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Publication 3920 2003 Tax Year

Publication 3920
Main Contents

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Tax Forgiveness

The IRS will forgive the federal income tax liabilities of decedents who died as a result of the Oklahoma City attack, September 11 attacks, and anthrax attacks. Income tax is forgiven for these decedents whether they were killed in an attack or in rescue or recovery operations. Any forgiven tax liability owed to the IRS will not have to be paid. Any forgiven tax liability that has already been paid will be refunded. (See Refund of Taxes Paid, later.) To determine the amount of tax to be forgiven, read Years Eligible for Tax Forgiveness first. Then read Amount of Tax Forgiven.

Tip

Decedents whose total forgiven tax liability for all eligible years is less than $10,000 are entitled to $10,000 minimum relief. Even decedents who were not required to file tax returns for the eligible tax years are entitled to $10,000 minimum relief. See Minimum Amount of Relief later under Amount of Tax Forgiven.

Years Eligible for Tax Forgiveness

The following paragraphs explain which years are eligible for tax forgiveness.

Oklahoma City attack.

For those who died from this attack, income tax is forgiven for 1994 and all later years up to and including the year of death.

Example 1.

A man was killed in the bombing of the federal building in Oklahoma City on April 19, 1995. His income tax is forgiven for 1994 and 1995.

Example 2.

A woman was wounded while walking outside the federal building in Oklahoma City on April 19, 1995. She subsequently died of her wounds in 1996. Her income tax is forgiven for 1994, 1995, and 1996.

September 11 attacks and anthrax attacks.

For those who die from these attacks, income tax is forgiven for 2000 and all later years up to and including the year of death.

Example 1.

A Pentagon employee died in the September 11 attack. Her income tax is forgiven for 2000 and 2001.

Example 2.

A visitor to the World Trade Center died in 2002 of wounds he sustained in the September 11 attack. His income tax liability is forgiven for 2000, 2001, and 2002.

Amount of Tax Forgiven

The IRS will forgive the decedent's income tax liability for all years eligible for tax forgiveness. On a joint return, only the decedent's part of the joint income tax liability is eligible for forgiveness.

To figure the tax to be forgiven, use the following worksheets.

  • Use Worksheet A for any eligible year the decedent filed a return as single, married filing separately, head of household, or qualifying widow(er).
  • Use Worksheet B for any eligible year the decedent filed a joint return. See the illustrated Worksheet B near the end of this publication.

Tip

Do not complete Worksheet A or B if the decedent was not required to file tax returns for the eligible tax years. Instead, complete Worksheet C and file a return for the decedent's last tax year. See Minimum Amount of Relief, later.

Request information by phone

If you need assistance, call the IRS at 1–866–562–5227 Monday through Friday during the following times.

In English–7 a.m. to 10 p.m. local time.
In Spanish–8 a.m. to 9:30 p.m. local time.

Both spouses died.

If both spouses died as a result of a terrorist attack and they filed a joint return for an eligible tax year, fill out Worksheet B for each spouse for that year. Do this to determine if each spouse qualifies for the minimum relief of $10,000 (discussed later under Minimum Amount of Relief). If you are certain that neither spouse's total forgiven tax liability for all eligible years is less than $10,000, skip Worksheet B. However, attach a computation of the forgiven tax liability to the final income tax return or amended tax return for each eligible year. The forgiven tax liability is the total tax shown on the joint return minus the taxes listed in the instructions for line 4 of Worksheet B.

Residents of community property states.

If the decedent was domiciled in a community property state and the spouse reported half the community income on a separate return, the surviving spouse can get a refund of taxes paid on his or her share of the decedent's income for the eligible years. Also, all of the decedent's income taxes paid for the eligible years will be refunded to either the executor or administrator of the estate, or to the surviving spouse if there is no legal representative.

Worksheet B. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)
      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1      
2 Enter the decedent's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 2      
3 Enter the decedent's total tax. See the instructions. 3      
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4      
5 Subtract line 4 from line 3. 5      
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 6      
7 Enter the surviving spouse's total tax. See the instructions. 7      
8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 8      
9 Subtract line 8 from line 7. 9      
10 Add lines 5 and 9. 10      
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11      
12 Add lines 4 and 8. 12      
13 Subtract line 12 from line 11. 13      
14 Divide line 5 by line 10. Enter the result as a decimal. 14      
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15      
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet B. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)
      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1      
2 Enter the decedent's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 2      
3 Enter the decedent's total tax. See the instructions. 3      
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4      
5 Subtract line 4 from line 3. 5      
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 6      
7 Enter the surviving spouse's total tax. See the instructions. 7      
8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 8      
9 Subtract line 8 from line 7. 9      
10 Add lines 5 and 9. 10      
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11      
12 Add lines 4 and 8. 12      
13 Subtract line 12 from line 11. 13      
14 Divide line 5 by line 10. Enter the result as a decimal. 14      
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15      
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.
Instructions for Worksheet B

Table 1. Total Tax Line on Decedent's Return

Note: Use this table to find the total tax line on the decedent's income tax return.*
Form 1994 1995 1996 2000 2001
1040 Line 53 Line 54 Line 51 Line 57 Line 58
1040A Line 27 Line 28 Line 28 Line 35 File Form 1040
1040EZ Line 9 Line 10 Line 10 Line 10
TeleFile Tax Record ** Line E Line J Line K
1040NR Line 51 Line 52 Line 49 Line 54 Line 54
1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR
* Line numbers for the 2002 forms were not available when this publication went to print.
** File Form 4506 to get a transcript of the decedent's account.

