Inventories
An inventory is necessary to clearly show income when the
production, purchase, or sale of merchandise is an income-producing
factor. If you must account for an inventory in your business, you
must use an accrual method of accounting for your purchases and sales.
However, see Cash Method of Accounting for Qualifying Taxpayers,
earlier. See also Accrual Method, earlier.
To figure taxable income, you must value your inventory at the
beginning and end of each tax year. To determine the value, you need a
method for identifying the items in your inventory and a
method for valuing these items. See Identifying Cost
and Valuing Inventory, later.
The rules for valuing inventory cannot be the same for all kinds of
businesses. The method you use must conform to generally accepted
accounting principles for similar businesses and must clearly reflect
income. Your inventory practices must be consistent from year to year.
The rules discussed here apply only if they do not conflict with
the uniform capitalization rules of section 263A and the
mark-to-market rules of section 475.
Items Included in Inventory
Your inventory should include all of the following.
- Merchandise or stock in trade.
- Raw materials.
- Work in process.
- Finished products.
- Supplies that physically become a part of the item intended
for sale.
Merchandise.
Include the following merchandise in inventory.
- Purchased merchandise if title has passed to you, even if
the merchandise is in transit or you do not have physical possession
for another reason.
- Goods under contract for sale that you have not yet
segregated and applied to the contract.
- Goods out on consignment.
- Goods held for sale in display rooms, merchandise mart
rooms, or booths located away from your place of business.
C.O.D. mail sales.
If you sell merchandise by mail and intend payment and delivery to
happen at the same time, title passes when payment is made. Include
the merchandise in your closing inventory until the buyer pays for it.
Containers.
Containers such as kegs, bottles, and cases, regardless of whether
they are on hand or returnable, should be included in inventory if
title has not passed to the buyer of the contents. If title has passed
to the buyer, exclude the containers from inventory. Under certain
circumstances, some containers can be depreciated. See Publication
946.
Merchandise not included.
Do not include the following merchandise in inventory.
- Goods you have sold, but only if title has passed to the
buyer.
- Goods consigned to you.
- Goods ordered for future delivery if you do not yet have
title.
Assets.
Do not include the following in inventory.
- Land, buildings, and equipment used in your business.
- Notes, accounts receivable, and similar assets.
- Real estate held for sale by a real estate dealer in the
ordinary course of business.
- Supplies that do not physically become part of the item
intended for sale.
Special rules apply to the cost of inventory or property imported
from a related person. See the regulations under section 1059A.
Identifying Cost
You can use any of the following methods to identify the cost of
items in inventory.
Specific Identification Method
Use the specific identification method when you can identify and
match the actual cost to the items in inventory.
Use the FIFO or LIFO method, explained next, if:
- You cannot specifically identify items with their
costs.
- The same type of goods are intermingled in your inventory
and they cannot be identified with specific invoices.
FIFO Method
The FIFO (first-in first-out) method assumes the items you
purchased or produced first are the first items you sold, consumed, or
otherwise disposed of. The items in inventory at the end of the tax
year are matched with the costs of similar items that you most
recently purchased or produced.
LIFO Method
The LIFO (last-in first-out) method assumes the items of inventory
you purchased or produced last are the first items you sold, consumed,
or otherwise disposed of. Items included in closing inventory are
considered to be from the opening inventory in the order of
acquisition and from those acquired during the tax year.
LIFO rules.
The rules for using the LIFO method are very complex. Two are
discussed briefly here. For more information on these and other LIFO
rules, see sections 472 through 474 and the corresponding regulations.
Dollar-value method.
Under the dollar-value method of pricing LIFO inventories, goods
and products must be grouped into one or more pools (classes of
items), depending on the kinds of goods or products in the
inventories. See section 1.472-8 of the regulations.
Simplified dollar-value method.
Under this method, you establish multiple inventory pools in
general categories from appropriate government price indexes. You then
use changes in the price index to estimate the annual change in price
for inventory items in the pools.
An eligible small business (average annual gross receipts of $5
million or less for the 3 preceding tax years) can elect the
simplified dollar-value LIFO method.
