Daily OID.  The OID for any accrual period is allocated equally to each day in the accrual period. You must include in income the sum of the daily OID amounts for each day you hold the debt instrument during the year. Since your tax year will usually include parts of two or more accrual periods, you must include the proper daily OID amounts for each accrual period.

Figuring daily OID.  For the initial accrual period of a stripped bond or coupon acquired after 1984, figure the daily OID using Formula 1, next, if there are equal accrual periods. Use Formula 2 if there is a short initial accrual period.

For subsequent accrual periods, figure the daily OID using Formula 1 (whether or not there was a short initial accrual period), but use the adjusted acquisition price in the formula instead of the acquisition price.

Formula 1 -  

	ap × ytm / n
	p

Formula 2 -  

r s

	ap x (1 + ytm /n) - ap
	r

ap	=	acquisition price
ytm	=	yield to maturity
n	=	number of accrual periods in 1 year
p	=	number of days in accrual period
r	=	number of days from purchase to end of short accrual period
s	=	number of days in accrual period ending on last day of short accrual period

The rules for figuring OID on these instruments are similar to those illustrated in Example 15 and Example 16, earlier, under Debt Instruments Issued After 1984.

Example 24.  Assume the same facts as in Example 23, and that you held the coupon for the rest of 2002.

For the short initial accrual period from May 31, 2002, through August 12, 2002, the daily OID is figured using Formula 2, as follows.

74 181

	$60,000 × (1 + .08406/2)  - $60,000
	74
	=	$1,018.48	= $13.76327
		74

The OID for this period is $1,018.48 ($13.76327 × 74 days).

For the second accrual period from August 13, 2002, through February 12, 2003, the adjusted acquisition price is $61,018.48. This is the original $60,000 acquisition price plus $1,018.48 OID for the short initial accrual period. The daily OID is figured using Formula 1, as follows.

	$61,018.48 × (.08406/2)   184
	=	$2,564.60671	= $13. 93808
		184

The OID for the part of this period included in 2002 (August 13 - December 31) is $1,965.27 ($13.93808 × 141 days).

The OID to be reported on your 2002 tax return is $2,983.75 ($1,018.48 + $1,965.27).

Final accrual period.  The OID for the final accrual period for a stripped bond or coupon is the amount payable at maturity of the stripped bond (or interest payable on the stripped coupon) minus the adjusted acquisition price at the beginning of the final accrual period. The daily OID for the final accrual period is figured by dividing the OID for the period by the number of days in the period.

How To Get Tax Help

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, 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.

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:

• See answers to frequently asked tax questions or request help by e-mail.
• Download forms and publications or search for forms and publications by topic or keyword.
• Order IRS products on-line.
• 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.
• Learn about the benefits of filing electronically (IRS e-file).
• 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.

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.

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 1-800-829-4933.
• Solving problems. Take advantage of Everyday Tax Solutions service by calling your local IRS office to set up an in-person appointment at your convenience. Check your local directory assistance or www.irs.gov for the numbers.
• 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 use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to sometimes listen in on or record telephone calls. Another is to ask some callers to complete a short survey at the end of the call.

Walk-in. Many products and services are available on a walk-in basis.

• Products. 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.
• Services. You can walk in to your local IRS office to ask tax questions or get help with a tax problem. Now you can set up an appointment by calling your local IRS office number and, at the prompt, leaving a message requesting Everyday Tax Solutions help. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience.

Mail. You can send your order for forms, instructions, and publications to the Distribution Center nearest to you 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

CD-ROM for tax products. 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 http://www.irs.gov/cdorders. The first release is available in early January and the final release is available in late February.

CD-ROM for small businesses. IRS Publication 3207, Small Business Resource Guide, is a must for every small business owner or any taxpayer about to start a business. This handy, interactive CD contains all the business tax forms, instructions and publications needed to successfully manage a business. In addition, the CD provides an abundance of other helpful information, such as how to prepare a business plan, finding financing for your business, and much more. The design of the CD makes finding information easy and quick and incorporates file formats and browsers that can be run on virtually any desktop or laptop computer.

It is available in March. You can get a free copy by calling 1-800-829-3676 or by visiting the website at www.irs.gov/smallbiz.