Table 1. Total Tax Line on Decedent's Return

Note: Use this table to find the total tax line on the decedent's income tax return.*
Form 1994 1995 1996 2000 2001
1040 Line 53 Line 54 Line 51 Line 57 Line 58
1040A Line 27 Line 28 Line 28 Line 35 File Form 1040
1040EZ Line 9 Line 10 Line 10 Line 10
TeleFile Tax Record ** Line E Line J Line K
1040NR Line 51 Line 52 Line 49 Line 54 Line 54
1040NR–EZ N/A Line 17 Line 17 Line 18 File Form 1040NR
* Line numbers for the 2002 forms were not available when this publication went to print.
** File Form 4506 to get a transcript of the decedent's account.
Lines 2 and 6.

Allocate income and deductions in the same manner they would have been allocated if the spouses had filed separate returns.

Allocate wages and salaries to the spouse who performed the services and received the Form W-2. Business and investment income (including capital gains) are generally allocated to the spouse who owned the business or investment that produced the income. Income from a jointly owned business or investment should be allocated equally between the spouses unless there is evidence that shows a different allocation is appropriate.

Allocate business deductions to the owner of the business. Allocate personal deductions (such as itemized deductions for mortgage interest and taxes) equally between the spouses unless there is evidence that shows a different allocation is appropriate.

Lines 3 and 7.

Figure the total tax as if a separate return had been filed. The total tax is the tax that would have been entered on the tax return line shown in Table 1 if a separate return had been filed. When figuring the tax using the Tax Table or Tax Rate Schedule, use the “Married filing separately” column in the Tax Table or Tax Rate Schedule Y-2.

When figuring the total tax, allocate credits and other taxes, if any, in the same manner as they would have been allocated if the spouses had filed separate returns. If a credit would not have been allowed on a separate return, allocate the credit shown on the joint return between the spouses. Examples of credits generally not allowed on a separate return are the child and dependent care credit, credit for the elderly, adoption credit, education credits, and earned income credit.

Line 4.

Enter the total, if any, of the following taxes.

  • Self-employment tax.
  • Social security and Medicare tax on tip income not reported to employer.
  • Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts).
  • Tax on excess accumulation in qualified retirement plans.
  • Household employment taxes.
  • Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance.
  • Tax on golden parachute payments.

Minimum Amount of Relief

The minimum amount of relief is $10,000. If the decedent's total forgiven tax liability for all eligible years is less than $10,000, the difference between $10,000 and the total forgiven tax liability for those years will be treated as a tax payment for the decedent's last tax year. The IRS will refund the difference as explained under Refund of Taxes Paid. Use Worksheet C to figure the additional tax payment. But first complete Worksheet A or B, unless the decedent was not required to file tax returns for the eligible tax years.

Example 1.

An individual who died in the September 11 attacks had an income tax liability of $-0- for 2000 and $6,400 for 2001. The $6,400 is eligible for forgiveness. The IRS will forgive $6,400 and treat the difference between $10,000 and $6,400 ($3,600) as a tax payment for 2001.

Example 2.

A child who died in the September 11 attacks had no (-0-) income tax liability for 2000 or 2001. The IRS will treat $10,000 as a tax payment for 2001.

Income received after date of death.

Generally, income of the decedent received after the date of death must be reported on Form 1041 if the estate has gross income for the tax year of $600 or more. Examples are the final paycheck or dividends on stock owned by the decedent. However, this income is exempt from income tax and is not included on Form 1041 if it is received:

  • After the date of the decedent's death, and
  • Before the end of the decedent's tax year (determined without regard to death).

Nonqualifying income.

The following income is not exempt from tax. The tax on it is not eligible for forgiveness.

  • Deferred compensation that would have been payable if the death had occurred because of an event other than these attacks.
  • Amounts that would not have been payable but for an action taken after September 11, 2001.

The following are examples of nonqualifying income.

  • Amounts payable from a qualified retirement plan or IRA to the beneficiary or estate of the decedent.
  • Amounts payable only as death or survivor's benefits from pre-existing arrangements that would have been paid if the death had occurred for another reason.
  • Income received as a result of adjustments made by the decedent's employer to a plan or arrangement to accelerate the vesting of restricted property or the payment of nonqualified deferred compensation after the date of the attack.
  • Interest on savings bonds cashed by the beneficiary of the decedent.

Tip

If you are responsible for the estate of a decedent, see Publication 559. Publication 559 discusses how to complete and file federal income tax returns and explains your responsibility to pay any taxes due.

Instructions for lines 2–9 of Worksheet C.

The tax that would have been payable on the exempt income (discussed earlier) must be considered when determining whether a decedent is entitled to the $10,000 minimum relief. To figure the tax that would have been payable, you can use lines 2 through 9 of Worksheet C. Or, if special requirements are met, you can use the alternative computation instead. See Alternative computation, later.

You have to use lines 2–9 (or the alternative computation) to figure the tax that would have been payable even if Form 1041 was not required to be filed. Use Form 1041 to figure what the taxable income would be without including the exempt income. Then enter that taxable income (even if a negative number) on line 2 of Worksheet C (or line 1 of Worksheet D, Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)).

Alternative computation.

Instead of using lines 2–8 of Worksheet C to figure the tax on exempt income (line 9 of Worksheet C), you may be able to use Worksheet D. You can use Worksheet D to figure the tax on the exempt income payable by the estate and its beneficiaries only if both of the following requirements are met.