For more information, see section 474. Taxpayers who cannot use the
method under section 474 should see section1.472-8(e)(3) of the
regulations for a similar simplified dollar-value method.
Adopting LIFO method.
File Form 970, Application To Use LIFO Inventory
Method,
or a statement with all the information
required on Form 970 to adopt the LIFO method. You must file the form
(or the statement) with your timely filed tax return for the year in
which you first use LIFO.
Differences Between FIFO and LIFO
Each method produces different income results, depending on the
trend of price levels at the time. In times of inflation, when prices
are rising, LIFO will produce a larger cost of goods sold and a lower
closing inventory. Under FIFO, the cost of goods sold will be lower
and the closing inventory will be higher. However, in times of falling
prices, the opposite will hold.
Valuing Inventory
The value of your inventory is a major factor in figuring your
taxable income. The method you use to value the inventory is very
important.
The following methods, described below, are those generally
available for valuing inventory.
- Cost
- Lower of cost or market
- Retail
Goods that cannot be sold.
These are goods you cannot sell at normal prices or they are
unusable in the usual way because of damage, imperfections, shop wear,
changes of style, odd or broken lots, or other similar causes,
including secondhand goods taken in exchange. You should value these
goods at their bona fide selling price minus direct cost of
disposition, no matter which method you use to value the rest of your
inventory. If these goods consist of raw materials or partly finished
goods held for use or consumption, you must value them on a reasonable
basis, considering their usability and condition. Do not value them
for less than scrap value. This method does not apply to goods
accounted for under the LIFO method.
Cost Method
To properly value your inventory at cost, you must include all
direct and indirect costs associated with it. The following rules
apply.
- For merchandise on hand at the beginning of the tax year,
cost means the ending inventory price of the goods.
- For merchandise purchased during the year, cost means the
invoice price minus appropriate discounts plus transportation or other
charges incurred in acquiring the goods. It can also include other
costs that have to be capitalized under the uniform capitalization
rules.
- For merchandise produced during the year, cost means all
direct and indirect costs that have to be capitalized under the
uniform capitalization rules.
Discounts.
A trade discount is a discount allowed regardless of
when the payment is made. Generally, it is for volume or quantity
purchases. You must reduce the cost of inventory by a trade (or
quantity) discount.
A cash discount is a reduction in the invoice or
purchase price for paying within a prescribed time period. You can
choose either to deduct cash discounts or include them in income, but
you must treat them consistently from year to year.
Lower of Cost or Market Method
Under the lower of cost or market method, compare the market value
of each item on hand on the inventory date with its cost and use the
lower of the two as its inventory value.
This method applies to the following.
- Goods purchased and on hand.
- The basic elements of cost (direct materials, direct labor,
and certain indirect costs) of goods being manufactured and finished
goods on hand.
This method does not apply to the following. They must be
inventoried at cost.
- Goods on hand or being manufactured for delivery at a fixed
price on a firm sales contract (that is, not legally subject to
cancellation by either you or the buyer).
- Goods accounted for under the LIFO method.
Example.
Under the lower of cost or market method, the following items would
be valued at $600 in closing inventory.
Item |
Cost |
Market |
Lower |
R |
$300 |
$500 |
$300 |
S |
200 |
100 |
100 |
T |
450 |
200 |
200 |
Total |
$950 |
$800 |
$600 |
You must value each item in the inventory separately. You cannot
value the entire inventory at cost ($950) and at market ($800) and
then use the lower of the two figures.
Market value.
Under ordinary circumstances for normal goods, market value means
the usual bid price on the date of inventory. This price is based on
the volume of merchandise you usually buy. For example, if you buy
items in small lots at $10 an item and a competitor buys identical
items in larger lots at $8.50 an item, your usual market price will be
higher than your competitor's.
Lower than market.
When you offer merchandise for sale at a price lower than market in
the normal course of business, you can value the inventory at the
lower price, minus the direct cost of disposition. Figure these prices
from the actual sales for a reasonable period before and after the
date of your inventory. Prices that vary materially from the actual
prices will not be accepted as reflecting the market.
No market exists.
