A Message From the Commissioner
Paying taxes is a unifying experience fundamental to democracy and the rule of law. Each year, almost two hundred million
taxpayers carry out this
vital obligation by filing their return. The Internal Revenue Service seeks to help people understand and pay taxes as easily
More than half of all taxpayers file their taxes electronically. E-filing not only generates fewer errors than paper, but also ensures
faster refunds. Many returns are e-filed by tax preparers, but increasing numbers come straight from home computers. Taxpayers with an
adjusted gross income of $50,000 or less can e-file for free. Instructions for electronic filing and Free File can be found on our website
To protect the honest taxpayer, we have strengthened enforcement of the tax laws. The vast majority of taxpayers pay honestly
and accurately, and
they have every right to expect their neighbors and competitors to do the same. Over the past several years, IRS audits and
collections have risen
significantly, and tax laws and regulations have been toughened.
If you need more information about taxes, visit
www.irs.gov. Learn how to file taxes, obtain tax forms, and find out if you are
eligible for the earned income credit. You may also call our toll-free numbers: 1-800-829-1040 for individuals and 1-800-829-4933
Please do not hesitate to contact us if you need help. We hope this packet is useful to you.
Mark W. Everson
Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying
the tax law with
integrity and fairness to all.
Quick and Easy Access to Tax Help and Forms
If you live outside the United States, see Pub. 54 to find out how to get help and forms.
You can access the IRS website 24 hours a day,
7 days a week, at
Access commercial tax preparation and e-file services available free
to eligible taxpayers;
Check the status of your 2006 refund;
Download forms, instructions, and publications;
Order IRS products online;
Research your tax questions online;
Search publications online by topic or keyword;
Figure your withholding allowances using our
Withholding Calculator; and
Sign up to receive local and national tax news by email.
You can order forms, instructions, and publications by completing the order blank
on page 82. You should receive your order within 10 days after we receive your request.
You can pick up some of the most requested forms, instructions, and publications at many IRS offices, post offices, and libraries.
stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of reproducible
available to photocopy or print from a CD-ROM.
You can order forms and publications and
receive automated information by phone.
Forms and publications.
Call 1-800-TAX-FORM (1-800-829-3676) during the hours shown
on page 10 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should
receive your order
within 10 days.
Call 1-800-829-4477 24 hours a day, 7 days a week, to listen to pre-recorded messages covering about 150 tax topics.
See pages 8 and 9 for a list of the topics.
You can check the status of your 2006 refund 24 hours a day, 7 days a week.
See page 8 for details.
IRS Tax Products CD
You can order Publication 1796, IRS Tax Products CD, and obtain:
Current-year forms, instructions, and publications.
Prior-year forms, instructions, and publications.
Bonus: Historical Tax Products DVD - Ships with the final release.
Tax Map: an electronic research tool and finding aid.
Tax law frequently asked questions.
Tax Topics from the IRS telephone response system.
Fill-in, print, and save features for most tax forms.
Internal Revenue Bulletins.
Toll-free and email technical support.
The CD is released twice during the year. The first release will ship the beginning of January and the final release will
ship the beginning of
Buy the CD from National Technical Information Service at
www.irs.gov/cdorders for $25 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll-free
to buy the CD for $25 (plus a $5 handling fee). Price is subject to change.
Other ways to get help.
page 65 for information.
All topics are available in Spanish.
IRS services—Volunteer tax assistance, toll-free telephone, walk-in assistance, and outreach programs
Tax assistance for individuals with disabilities and the hearing impaired
Tax help for small businesses and the self-employed
Taxpayer Advocate Service—Help for problem situations
Armed Forces tax information
Tax relief in disaster situations
Your appeal rights
Refunds—How long they should take
What to do if you haven't filed your tax return
2006 Form W-2 and Form 1099-R—What to do if not received
Forms and publications—How to order
Copy of your tax return—How to get one
Change of address—How to notify IRS
Ensuring proper credit of payments
Prior year(s) Form W-2—How to get a copy of
The collection process
Tax payment options
Failure to pay child support and federal nontax and state income tax obligations
Offers in compromise
Innocent spouse relief (and separation of liability and equitable relief)
Alternative Filing Methods
Substitute tax forms
How to choose a paid tax preparer
When, where, and how to file
Highlights of tax changes
Checklist of common errors when preparing your tax return
Extension of time to file your tax return
Penalty for underpayment of estimated tax
Roth IRA contributions
Coverdell education savings accounts
Power of attorney information
Qualified tuition programs (QTPs)
Filing Requirements, Filing Status, and Exemptions
Who must file?
Which form—1040, 1040A, or 1040EZ?
What is your filing status?
Tax information for parents of kidnapped children
Wages and salaries
Refunds of state and local taxes
Capital gains and losses
Pensions and annuities
Pensions—The general rule and the simplified method
Rollovers from retirement plans
Rental income and expenses
Renting residential and vacation property
Farming and fishing income
Earnings for clergy
Gambling income and expenses
Scholarship and fellowship grants
Social security and equivalent railroad retirement benefits
Passive activities—Losses and credits
Roth IRA distributions
Traders in securities (information for Form 1040 filers)
Exchange of policyholder interest for stock
Individual retirement arrangements (IRAs)
Bad debt deduction
Student loan interest deduction
Should I itemize?