  1. The estate claimed an income distribution deduction on line 18 (Form 1041).
  2. Each beneficiary submits the information necessary to refigure the income tax payable on the exempt income received from the decedent's estate.

If requirement (2) is met but requirement (1) is not, you can still use Worksheet D if:

  • Form 1041 was not required because exempt income was received, and
  • The estate would have claimed an income distribution deduction if the exempt income were taxable.

If you use this alternative computation, skip lines 2–8 of Worksheet C and enter the amount from line 8 of Worksheet D on line 9 of Worksheet C. Complete the rest of Worksheet C to determine the additional payment allowed.

Worksheet C. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum relief of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.
1 Minimum relief amount.
Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 		1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2      
3 Enter the distribution deduction from line 18 (Form 1041) . 3      
4 Add lines 2 and 3. 4      
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5      
6 Add lines 4 and 5. 6      
7 Figure the tax on line 6 using Schedule G (Form 1041). 7      
8 Figure the tax on line 4 using Schedule G (Form 1041). 8      
9 Tax on exempt income. Subtract line 8 from line 7. 9      
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10      
11 Add lines 9 and 10. 11  
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12  
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

Worksheet C. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum relief of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.
1 Minimum relief amount.
Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 		1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2      
3 Enter the distribution deduction from line 18 (Form 1041) . 3      
4 Add lines 2 and 3. 4      
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5      
6 Add lines 4 and 5. 6      
7 Figure the tax on line 6 using Schedule G (Form 1041). 7      
8 Figure the tax on line 4 using Schedule G (Form 1041). 8      
9 Tax on exempt income. Subtract line 8 from line 7. 9      
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10      
11 Add lines 9 and 10. 11  
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12  
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

Worksheet D. Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)

1 Enter the taxable income from line 22 (Form 1041) 1  
2 Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 2  
3 Add lines 1 and 2 3  
4 Figure the tax on line 3 using Schedule G (Form 1041). 4  
5 Figure the tax on line 1 using Schedule G (Form 1041). 5  
6 Estate's tax on exempt income. Subtract line 5 from line 4 6  
7 Beneficiaries' tax on exempt income. Figure the total tax that would have been payable by all beneficiaries. Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Add the amounts by which each beneficiary's income tax is increased. 7  
8 Add lines 6 and 7. Enter this amount on line 9 of Worksheet C. 8  

Worksheet D. Alternative Computation of Tax on Exempt Income (Line 9 of Worksheet C)

1 Enter the taxable income from line 22 (Form 1041) 1  
2 Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 2  
3 Add lines 1 and 2 3  
4 Figure the tax on line 3 using Schedule G (Form 1041). 4  
5 Figure the tax on line 1 using Schedule G (Form 1041). 5  
6 Estate's tax on exempt income. Subtract line 5 from line 4 6  
7 Beneficiaries' tax on exempt income. Figure the total tax that would have been payable by all beneficiaries. Do this by including in each beneficiary's gross income the exempt income received from the decedent's estate and refiguring the income tax. Add the amounts by which each beneficiary's income tax is increased. 7  
8 Add lines 6 and 7. Enter this amount on line 9 of Worksheet C. 8  

Refund of Taxes Paid

The IRS will refund the following forgiven income tax liabilities.

  1. Income tax liabilities that have been paid.
  2. Income tax liabilities treated as paid because the total tax liability for all years eligible for tax forgiveness is less than $10,000. See Minimum Amount of Relief, earlier.

Example 1.

A man who died in the September 11 attacks had an income tax liability of $7,500 for 2000 and $6,500 for 2001. The total, $14,000, is eligible for tax forgiveness. However, he paid only $13,000 of that amount. The IRS will refund the $13,000 paid.

Example 2.

A child who died in the September 11 attacks had no income tax liability for 2000 or 2001. The child qualifies for the minimum relief of $10,000. The $10,000 is treated as a tax payment for 2001 and will be refunded.

Period for filing a claim for credit or refund.

To obtain a tax refund on a previously filed income tax return, file an amended return (Form 1040X or an amended Form 1041) within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever is later. For example, you have until April 15, 2004, to file an amended return on a 2000 Form 1040, 1040A, or 1040EZ that was filed by April 16, 2001, and for which the tax was paid when due. To obtain a refund on a return that has not been filed, file the return within 3 years of the original due date of the return.

Extension of time for victims of Oklahoma City attack.

The period described above has been extended for victims of the Oklahoma City attack. Survivors and personal representatives of these victims have until January 22, 2003, to file an original or amended return.

How To Claim Tax Forgiveness

Use the following procedures to claim income tax forgiveness.

Which Form To Use

The form you use depends on whether an income tax return for the eligible year was already filed for the decedent.

Return required but not yet filed.

File Form 1040 if the decedent was a U.S. citizen or resident. File Form 1040NR if the decedent was a nonresident alien. A nonresident alien is someone who is not a U.S. citizen or resident.

Return required and already filed.

File a separate Form 1040X for each year you are claiming tax relief.

Return not required and not filed.

File Form 1040 only for the year of death if the decedent was a U.S. citizen or resident. File Form 1040NR if the decedent was a nonresident alien.

Return not required but already filed.

File Form 1040X only for the year of death.

How to complete the returns.

Fill out Form 1040 or 1040NR according to its instructions but do not reduce the decedent's tax liability by any taxes that will be forgiven. Attach to each return a computation of the income tax to be forgiven or a copy of Worksheet A or B. If filing Form 1040 or Form 1040NR, also attach any Forms W–2. If the total forgiven tax liability for all eligible years is less than $10,000, attach to the decedent's final return a computation of the additional tax payment allowed or a copy of Worksheet C.

