taxes unemployed Certain transfers of property to a foreign corporation or partnership, reportable on Form 926, Return by a U. Taxes unemployed S. Taxes unemployed Transferor of Property to a Foreign Corporation, or certain distributions to a foreign person, reportable on Form 8865. Taxes unemployed Your ownership interest in certain foreign financial assets, temporarily reportable on Form 8275 or 8275-R. Taxes unemployed 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. Taxes unemployed See the Instructions for Form 8938 for details. Taxes unemployed Your acquisition, disposition, or substantial change in ownership interest in a foreign partnership, reportable on Form 8865. Taxes unemployed 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. Taxes unemployed Penalty for incorrect appraisals. Taxes unemployed 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. Taxes unemployed For details on the penalty amount and exceptions, see Publication 561. Taxes unemployed Penalty for failure to disclose a reportable transaction. Taxes unemployed 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). Taxes unemployed For an individual, the minimum penalty is $5,000 and the maximum is $10,000 (or $100,000 for a listed transaction). Taxes unemployed This penalty is in addition to any other penalty that may be imposed. Taxes unemployed 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. Taxes unemployed For information on rescission, see Revenue Procedure 2007-21 in Internal Revenue Bulletin 2007-9 available at www. Taxes unemployed irs. Taxes unemployed gov/irb/2007-09_IRB/ar12. Taxes unemployed html. Taxes unemployed Accuracy-related penalty for a reportable transaction understatement. Taxes unemployed If you have a reportable transaction understatement, you may have to pay a penalty equal to 20% of the amount of that understatement. Taxes unemployed 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. Taxes unemployed The penalty is 30% rather than 20% for the part of any reportable transaction understatement if the transaction was not properly disclosed. Taxes unemployed You may not have to pay the 20% penalty if you meet the strengthened reasonable cause and good faith exception. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Civil fraud penalty. Taxes unemployed 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. Taxes unemployed Joint return. Taxes unemployed 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. Taxes unemployed Failure to pay tax. Taxes unemployed 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. Taxes unemployed 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. Taxes unemployed Prev Up Next Home More Online Publications
Legal Help for Consumers
What to do if you have to hire an attorney or go to Small Claims Court to resolve a consumer problem.