If no market exists, or if quotations are nominal because of an
inactive market, you must use the best available evidence of fair
market price on the date or dates nearest your inventory date. This
evidence could include the following items.
- Specific purchases or sales you or others made in reasonable
volume and in good faith.
- Compensation amounts paid for cancellation of contracts for
purchase commitments.
Retail Method
Under the retail method, the total retail selling price of goods on
hand at the end of the tax year in each department or of each class of
goods is reduced to approximate cost by using an average markup
expressed as a percentage of the total retail selling prices.
To figure the average markup, apply the following steps in order.
- Add the total of the retail selling prices of the goods in
the opening inventory and the retail selling prices of the goods you
bought during the year (adjusted for all markups and
markdowns).
- Subtract from the total in (1) the cost of goods
included in the opening inventory plus the cost of goods you bought
during the year.
- Divide the balance in (2) by the total selling
price in (1).
Then figure the approximate cost in two steps.
- Multiply the total retail selling price by the average
markup percentage. The result is the markup in closing
inventory.
- Subtract the markup in (1) from the total retail
selling price. The result is the approximate cost.
Closing inventory.
The following example shows how to figure your closing inventory
using the retail method.
Example.
Your records show the following information on the last day of your
tax year.
|
|
Retail |
Item |
Cost |
Value |
Opening inventory |
$52,000 |
$60,000 |
Purchases |
53,000 |
78,500 |
Sales |
|
98,000 |
Markups |
|
2,000 |
Markdowns |
|
500 |
Using the retail method, figure your closing inventory as follows.
|
|
Retail |
Item |
Cost |
Value |
Opening inventory |
$52,000 |
$60,000 |
Plus: Purchases |
53,000 |
78,500 |
Net markups ($2,000 - $500 markdowns) |
|
1,500 |
Total |
$105,000 |
$140,000 |
Minus: Sales |
|
98,000 |
Closing inventory at retail |
|
$42,000 |
Minus: Markup* (.25 × $42,000) |
|
10,500 |
Closing inventory at cost |
|
$31,500 |
* See Markup percentage, next, for an explanation of how the markup percentage (25%) was figured for this example. |
|
|
Markup percentage.
The markup ($35,000) is the difference between cost ($105,000) and
the retail value ($140,000). Divide the markup by the total retail
value to get the markup percentage (25%). You cannot use arbitrary
standard percentages of purchase markup to figure markup. You must
figure it as accurately as possible from department records for the
period covered by your tax return.
Markdowns.
When figuring the retail selling price of goods on hand at the end
of the year, markdowns are recognized only if the goods were offered
to the public at the reduced price. Markdowns not based on an actual
reduction of retail sales price, such as those based on depreciation
and obsolescence, are not allowed.
Retail method with LIFO.
If you use LIFO with the retail method, you must adjust your retail
selling prices for markdowns as well as markups.
Price index.
If you are using the retail method and LIFO, adjust the inventory
value, determined using the retail method, at the end of the year to
reflect price changes since the close of the preceding year.
Generally, to make this adjustment, you must develop your own retail
price index based on an analysis of your own data under a method
acceptable to the IRS. However, a department store using LIFO that
offers a full line of merchandise for sale can use an inventory price
index provided by the Bureau of Labor Statistics. Other sellers can
use this index if they can demonstrate the index is accurate,
reliable, and suitable for their use. For more information, see
Revenue Ruling 75-181, in Cumulative Bulletin 1975-1.
Retail method without LIFO.
If you do not use LIFO and have been figuring your inventory under
the retail method except that, to approximate the lower of cost or
market, you have followed the consistent practice of adjusting the
retail selling prices of goods for markups (but not markdowns), you
can continue that practice. The adjustments must be bona fide,
consistent, and uniform and you must also exclude markups made to
cancel or correct markdowns. The markups you include must be reduced
by markdowns made to cancel or correct the markups.
If you do not use LIFO and you previously figured inventories
without eliminating markdowns in making adjustments to retail selling
prices, you can continue this practice only if you first get IRS
approval. You can adopt and use this practice on the first tax return
you file for the business, subject to IRS approval on examination of
your tax return.