Also, please write one of the following across the top of page 1 of each return.

  • KITA—Oklahoma City
  • KITA—9/11
  • KITA—Anthrax

“KITA” means “killed in terrorist attack.”

Need a copy of a previously filed return?

You will find it easier to prepare Form 1040X if you have a copy of the decedent's previously filed tax return. If you need a copy, use Form 4506. The IRS will provide a free copy of the tax return if you write “DISASTER” in the top margin of Form 4506. Attach Letters Testamentary or other evidence to establish that you are authorized to act for the decedent's estate. Send Form 4506 to the address shown in the form instructions.

Taxpayer identification number.

A taxpayer identification number must be furnished on the decedent's returns. This is usually the decedent's social security number (SSN). However, a nonresident alien who is not eligible to get an SSN should have an individual taxpayer identification number (ITIN). If the decedent was a nonresident alien, had neither an SSN nor an ITIN, and was not required to file a U.S. income tax return for any tax year, do not apply for an ITIN. You may claim a refund by filing Form 1040NR without an SSN or ITIN.

Necessary Documents

Please attach the following documents to the return or amended return.

Proof of death.

Attach a copy of the death certificate. If the Department of Defense issued DD Form 1300, Report of Casualty, you can attach that form instead of the death certificate.

Form 1310.

You must send Form 1310 with all returns and claims for refund, unless either of the following applies.

  • You are a surviving spouse filing an original or amended joint return with the decedent.
  • You are a personal representative filing an original Form 1040 or Form 1040NR for the decedent and a court certificate showing your appointment is attached to the return.

A personal representative is an executor or administrator of a decedent's estate, as certified or appointed by the court. A copy of the decedent's will cannot be accepted as evidence that you are the personal representative.

Tip

If you have proof of death but do not have enough tax information to file a timely claim for a refund, file Form 1040X with Form 1310. Include a statement saying an amended return will be filed as soon as the necessary tax information is available.

Where To File

The IRS has set up a special office for processing returns and claims for tax forgiveness. Use one of the addresses shown below. Where you file the returns or claims depends on whether you use the U.S. Postal Service or a private delivery service.

Caution

Please do not send these returns or claims to any of the addresses shown in the tax form instructions.

U.S. Postal Service.

If you use the U.S. Postal Service, file these returns and claims at the following address.


Internal Revenue Service
P.O. Box 4053
Woburn, MA 01888

Private delivery service.

Private delivery services cannot deliver items to P.O. boxes. If you use a private delivery service, file these returns and claims at the following address.


Internal Revenue Service
Stop 661
310 Lowell St.
Andover, MA 01810

Designated private delivery services.

You can use the following private delivery services to file these returns and claims.

  • Airborne Express (Airborne): Overnight Air Express Service, Next Afternoon Service, and Second Day Service.
  • DHL Worldwide Express (DHL): DHL “Same Day” Service, and DHL USA Overnight.
  • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, and FedEx 2Day.
  • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Payments to Survivors

The following section discusses the tax treatment of certain amounts received by survivors.

September 11th Victim Compensation Fund of 2001

Payments from the September 11th Victim Compensation Fund of 2001 are not included in income.

Qualified Disaster Relief Payments

Qualified disaster relief payments are not included in income. These payments are not subject to income tax, self-employment tax, or employment taxes (social security, Medicare, and federal unemployment taxes). No withholding applies to these payments.

Qualified disaster relief payments include payments you receive (regardless of the source) after September 10, 2001, for the following expenses.

  • Reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a terrorist attack.
  • Reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence due to a terrorist attack. (A personal residence can be a rented residence or one you own.)
  • Reasonable and necessary expenses incurred for the repair or replacement of the contents of a personal residence due to a terrorist attack.

Qualified disaster relief payments also include the following.

  • Payments made by common carriers (for example, American Airlines and United Airlines regarding the September 11 attacks) because of death or physical injury incurred as a result of a terrorist attack.
  • Amounts paid by a federal, state, or local government in connection with a terrorist attack to those affected by the attack.

Caution

Qualified disaster relief payments do not include:

  • Insurance or other reimbursements for expenses, or
  • Income replacement payments, such as payments of lost wages, lost business income, or unemployment compensation.

Disability Payments

For tax years ending after September 10, 2001, disability payments for injuries incurred as a direct result of a terrorist attack directed against the United States (or its allies), whether outside or within the United States, are not included in income.

Death Benefits

Payments received by an individual or the estate of a decedent from the employer of an employee who died as a result of the Oklahoma City or September 11 terrorist attacks, or as a result of the anthrax attacks, are not included in income. Only the amount that exceeds the benefits that would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack is excludable. However, the exclusion does apply to incidental death benefits paid under a qualified retirement plan even if these amounts would have been payable if the death had occurred for a reason other than a terrorist or anthrax attack.

Tip

If you included death benefits in income on a previously filed return and they are now excludable under the above rule, file Form 1040X to amend that return. For information on the period for filing Form 1040X, see Period for filing claim for credit or refund earlier under Refund of Taxes Paid. If that period has expired, you are granted an extension. You have until January 22, 2003, to file Form 1040X to exclude the death benefits. On top of page 1 of Form 1040X, write “Extension of Limitations Under PL 107–134, sec. 102(b)(2).”

Canceled Debt

Canceled debt is not included in your income (or the income of the estate) if:

  • You (or the estate) were liable, or became liable, for the debt of a decedent, and
  • The debt was canceled after September 10, 2001, and before January 1, 2002, because the decedent died as a result of the September 11 attacks or anthrax attacks.