Medical and dental expenses
Home mortgage points
Casualty and theft losses
Business use of home
Business use of car
Business travel expenses
Business entertainment expenses
Employee business expenses
Casualty, disaster, and theft losses
Tax and credits figured by the IRS
Tax on a child's investment income
Ten-year tax option for lump-sum distributions
Alternative minimum tax
Tax on early distributions from traditional and Roth IRAs
Tax on early distributions from retirement plans
Earned income credit (EIC)
Child and dependent care credit
Credit for the elderly or the disabled
Advance earned income credit
Child tax credits
Excess social security and RRTA tax withheld
Retirement savings contributions credit
Notices—What to do
Notice of underreported income—CP 2000
IRS notices and bills, penalties, and interest charges
Basis of Assets, Depreciation, and Sale of Assets
Sale of your home
Basis of assets
Social security and Medicare withholding rates
Form W-2—Where, when, and how to file
Form W-4—Employee's Withholding Allowance Certificate
Form W-5—Advance earned income credit
Employer identification number (EIN)—How to apply
Employment taxes for household employees
Form 941—Deposit requirements
Form 941—Employer's Quarterly Federal Tax Return
Form 940—Deposit requirements
Form 940—Employer's Annual Federal Unemployment Tax Return
Tips—Withholding and reporting
Independent contractor vs. employee
Electronic Magnetic Media Filers—1099 Series and Related Information Returns
Who must file magnetically
Applications, forms, and information
Waivers and extensions
Test files and combined federal and state filing
Electronic filing of information returns
Tax Information for Aliens and U.S. Citizens Living Abroad
Resident and nonresident aliens
Foreign earned income exclusion—General
Foreign earned income exclusion—Who qualifies?
Foreign earned income exclusion—What qualifies?
Foreign tax credit
Individual taxpayer identification number (ITIN)—Form W-7
Alien tax clearance
Topic numbers are effective
Tax Information for Puerto Rico Residents (in Spanish only)
Is a person with income from Puerto Rican sources required to file a federal income tax return?
Credits and deductions for taxpayers with Puerto Rican source income that is exempt from U.S. tax
Federal employment taxes for employers in Puerto Rico
Tax assistance for Puerto Rico residents
January 1, 2007.
If you cannot find the answer to your question using one of the methods listed on page 7, please call us for assistance at
1-800-829-1040. You will
not be charged for the call unless your phone company charges you for toll-free calls. Our normal hours of operation are Monday
through Friday from
7:00 a.m. to 10:00 p.m. local time. Assistance provided to callers from Alaska and Hawaii will be based on the hours of operation
in the Pacific time
If you want to check the status of your 2006 refund, see Refund Information
on page 8.
IRS representatives care about the quality of the service provided to you, our customer. You can help us provide accurate,
complete answers to your
questions by having the following information available.
The tax form, schedule, or notice to which your question relates.
The facts about your particular situation. The answer to the same question often varies from one taxpayer to another because
in their age, income, whether they can be claimed as a dependent, etc.
The name of any IRS publication or other source of information that you used to look for the answer.
To maintain your account security, you may be asked for the following information, which you should also have available.
Your social security number.
The amount of refund and filing status shown on your tax return.
The “Caller ID Number” shown at the top of any notice you received.
Your personal identification number (PIN) if you have one.
Your date of birth.
The numbers in your street address.
Your ZIP code.
If you are asking for an installment agreement to pay your tax, you will be asked for the highest amount you can pay each
month and the date on
which you can pay it.
Evaluation of services provided.
The IRS uses several methods to evaluate our telephone service. One method is to record telephone calls for quality
purposes only. A random sample
of recorded calls is selected for review through the quality assurance process. Other methods include listening to live calls
in progress and random
selection of customers for participation in a customer satisfaction survey.
Call 1-800-829-1040 (deaf customers with access to TTY/TDD equipment may call 1-800-829-4059). Our menu allows you to speak
your responses or use
your keypad to select a menu option. After receiving your menu selection, the system will direct your call to the appropriate
assistance. You can do
the following within the system.
Order tax forms and publications.
Find out what you owe.
Determine if we have adjusted your account or received payments you made.
Request a transcript of your tax return or account.
Find out where to send your tax return or payment.
Request more time to pay or set up a monthly installment agreement.
Find out if you qualify for innocent spouse relief.
If you do not fully understand the answer you receive, or you feel our representative may not fully understand your question,
needs to know this. He or she will be happy to take additional time to be sure your question is answered fully.
By law, you are responsible for paying your share of federal income tax. If we should make an error in answering your question,
you are still
responsible for the payment of the correct tax. Should this occur, however, you will not be charged any penalty.