Name of Issuer	XYZ Corp
CUSIP Number	123456AA
Issue Date	08/01/84
Maturity Date	08/01/04
Issue Price (Percent of Principal Amount)	90.0
Annual Stated Interest Rate	13.0
Total OID to 1/1/02	68.47
Daily OID per $1,000 of Maturity Value for 1st Period 2002	.028399
Daily OID per $1,000 of Maturity Value for 2nd Period 2002	.032534
Daily OID per $1,000 of Maturity Value for 1st Period 2003	.037270
OID per $1,000 of Maturity Value for Calendar Year 2002	11.00
OID per $1,000 of Maturity Value for Calendar Year 2003	12.60

1.	CUSIP Number - The CUSIP number identifies the debt instrument. The first six digits of the CUSIP number represent the issuer and the last two digits identify the particular issue. The ninth, or check digit, is omitted for most debt instruments issued before 1985.		same month and day as the date of issue of the instrument. In the above example, the first accrual period shown for 2002 for XYZ bond is 8/1/01-7/31/02. The part of this accrual period that falls in 2002 is from 1/1/02-7/31/02. For each $1,000 principal amount of the bond, the OID is .028399 each day you held the bond during this accrual period. Similarly, the part of the second accrual period in 2002 is from 8/1/02-12/31/02. The OID is .032534 for each day you held the bond during this accrual period. The OID for each day you held a debt instrument in 2003 is determined in the same manner, using the daily OID applicable to the part of each accrual period falling in 2003. If you bought the debt instrument after original issue and paid an acquisition premium, see Debt Instruments Issued After July 1, 1982, and Before 1985, earlier, for more information.
2.	Issue Date - This is the date of original issue, which is generally the date on which the instrument was first sold to the public at the issue price.
3.	Maturity Date - This is the date the debt instrument matures and is redeemable at its full principal amount. For example, if the bond of XYZ Corp. above has a principal amount of $1,000, the holder will be paid $1,000 when he or she redeems it on August 1, 2004 (maturity date).
4.	Issue Price (Percent of Principal Amount) - In general, the issue price is the initial offering price at which a substantial amount of the debt instruments are sold to the public. In the above example, XYZ bonds were first offered to the public at $900. Since they have a principal amount of $1,000, the issue price expressed as a percent of principal amount is 90.		NOTE. For corporate debt instruments issued after 1984 (listed in Section I-B), the columns for the daily OID amounts are increased to include the number of 6-month accrual periods that apply to these instruments during 2002 and 2003. The 2002 OID is determined by using the daily OID for the 3 periods for the year. Although each accrual period is 6 months long, a 6-month period may extend into the next calendar year.
5.	Annual Stated Interest Rate - This is the rate of annual interest payments. In the above example, XYZ bond has a stated interest rate of 13% and pays $130 a year for each $1,000 principal amount of the bond.	8.	OID for 2002 and 2003 (Per $1,000 of Maturity Value) - The amount appearing in the 2002 column is the total OID if you held the instrument the entire year or the part it was outstanding. For debt instruments entirely called or maturing in 2002, the amount is computed to the date of call or maturity. In the above example, if you held XYZ bond for all of 2002, the OID is $11.00 for each $1,000 principal amount of the bond. If you did not hold the bond for the entire year, use the daily OID for each accrual period in 2002. (See Figuring OID, earlier, for more detailed information.) Similarly, the amount appearing in the 2003 column is the total OID if you held the instrument for the entire year or the part it was outstanding. If you bought the instrument after original issue and paid an acquisition premium, see Debt Instruments Issued After July 1, 1982, and Before 1985, earlier, for more information.
6.	Total OID to 1/1/02 - This shows the total OID accumulated on the debt instrument from the date of original issue to 1/1/02. (This information is not available for all instruments listed.)
7.	Daily OID in 2002 and 2003 - This is the OID for each day you held the debt instrument during the accrual periods falling in 2002 and 2003. (The daily OID for the second accrual period in 2002 and the first accrual period in 2003 are identical.) For corporate debt instruments issued after July 1, 1982, and before 1985, an accrual period is a 1-year period beginning on the

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