The lender is not required to report the canceled debt on Form 1099–C, Cancellation of Debt.

Payments to Survivors of Public Safety Officers

If you are a survivor of a public safety officer who died in the line of duty, certain amounts you receive are not included in income.

Bureau of Justice Assistance payments.

If you are a surviving dependent of a public safety officer (law enforcement officer or firefighter) who died in the line of duty, do not include in your income the death benefit paid to you by the Bureau of Justice Assistance.

Government plan annuity.

If you receive a survivor annuity as the child or spouse (or former spouse) of a public safety officer who was killed in the line of duty, you generally do not have to include it in income. This exclusion applies to the amount of the annuity based on the officer's service as a public safety officer.

For this purpose, the term public safety officer includes police and law enforcement officers, firefighters, and rescue squad and ambulance crews.

More information.

For more information, see Publication 559.

Postponed Tax Deadlines

The IRS may postpone for up to 1 year certain tax deadlines of taxpayers who are affected by a terrorist attack. The tax deadlines the IRS may postpone include those for filing income and employment tax returns, paying income and employment taxes, and making contributions to a traditional IRA or Roth IRA.

If any tax deadline is postponed, the IRS will publicize the postponement in the affected area and publish a news release, revenue ruling, revenue procedure, notice, announcement, or other guidance in the Internal Revenue Bulletin (IRB).

Affected taxpayers.

If the IRS postpones a tax deadline, the following taxpayers are eligible for the postponement.

  • Any individual whose main home is located in a covered area (defined later).
  • Any business entity or sole proprietor whose principal place of business is located in a covered area.
  • Any individual, business entity, or sole proprietor whose records needed to meet a postponed deadline are maintained in a covered area. The main home or principal place of business does not have to be located in the covered area.
  • Any estate or trust whose tax records necessary to meet a postponed tax deadline are maintained in a covered area.
  • Any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a covered area.
  • The spouse on a joint return with a taxpayer who is eligible for postponements.
  • Any other person determined by the IRS to be affected by a terrorist attack.

Covered area.

This is an area in which a terrorist attack took place and in which the IRS has decided to postpone tax deadlines for up to 1 year.

Abatement of interest.

The IRS may abate (forgive) the interest on any underpaid income tax for the length of any postponement.

Disaster Area Losses

If your property was damaged or destroyed as a result of the September 11 attacks, you can choose to deduct your disaster loss on your 2000 return (or amended return) rather than on your 2001 return.

You must make this choice to deduct your loss on your 2000 return by the later of the following dates.

  • The due date (without extensions) for filing your 2001 income tax return (April 15, 2002, if you are a calendar year taxpayer).
  • The due date (with extensions) for the 2000 return.

For more information about disaster area losses, see Publication 547.

Estate Tax Reduction

The federal estate tax is reduced for taxable estates of individuals who died as a result of the Oklahoma City attack, the September 11 attacks, and the anthrax attacks. The estate tax is computed using a new rate schedule on page 25 of the November 2001 revision of the instructions for Form 706. The estate tax is reduced by credits against the estate tax, including the unified credit and the state death tax credit. These credits may reduce or eliminate the estate tax due.

Tip

A special rule extends until January 22, 2003, the period of time allowed to file a claim for a refund of estate taxes that have been paid.

Recovery from the September 11th Victim Compensation Fund.

The value of claims for a decedent's pain and suffering is normally included in the gross estate. However, if the estate chooses to seek recovery from this fund, the IRS has determined that, in view of the unique circumstances of this situation and the high likelihood that such claims will be valued at a nominal or zero amount, the claims will be valued at zero for estate tax purposes. Thus, there are no federal estate tax consequences if an estate or beneficiary receives a recovery from this fund.

Which estates must file a return.

For decedents dying in 2001, Form 706 must be filed by the executor for the estate of every U.S. citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $675,000. Form 706 must be filed within 9 months after the date of decedent's death unless you receive an extension of time to file. Use Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, to apply for an extension.

Where to file.

Returns on which the new rate schedule is used should be sent to the following address, which was not available when Form 706 went to print.


Internal Revenue Service
E & G Department/Stop 824T
201 W. Rivercenter Blvd.
Covington, KY 41011

More information.

For more information on the federal estate tax, see the instructions for Form 706.

Structured Settlement Factoring Transactions

A person who acquires payment rights in a structured settlement arrangement after February 21, 2002, may be subject to a 40% excise tax unless the transfer of the payment rights was approved in advance in a qualified order. The excise tax is figured on the excess of the undiscounted amount of the payments being acquired over the total amount actually paid to acquire them. However, this tax will not apply to transactions entered into from February 22, 2002, to July 1, 2002, if certain requirements are met. For information about these requirements, see Internal Revenue Code section 5891.

