Does IRS provide free tax information and services?
Yes. Refer to Tax Topic 101, IRS Services, or Publication 910, Guide to Free Tax Services, which describes the IRS publications and the free tax information services you can receive throughout the year. On this web site, visit the IRS Assistance Map for local help information, Forms and Pubs for a complete list of forms and publications available for download, and Tele-Tax Topics for other IRS information.
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I recently opened up a new account at the bank, and they asked me to complete a Form W-9. Is this necessary?
Your investment income is generally not subject to regular withholding, however, it may be subject to backup withholding to ensure that income tax is collected on this income.
When you open up a new account, you must certify under penalties of perjury that your social security number is correct and that you are not subject to backup withholding. Form W-9, Request for Taxpayer Identification Number and Certification, is used to make this certification. If you fail to make this certification on Form W-9, or similar statement, backup withholding may begin immediately on your new account, and 31% of the interest paid on your account will be withheld. For additional information on who is subject to backup withholding, refer to Tax Topic 307.
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Does a power of attorney stay in effect for more than one year?
When you complete the Form 2848, Power of Attorney and Declaration of Representative, you must show the type of tax, the tax form number, and the year or period(s) for which the power is granted. You can list returns for any number of specified years or periods that have already ended and returns for years or periods that will end no later than three years from the date the form is received by the IRS. A general reference to "all years," "all periods," or "all taxes" is not acceptable. The Form 2848 will be returned to you for correction if you use such general references.
References:
- Form 2848, Power of Attorney and Declaration of Representative
What is the difference between Form 8821 and Form 2848?
Form 8821, Tax Information Authorization, is used to authorize someone to receive confidential tax information. Form 8821 cannot be used to name an individual to represent you before the IRS. Form 2848, Power of Attorney and Declaration of Representative, is used to authorize the individual or individuals named to receive confidential tax information and to represent you before the IRS.
References:
- Form 2848, Power of Attorney and Declaration of Representative
- Form 8821, Tax Information Authorization
I just received my tax package in the mail. Why are there so many forms and schedules in it?
We print several packages that include different forms and schedules that may be filed with Form 1040. We mail you the package that includes the items you may need based on what you filed last year. We use packages instead of mailing forms and schedules separately as a cost-saving measure for us and a convenience for you.
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Do I have to file all the forms and schedules that are in my tax package?
No. Complete and attach to your return only the forms and schedules you need to report your income, deductions, and credits.
I'm concerned about the public debt. Can I make a payment to reduce it?
Yes. If you wish to do so, enclose a separate check with your income tax return. Make it payable to "Bureau of the Public Debt." You can also send the check separately to:
Bureau of the Public Debt
Department G
Washington, DC. 20239-0601
You may be able to deduct this gift on your next tax return if you itemize your deductions. Do not add your gift to any tax you may owe. If you owe tax, make a separate check for that amount payable to "United States Treasury."
I had a large amount of income this year compared to last year. Can I average the two years together?
Income averaging for individuals not engaged in a farming business is no longer available. It was repealed by the Tax Reform Act of 1986.
Will IRS figure the amount of tax and credits for taxpayers?
If you choose, the IRS will figure your tax on Form 1040EZ, Form 1040A, or Form 1040. Refer to Tax Topic 552, Tax and Credits Figured by IRS, for more information.
References:
- Form 1040, U.S. Individual Income Tax Return
- Form 1040A, U.S. Individual Income Tax Return
- Form 1040EZ, U.S. Individual Income Tax Return for Single and Joint Filers with No Dependents
- Tax Topic 552, Tax and credits figured by the IRS
I'm concerned because my check payment to the IRS has not been cashed yet. What should I do?
You may call 800-829-1040 and ask an IRS representative if the payment has been credited to your account. If it has not, you may choose to place a stop-payment on the original check and reissue the payment.
In what tax year is income reported? Does it matter when I receive the check ? Does it matter when I earned the money?
Cash basis taxpayers, which most individual taxpayers are, report income when it is received or constructively received. With a cash basis accounting method, it doesn't matter when the income is earned. Constructive receipt occurs when the income is available to you. An example of constructive receipt is when a check in your name has been cut but you have not yet picked it up from the payroll office, cashed or deposited it. Another example is when income, such as bank interest, has been credited to your account, but you have not withdrawn it, or even received a statement as to its crediting to your account.