Figuring income tax.
Resellers who use the retail method of pricing inventories can
figure their tax on that basis.
To use this method, you must do all the following.
- State that you are using the retail method on your tax
return.
- Keep accurate records.
- Use this method each year unless the IRS allows you to
change to another method.
You must keep records for each separate department or class of
goods carrying different percentages of gross profit. Purchase records
should show the firm name, date of invoice, invoice cost, and retail
selling price. You should also keep records of the respective
departmental or class accumulation of all purchases, markdowns, sales,
stock, etc.
Perpetual or Book Inventory
You can figure the cost of goods on hand by either a perpetual or
book inventory if inventory is kept by following sound accounting
practices. Inventory accounts must be charged with the actual cost of
goods purchased or produced and credited with the value of goods used,
transferred, or sold. Credits must be figured on the basis of the
actual cost of goods acquired during the year and their inventory
value at the beginning of the tax year.
Physical inventory.
You must take a physical inventory at reasonable intervals and the
book figure for inventory must be adjusted to agree with the actual
inventory.
Loss of Inventory
You claim a casualty or theft loss of inventory, including items
you hold for sale to customers, through the increase in the cost of
goods sold by properly reporting your opening and closing inventories.
You cannot claim the loss again as a casualty or theft loss. Any
insurance or other reimbursement you receive for the loss is taxable.
You can choose to take the loss separately as a casualty or theft
loss. If you take the loss separately, adjust opening inventory or
purchases to eliminate the loss items and avoid counting the loss
twice.
If you take the loss separately, reduce the loss by the
reimbursement you receive or expect to receive. If you do not receive
the reimbursement by the end of the year, you cannot claim a loss for
any amounts you reasonably expect to recover.
Creditors or suppliers.
If your creditors forgive part of what you owe them because of your
inventory loss, this amount is treated as income and is taxable.
Disaster loss.
If your inventory loss is due to a disaster in an area determined
by the President of the United States to be eligible for federal
assistance, you can choose to deduct the loss on your return for the
immediately preceding year. However, you must also decrease your
opening inventory for the year of the loss so the loss will not show
up again in inventory.
Uniform Capitalization Rules
Under the uniform capitalization rules, you must capitalize the
direct costs and part of the indirect costs for production or resale
activities. Include these costs in the basis of property you produce
or acquire for resale, rather than claiming them as a current
deduction. You recover the costs through depreciation, amortization,
or cost of goods sold when you use, sell, or otherwise dispose of the
property.
Special uniform capitalization rules apply to a farming business.
See chapter 7 in Publication 225.
Activities subject to the rules.
You are subject to the uniform capitalization rules if you do any
of the following, unless the property is produced for your use other
than in a trade or business or an activity carried on for profit.
- Produce real or tangible personal property.
- Acquire property for resale. However, this rule does not
apply to personal property if your average annual gross receipts are
$10 million or less.
Producing property.
You produce property if you construct, build, install, manufacture,
develop, improve, create, raise, or grow the property. Property
produced for you under a contract is treated as produced by you to the
extent you make payments or otherwise incur costs in connection with
the property.
Tangible personal property.
Tangible personal property includes films, sound recordings, video
tapes, books, artwork, photographs, or similar property containing
words, ideas, concepts, images, or sounds. However, free-lance
authors, photographers, and artists are exempt from the uniform
capitalization rules if they qualify.
Exceptions.
The uniform capitalization rules do not apply to:
- Resellers of personal property with average annual gross
receipts of $10 million or less.
- Property produced to use as personal or nonbusiness property
or for uses not connected with a trade or business or an activity
conducted for profit.
- Research and experimental expenditures deductible under
section 174.
- Intangible drilling and development costs of oil and gas or
geothermal wells or any amortization deduction allowable under section
59(e) for intangible drilling, development, or mining exploration
expenditures.
- Property produced under a long-term contract, except for
certain home construction contracts described in section
460(e)(1).
- Timber and certain ornamental trees raised, harvested, or
grown, and the underlying land.
- Qualified creative expenses incurred as a free-lance
(self-employed) writer, photographer, or artist that are otherwise
deductible on your tax return.