Worksheet B Illustrated. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)

      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1 2000 2001  
2 Enter the decedent's taxable income. Figure taxable income as
if a separate return had been filed. See the instructions. 		2 $17,259 $14,295  
3 Enter the decedent's total tax. See the instructions. 3 6,123 5,250  
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4 3,532 3,109  
5 Subtract line 4 from line 3. 5 2,591 2,141  
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions for line 2. 6 29,025 29,850  
7 Enter the surviving spouse's total tax. See the instructions. 7 5,277 5,391  
8 Enter the total, if any, of the surviving spouse's taxes listed in
the instructions for line 4. 		8 0 0  
9 Subtract line 8 from line 7. 9 5,277 5,391  
10 Add lines 5 and 9. 10 7,868 7,532  
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11 10,789 9,728  
12 Add lines 4 and 8. 12 3,532 3,109  
13 Subtract line 12 from line 11. 13 7,257 6,619  
14 Divide line 5 by line 10. Enter the result as a decimal. 14 .329 .284  
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15 $2,388 $1,880  
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet B Illustrated. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)

      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1 2000 2001  
2 Enter the decedent's taxable income. Figure taxable income as
if a separate return had been filed. See the instructions. 		2 $17,259 $14,295  
3 Enter the decedent's total tax. See the instructions. 3 6,123 5,250  
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4 3,532 3,109  
5 Subtract line 4 from line 3. 5 2,591 2,141  
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions for line 2. 6 29,025 29,850  
7 Enter the surviving spouse's total tax. See the instructions. 7 5,277 5,391  
8 Enter the total, if any, of the surviving spouse's taxes listed in
the instructions for line 4. 		8 0 0  
9 Subtract line 8 from line 7. 9 5,277 5,391  
10 Add lines 5 and 9. 10 7,868 7,532  
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11 10,789 9,728  
12 Add lines 4 and 8. 12 3,532 3,109  
13 Subtract line 12 from line 11. 13 7,257 6,619  
14 Divide line 5 by line 10. Enter the result as a decimal. 14 .329 .284  
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15 $2,388 $1,880  
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Illustrated Worksheets B and C

A wife lost her husband in the September 11 attack on the World Trade Center. They filed a joint return for 2000 and the wife chose to file a joint return as a surviving spouse for 2001. The returns for 2000 and 2001 showed the following income, deductions, and tax liabilities.

After the husband died, his estate received income of $4,000. Of that amount, $1,000 is net profit from Schedule C received before the end of 2001. This net profit is exempt from income tax as explained earlier under Income received after date of death. The wife files Form 1041 because the gross income of the estate for the tax year ($3,000) is $600 or more.

To determine how much of the husband's tax liability for 2000 and 2001 is to be forgiven, the wife completes Worksheet B. She also completes Worksheet C because the forgiven tax liabilities for 2000 and 2001 (line 15 of Worksheet B) total less than $10,000.

To claim tax relief for 2000, the wife files Form 1040X and attaches a copy of Worksheet B. To claim tax relief for 2001, she files Form 1040 and attaches copies of Worksheets B and C.

  2000 2001
Wages (wife) $35,000 $36,000
Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000
Interest income (joint account) 1,000 1,100
Deduction for ½ of self-employment tax (husband) (1,766) (1,555)
Standard deduction (7,350) (7,600)
Personal exemptions (2) (5,600) (5,800)
Taxable income $46,284 $44,145
Joint income tax liability $7,257 $6,619
Plus: Self-employment tax (husband) 3,532 3,109
Total tax liability $10,789 $9,728

  2000 2001
Wages (wife) $35,000 $36,000
Net profit from Schedule C, Profit or Loss From Business (husband) 25,000 22,000
Interest income (joint account) 1,000 1,100
Deduction for ½ of self-employment tax (husband) (1,766) (1,555)
Standard deduction (7,350) (7,600)
Personal exemptions (2) (5,600) (5,800)
Taxable income $46,284 $44,145
Joint income tax liability $7,257 $6,619
Plus: Self-employment tax (husband) 3,532 3,109
Total tax liability $10,789 $9,728

Worksheet C Illustrated. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum relief of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.

1 Minimum relief amount.
Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C.		 1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2 2,400    
3 Enter the distribution deduction from line 18 (Form 1041) . 3 0    
4 Add lines 2 and 3. 4 2,400    
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5 1,000    
6 Add lines 4 and 5. 6 3,400    
7 Figure the tax on line 6 using Schedule G (Form 1041). 7 710    
8 Figure the tax on line 4 using Schedule G (Form 1041). 8 435    
9 Tax on exempt income. Subtract line 8 from line 7. 9 275    
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10 4,268    
11 Add lines 9 and 10. 11 $4,543
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12 $5,457
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

Worksheet C Illustrated. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum relief of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.

1 Minimum relief amount.
Note: Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C.		 1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2 2,400    
3 Enter the distribution deduction from line 18 (Form 1041) . 3 0    
4 Add lines 2 and 3. 4 2,400    
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5 1,000    
6 Add lines 4 and 5. 6 3,400    
7 Figure the tax on line 6 using Schedule G (Form 1041). 7 710    
8 Figure the tax on line 4 using Schedule G (Form 1041). 8 435    
9 Tax on exempt income. Subtract line 8 from line 7. 9 275    
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10 4,268    
11 Add lines 9 and 10. 11 $4,543
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12 $5,457
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

Additional Worksheets

The following additional worksheets are provided for your convenience.