An accrual basis taxpayer reports income in the year it is earned. Most individual taxpayers are not accrual basis taxpayers. The most common reason a taxpayer would elect to use an accrual basis accounting method on their individual income tax return is if the taxpayer is reporting income from a business that is using an accrual accounting method.
For more information, refer to Chapter 1 of Publication 17, Your Federal Income Tax, and Publication 538, Accounting Periods and Methods.
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Do you have assistance for taxpayers with disabilities?
Yes. Here are some of IRS' services: Tax Topics on this web site are compliant with the International Conference On Auditory Display (ICAD) when you download to adaptive computer equipment. Special telephone assistance is available during normal business hours for hearing impaired individuals through TDD equipment, allowing the hearing-impaired person to communicate with a tax assistor in either English or Spanish. The toll-free number for this service is 800-829-4059. Also, Braille materials for the visually impaired are available at regional libraries that have special services for persons with disabilities.
For additional information on these subjects and other areas that may affect persons with disabilities, refer to Tax Topic 102, Tax Assistance for Individuals with Disabilities and the Hearing Impaired, or Publication 907, Information for Persons with Disabilities.
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I have not filed tax returns for several years. What should I do?
Call 800-829-1040. The assistor will answer your tax questions and help you obtain blank prior year forms. Some prior year tax forms are available on this site. For additional information, refer to Tax Topic 153, What to do if You Haven't Filed Your Tax Return.
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Will the IRS recommend a reputable preparer?
The IRS will not recommend a specific tax preparer. You may want to check with friends, co-workers, or your employer for help in selecting a reputable preparer. For information on factors to consider when choosing a preparer, refer to Tax Topic 254, How to Choose a Tax Preparer.
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If I don't agree with an audit assessment, do I have any appeal rights?
The IRS has an appeals system for people who do not agree with the results of an examination of their tax returns or with other adjustments to their tax liability. For further information on the appeals process, refer to Tax Topic 151, Your Appeal Rights.
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Where can I get information about becoming a licensed IRS tax preparer?
You do not have to be licensed or certified by the IRS in order to complete someone's income tax return for pay. You are, however, required to sign the return as a "Paid Preparer."
An income tax return preparer may be subject to a civil penalties for knowingly preparing tax return(s) or refund claim(s) which understate the tax liability or overstate the refund based on unrealistic information. They may also be barred from limited practice for unethical and improper conduct. While not required to examine or review documents or other evidence to independently verify the taxpayer's information, the preparer must make reasonable inquiries if it appears to be incorrect or incomplete, or to determine the existence of required facts and circumstances incident to a deduction. Refer to Reg. 1.6694-1(e)(1).
For additional information, refer to Publication 470, Limited Practice Without Enrollment, Publication 947, Practice Before the IRS and Power of Attorney, and Revenue Procedure 81-38. For information about becoming a Enrolled Agent or taking the Special Enrollment Examination, visit our Director of Practice Enrolled Agent Program page.
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What are the new changes for 2000?
Refer to Tax Topic 302, Highlights of Tax Changes, for a brief overview of the tax law changes that are effective in 2000. Some items will be discussed in more detail in separate topics. Remember, this information is effective for your current 2000 return. For more detailed information, refer to Publication 553, Highlights of 2000 Tax Changes.
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What can I do to avoid any errors on my tax return in order to receive my refund as quickly as possible?
Refer to Tax Topic 303, Checklist of Common Errors When Preparing Your Tax Return, to assist you in double checking your arithmetic and your entire return to help eliminate any delays in receiving your refund.
References:
- Tax Topic 303, Checklist of Common Errors When Preparing Your Tax Return
How long do I need to keep certain records?
Records such as receipts, canceled checks, and other documents that prove an item of income or a deduction appearing on your return should be kept at least until the statute of limitations expires for that return. Usually this is three years from the date the return was due or filed, or two years from the date the tax was paid, whichever is later. There is no period of limitations when a return is false or fraudulent or when no return is filed. You should keep some records indefinitely, such as property records, since you may need them to prove the amount of gain or loss if the property is sold. For more details, refer to Publication 552, Recordkeeping for Individuals, or Tax Topic 305 on Recordkeeping.
If you are an employer, you must keep all your employment tax records for at least four years after the tax is due or paid, whichever is later. For additional information, refer to Publication 583, Starting a Business and Keeping Records. People in business often have expenses for travel, entertainment, and gifts. The documentation you should keep for each of these expenses can be found in Publication 463, Travel, Entertainment, Gift and Car Expenses.
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