- Costs allocable to natural gas acquired for resale to the
extent these costs would otherwise be allocable to cushion gas
stored underground.
- Property produced if substantial construction occurred
before March 1, 1986.
- Property provided to customers in connection with providing
services. It must be de minimus in amount and not be inventory in the
hands of the service provider.
- Loan origination.
- The costs of certain producers who use a simplified
production method and whose total indirect costs are $200,000 or less.
See section 1.263A-2(b)(3)(iv) of the regulations for more
information.
Qualified creative expenses.
Qualified creative expenses are expenses paid or incurred by a
free-lance (self-employed) writer, photographer, or artist whose
personal efforts create (or can reasonably be expected to create)
certain properties. These expenses do not include expenses related to
printing, photographic plates, motion picture films, video tapes, or
similar items.
These individuals are defined as follows.
- A writer is an individual who creates a literary manuscript,
a musical composition (including any accompanying words), or a dance
score.
- A photographer is an individual who creates a photograph or
photographic negative or transparency.
- An artist is an individual who creates a picture, painting,
sculpture, statue, etching, drawing, cartoon, graphic design, or
original print item. The originality and uniqueness of the item
created and the predominance of aesthetic value over utilitarian value
of the item created are taken into account.
Personal service corporation.
The exemption for writers, photographers, and artists also applies
to an expense of a personal service corporation that directly relates
to the activities of the qualified employee-owner. A qualified
employee-owner is a writer, photographer, or artist who owns, with
certain members of his or her family, substantially all the stock of
the corporation.
Inventories.
If you must adopt the uniform capitalization rules, revalue the
items or costs included in beginning inventory for the year of change
as if the capitalization rules had been in effect for all prior
periods. When revaluing inventory costs, the capitalization rules
apply to all inventory costs accumulated in prior periods. An
adjustment is required under section 481(a). It is the difference
between the original value of the inventory and the revalued
inventory.
If you must capitalize costs for production and resale activities,
you are required to make this change. If you make the change for the
first tax year you are subject to the uniform capitalization rules, it
is an automatic change of accounting method that does not need IRS
approval. Otherwise, IRS approval is required to make the change.
More information.
For information about the uniform capitalization rules, see the
section 263A regulations.
Change in Accounting Method
You can generally choose any permitted accounting method when you
file your first tax return. You do not need IRS approval to choose the
initial method. You must, however, use the method consistently from
year to year and it must clearly show your income. See Accounting
Methods, earlier.
A change in your accounting method includes a change not only in
your overall system of accounting but also in the treatment of any
material item. A material item is one that affects the proper time for
inclusion of income or allowance of a deduction. Although an
accounting method can exist without treating an item consistently, an
accounting method is not established for that item, in most cases,
unless the item is treated consistently.
IRS Approval
Once you have set up your accounting method and filed your first
return, you must get IRS approval to change the method. If your
current method clearly shows your income, the IRS will weigh the need
for consistency in reporting against the need for change.
If you do not request IRS approval to change an accounting method,
the absence of IRS approval will not be accepted as a defense to any
penalty.
Approval required.
The following changes are examples of types of changes that require
IRS approval.
- A change from the cash method to an accrual method or vice
versa.
- A change in the method or basis used to value
inventory.
- A change in the method of figuring depreciation (except
certain permitted changes to the straight-line method for property
placed in service before 1981, as explained in Publication 534,
Depreciating Property Placed in Service Before
1987).
Approval not required.
The following are not changes in accounting methods and do not
require IRS approval.
- Correction of a math or posting error.
- Correction of an error in figuring tax liability (such as an
error in figuring a credit).
- An adjustment of any item of income or deduction that does
not involve the proper time for including it in income or deducting
it.
- An adjustment in the useful life of a depreciable
asset.
Filing Form 3115
In general, you must file a current Form 3115 to request a change
in either an overall accounting method or the accounting treatment of
any item. Attach any required user fee. No user fee is required for an
automatic change (discussed later).