Worksheet A. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or
Qualifying Widow(er))

        (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for tax forgiveness. 1      
2 Enter the total tax from the decedent's income tax return. See Table 1 on page 5 for the line number for years before 2002. 2      
3 Enter the following taxes, if any, shown on the decedent's income tax return. (These taxes are not eligible for forgiveness.)        
  a Self-employment tax. 3a      
  b Social security and Medicare tax on tip income not reported to employer. 3b      
  c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). 3c      
  d Tax on excess accumulation in qualified retirement plans. 3d      
  e Household employment taxes. 3e      
  f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. 3f      
  g Tax on golden parachute payments. 3g      
4 Add lines 3a through 3g. 4      
5 Tax to be forgiven. Subtract line 4 from line 2. 5      
Note. If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet A. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Return as Single, Married Filing Separately, Head of Household, or
Qualifying Widow(er))

        (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for tax forgiveness. 1      
2 Enter the total tax from the decedent's income tax return. See Table 1 on page 5 for the line number for years before 2002. 2      
3 Enter the following taxes, if any, shown on the decedent's income tax return. (These taxes are not eligible for forgiveness.)        
  a Self-employment tax. 3a      
  b Social security and Medicare tax on tip income not reported to employer. 3b      
  c Tax on excess contributions to IRAs, Coverdell education savings accounts (formerly Ed IRAs), or Archer MSAs (formerly medical savings accounts). 3c      
  d Tax on excess accumulation in qualified retirement plans. 3d      
  e Household employment taxes. 3e      
  f Uncollected social security and Medicare or RRTA tax on tips or group-term life insurance. 3f      
  g Tax on golden parachute payments. 3g      
4 Add lines 3a through 3g. 4      
5 Tax to be forgiven. Subtract line 4 from line 2. 5      
Note. If the total of columns (A), (B), and (C) of line 5 (including any amounts shown on line 15 of Worksheet B) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 5 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet B. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)
      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1      
2 Enter the decedent's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 2      
3 Enter the decedent's total tax. See the instructions. 3      
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4      
5 Subtract line 4 from line 3. 5      
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 6      
7 Enter the surviving spouse's total tax. See the instructions. 7      
8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 8      
9 Subtract line 8 from line 7. 9      
10 Add lines 5 and 9. 10      
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11      
12 Add lines 4 and 8. 12      
13 Subtract line 12 from line 11. 13      
14 Divide line 5 by line 10. Enter the result as a decimal. 14      
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15      
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet B. Figuring the Tax To Be Forgiven

(For Decedents Who Filed a Joint Return)
      (A)
First
Eligible Year (1994 or 2000) 		(B)
Second
Eligible Year (1995 or 2001) 		(C)
Third
Eligible Year (1996 or 2002)
1 Enter the years eligible for forgiveness. 1      
2 Enter the decedent's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 2      
3 Enter the decedent's total tax. See the instructions. 3      
4 Enter the total, if any, of the decedent's taxes not eligible for forgiveness. See the instructions. 4      
5 Subtract line 4 from line 3. 5      
6 Enter the surviving spouse's taxable income. Figure taxable income as if a separate return had been filed. See the instructions. 6      
7 Enter the surviving spouse's total tax. See the instructions. 7      
8 Enter the total, if any, of the surviving spouse's taxes listed in the instructions for line 4. 8      
9 Subtract line 8 from line 7. 9      
10 Add lines 5 and 9. 10      
11 Enter the total tax from the joint return. See Table 1 on page 5 for the line number for years before 2002. 11      
12 Add lines 4 and 8. 12      
13 Subtract line 12 from line 11. 13      
14 Divide line 5 by line 10. Enter the result as a decimal. 14      
15 Tax to be forgiven. Multiply line 13 by line 14 and enter the result. 15      
Note. If the total of columns (A), (B), and (C) of line 15 (including any amounts shown on line 5 of Worksheet A) is less than $10,000, also complete Worksheet C.
  • Attach the computation of the tax to be forgiven or a copy of this worksheet to the decedent's final income tax return or amended tax return (Form 1040X) for each year listed on line 1.
  • If filing Form 1040X for an eligible year, enter the amount from line 15 above on Form 1040X in column B of line 10 as a decrease in tax. The IRS will determine the amount to be refunded.

Worksheet C. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.
1 Minimum tax forgiveness.
Note. Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 		1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2      
3 Enter the distribution deduction from line 18 (Form 1041) . 3      
4 Add lines 2 and 3. 4      
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5      
6 Add lines 4 and 5. 6      
7 Figure the tax on line 6 using Schedule G (Form 1041). 7      
8 Figure the tax on line 4 using Schedule G (Form 1041). 8      
9 Tax on exempt income. Subtract line 8 from line 7. 9      
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10      
11 Add lines 9 and 10. 11  
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12  
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

Worksheet C. Amount Treated as Tax Payment for Decedent's Last Tax Year

Caution: The decedent is entitled to minimum tax forgiveness of $10,000. Complete this worksheet only if the total tax forgiven for all eligible years is less than $10,000.
1 Minimum tax forgiveness.
Note. Before completing lines 2–9, see Instructions for lines 2–9 of Worksheet C. 		1 $10,000
2 Enter the taxable income from line 22 (Form 1041) 2      
3 Enter the distribution deduction from line 18 (Form 1041) . 3      
4 Add lines 2 and 3. 4      
5
Enter exempt income received after death minus expenses allocable to exempt income. (See Income received after date of death on page 5.) 5      
6 Add lines 4 and 5. 6      
7 Figure the tax on line 6 using Schedule G (Form 1041). 7      
8 Figure the tax on line 4 using Schedule G (Form 1041). 8      
9 Tax on exempt income. Subtract line 8 from line 7. 9      
10

Enter the total of columns (A)–(C) from line 5 of Worksheet A or line 15 of Worksheet B. If the decedent was not required to file tax returns for the eligible tax years, enter -0-. 10      
11 Add lines 9 and 10. 11  
12 Additional payment allowed. If line 11 is $10,000 or more, enter -0- and stop here. No additional amount is allowed as a tax payment. Otherwise, subtract line 11 from line 1 and enter the result. 12  
Note. The amount on line 12 is allowed as a tax payment for the decedent's last tax year (usually 1995 or 2001).
  • Attach the computation of the additional payment allowed or a copy of this worksheet to the original or amended income tax return for the decedent's last tax year. If filing Form 1040, include the amount from line 12 above on the “Other payments” line of the form. Write "Sec. 692(d)(2) Payment" and the amount to the right of the entry space. Also indicate whether a Form 1041 is being filed for the decedent's estate.
  • If filing Form 1040X, include the amount from line 12 above on Form 1040X on line 15, columns (B) and (C). Write “Sec. 692(d)(2) Payment” on the dotted line to the left of the entry space.

How To Get Tax Help

Special IRS assistance.

The IRS is providing special help for those affected by the terrorist attacks, as well as survivors and personal representatives of the victims. We have set up a special toll-free number for people who may have trouble filing or paying their taxes because they were affected by the terrorist attacks, or who have other tax issues related to the attacks.


Call 1–866–562–5227
Monday through Friday
In English–7 a.m. to 10 p.m. local time
In Spanish–8 a.m. to 9:30 p.m. local time

The IRS web site at www.irs.gov has notices and other tax relief information. Check it periodically for any new guidance or to see if Congress has enacted new legislation.

Business taxpayers affected by the attacks can e-mail their questions to corp.disaster.relief@irs.gov.

For current information on Presidentially declared disaster areas, check the Federal Emergency Management Agency Web site at www.fema.gov.

Other help from the IRS.

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get more information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.

Contacting your Taxpayer Advocate.

If you have attempted to deal with an IRS problem unsuccessfully, you should contact your Taxpayer Advocate.

The Taxpayer Advocate represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels. While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

To contact your Taxpayer Advocate:

  • Call the Taxpayer Advocate at 1–877–777–4778.
  • Call the IRS at 1–800–829–1040.
  • Call, write, or fax the Taxpayer Advocate office in your area.
  • Call 1–800–829–4059 if you are a TTY/TDD user.

For more information, see Publication 1546, The Taxpayer Advocate Service of the IRS.

Free tax services.

To find out what services are available, get Publication 910, Guide to Free Tax Services. It contains a list of free tax publications and an index of tax topics. It also describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.

Access by computer

Personal computer. With your personal computer and modem, you can access the IRS on the Internet at www.irs.gov. While visiting our web site, you can:

  • Find answers to questions you may have.
  • Download forms and publications or search for forms and publications by topic or keyword.
  • View forms that may be filled in electronically, print the completed form, and then save the form for recordkeeping.
  • View Internal Revenue Bulletins published in the last few years.
  • Search regulations and the Internal Revenue Code.
  • Receive our electronic newsletters on hot tax issues and news.
  • Get information on starting and operating a small business.

You can also reach us with your computer using File Transfer Protocol at ftp.irs.gov.

Request information by fax

TaxFax Service. Using the phone attached to your fax machine, you can receive forms and instructions by calling 703–368–9694. Follow the directions from the prompts. When you order forms, enter the catalog number for the form you need. The items you request will be faxed to you.

For help with transmission problems, call the FedWorld Help Desk at 703–487–4608.

Request information by phone

Phone. Many services are available by phone.

  • Ordering forms, instructions, and publications. Call 1–800–829–3676 to order current and prior year forms, instructions, and publications.
  • Asking tax questions. Call the IRS with your tax questions at 1–800–829–1040.
  • TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1–800–829–4059 to ask tax questions or to order forms and publications.
  • TeleTax topics. Call 1–800–829–4477 to listen to pre-recorded messages covering various tax topics.


Evaluating the quality of our telephone services. To ensure that IRS representatives give accurate, courteous, and professional answers, we evaluate the quality of our telephone services in several ways.

  • A second IRS representative sometimes monitors live telephone calls. That person only evaluates the IRS assistor and does not keep a record of any taxpayer's name or tax identification number.
  • We sometimes record telephone calls to evaluate IRS assistors objectively. We hold these recordings no longer than one week and use them only to measure the quality of assistance.
  • We value our customers' opinions. Throughout this year, we will be surveying our customers for their opinions on our service.

Request most forms at post offices and libraries.

Walk-in. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county governments, credit unions, and office supply stores have an extensive collection of products available to print from a CD-ROM or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.

Envelope

Mail. You can send your order for forms, instructions, and publications to the nearest Distribution Center and receive a response within 10 workdays after your request is received. Find the address that applies to your part of the country.

  • Western part of U.S.:
    Western Area Distribution Center
    Rancho Cordova, CA 95743–0001
  • Central part of U.S.:
    Central Area Distribution Center
    P.O. Box 8903
    Bloomington, IL 61702–8903
  • Eastern part of U.S. and foreign addresses:
    Eastern Area Distribution Center
    P.O. Box 85074
    Richmond, VA 23261–5074

Request information on CDROM

CD-ROM. You can order IRS Publication 1796, Federal Tax Products on CD-ROM, and obtain:

  • Current tax forms, instructions, and publications.
  • Prior-year tax forms and instructions.
  • Popular tax forms that may be filled in electronically, printed out for submission, and saved for recordkeeping.
  • Internal Revenue Bulletins.

The CD-ROM can be purchased from National Technical Information Service (NTIS) by calling 1–877–233–6767 or on the Internet at www.irs.gov.

IRS Publication 3207, Small Business Resource Guide, is an interactive CD-ROM that contains information important to small businesses. You can get a free copy by calling 1–800–829–3676 or visiting the IRS web site at www.irs.gov.

Tax Publications for Individuals

Tax Publications for Individuals


Please click the link to view the image.

List of Business Publications and Forms

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