You must file Form 3115 during the tax year for which the change is
requested. You should file as early in the year as possible to give
the IRS enough time to respond to the form before the original due
date of the return for the year of change. If you do not file a Form
3115 during the year of change, an extension to file the form will be
granted only in unusual and compelling circumstances.
The IRS normally acknowledges receipt of a completed Form 3115
within 30 days after the applicant's filing date. See the form
instructions if you do not receive an acknowledgment. The IRS does not
acknowledge receipt of Form 3115 for automatic change procedures.
Conference.
If you think the IRS may give an unfavorable response to your
request to change your accounting method, you can request a conference
when you file Form 3115. The National Office will arrange one before
the IRS formally replies to your Form 3115. If you do not specifically
request a conference, the IRS presumes you do not want one.
More than one business.
You can use different methods of accounting for separate and
distinct businesses. However, if you request a change in accounting
method for one of the businesses, the IRS will consider whether the
change creates or shifts profits or losses between the businesses and
whether the proposed method clearly reflects your income. You must
identify each business by name and method of accounting.
Incomplete Form 3115.
If your application is not properly completed according to the
instructions for a current Form 3115, you will be notified and given
21 days from the date of the notification letter to furnish the
necessary information. If you do not submit the required information
within the reply period, the IRS will not process your Form 3115.
However, the IRS can grant up to an additional 15 days to furnish the
information. Your written request for the 15-day extension must be
submitted within the 21-day period.
Taxpayers under examination.
If the IRS has contacted you to schedule an examination of any of
your returns, you can request approval to change your accounting
method under section 6 of Revenue Procedure 97-27 (or any
successor) if that method of accounting is not an issue under
consideration. You can request to make the change only under the
following circumstances.
- During the first 90 days of any tax year if you have been
under examination for at least 12 months.
- During the 120-day period following the date an examination
ends, regardless of whether a subsequent examination has begun.
- With the permission of the IRS director for your
area.
Revenue Procedure 97-27 is in Cumulative Bulletin
1997-2.
Automatic Change Procedures
These are procedures under which certain taxpayers can presume to
have IRS approval to change their method of accounting. The approval
is granted for the tax year for which the taxpayer requests a change
(year of change), if the taxpayer complies with the provisions of the
automatic change procedures. No user fee is required for an
application filed under an automatic change procedure. Generally, you
must use Form 3115 to request an automatic change. See the form
instructions and Revenue Procedure 99-49, as modified, (or any
successor), for more information. Revenue Procedure 99-49 is in
Cumulative Bulletin 1999-2.
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 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.
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 select:
- Frequently Asked Tax Questions (located under
Taxpayer Help & Ed) to find answers to questions you
may have.
- Forms & Pubs to download forms and
publications or search for forms and publications by topic or
keyword.
- Fill-in Forms (located under Forms &
Pubs) to enter information while the form is displayed and then
print the completed form.
- Tax Info For You to view Internal Revenue
Bulletins published in the last few years.
- Tax Regs in English to search regulations and the
Internal Revenue Code (under United States Code
(USC)).
- Digital Dispatch and IRS Local News Net
(both located under Tax Info For Business) to receive
our electronic newsletters on hot tax issues and news.
- Small Business and Self-Employed Community to 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.
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.
Walk-in. You can walk in to many post offices,
libraries, and IRS offices to pick up certain forms, instructions, and
publications. Also, some libraries and IRS offices have:
- An extensive collection of products available to print from
a CD-ROM or photocopy from reproducible proofs.
- The Internal Revenue Code, regulations, Internal Revenue
Bulletins, and Cumulative Bulletins available for research
purposes.
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. You can order IRS Publication 1796, Federal
Tax Products on CD-ROM, and obtain:
- Current tax forms, instructions, and publications.
- Prior-year tax forms, instructions, and publications.
- Popular tax forms which 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/cdorders. The first
release is available in mid-December and the final release is
available in late January.
IRS Publication 3207, The Small Business Resource Guide,
is an interactive CD-ROM that contains information important to
small businesses. It is available in mid-February. You can get one
free copy by calling 1-800-829-3676or
visiting the IRS web site at www.irs.gov/prod/bus_info/sm_bus/
smbus-cd.html.
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