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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
See section 460(b)(3)(B) for details. For individuals, include any interest return. If you file a joint return, the
due in the amount to be entered for total signature of both spouses is required on
De Minimis Exception tax (after credits and other taxes) on Form 8697. If additional Forms 8697 are
You may elect not to apply the your return (for example, 2012 Form needed to show more than 2
look-back method in certain de minimis 1040, line 61). Write on the dotted line redetermination years, sign only the first
cases for completed contracts. The to the left of the entry space “From Form Form 8697.
look-back method does not apply in the 8697” and the amount of interest due. File Form 8697 by the date you are
following cases if the election is made.
For partnerships (that are not closely required to file your income tax return
1. In the completion year if, for each held), write “From Form 8697” and (including extensions). Keep a copy of
prior contract year, the cumulative include any interest due in the bottom Form 8697 and any attached schedules
taxable income (or loss) actually margin of the tax return. Attach a check for your records.
reported under the contract is within or money order for the full amount made
10% of the cumulative look-back payable to “United States Treasury.” Filing a Corrected Form
income (or loss). Cumulative look-back Write the partnership's employer 8697
income (or loss) is the amount of identification number (EIN), daytime You must file a corrected Form 8697
taxable income (or loss) that you would phone number, and “Form 8697 only if the amount shown on Part I,
have reported if you had used actual Interest” on the check or money order. line 6, or Part II, line 7, for any prior year
contract price and costs instead of
estimated contract price and costs. For S corporations that are not changes as a result of an error you
2. In a post-completion year if, as of closely held, include any interest due in made, an income tax examination, or
the close of the post-completion year, the amount to be entered for additional the filing of an amended tax return.
the cumulative taxable income (or loss) taxes (for example, 2012 Form 1120S, When completing Part I, line 1, of the
under the contract is within 10% of the line 22c). Write on the dotted line to the corrected Form 8697, follow the
cumulative look-back income (or loss) left of the entry space “From Form 8697” instructions on the form but do not enter
under the contract as of the close of the and the amount of interest due. A the adjusted taxable income from Part I,
most recent year in which the look-back closely held S corporation would also line 3, of the original Form 8697. When
method was applied to the contract (or follow these procedures following a completing Part I, line 5 (or Part II,
would have been applied if the election conversion from a C corporation for the line 6), of the corrected Form 8697, do
had not been made). contracts entered into prior to the not include the interest due, if any, from
conversion. See the rules related to Part I, line 10 (or Part II, line 11), of the
For purposes of item 2, discounting Mid-Contract Change in Taxpayer, original Form 8697 that was included in
under section 460(b)(2) does not apply. earlier. your total tax when Form 8697 was filed
To make the election, attach a For closely held pass-through with your tax return.
statement to your timely filed income tax entities, look-back interest is applied at If both the original and corrected
return (determined with extensions) for the owner level and not the entity level. Forms 8697 show an amount on the line
the first tax year of the election. Write at for interest you owe, file an amended
the top of the statement For corporations, include the amount income tax return.
“NOTIFICATION OF ELECTION of interest due on the appropriate line of If both the original and corrected
UNDER SECTION 460(b)(6).” Include Form 1120, Schedule J, Part I (for Forms 8697 show an amount on the line
on the statement your name, identifying example, 2012 Form 1120, Schedule J, for interest to be refunded to you, write
number, and the effective date of the line 9c). “Amended” in the top margin of the
election. Also identify the trades or Look-back interest owed is not corrected Form 8697, and file it
businesses that involve long-term subject to the estimated tax penalty. separately.
contracts. Once made, the election See Regulations section 1.460-6(f)(2). If your original Form 8697 shows an
applies to all contracts completed amount on the line for interest you owe
during the election year and all later tax If Interest Is To Be Refunded to and the corrected Form 8697 shows an
years, and may not be revoked without You amount on the line for interest to be
IRS consent. See Regulations section Do not attach Form 8697 to your income refunded to you, you must:
1.460-6(j) for more details. If you timely tax return. Instead, file Form 8697 1. File an amended income tax
filed your return without making the separately with the IRS at the applicable return showing $0 interest from Form
election, you may make the election on address listed below. 8697 and
an amended return filed no later than 6 Individuals: 2. File the corrected Form 8697
months after the due date of your tax
separately (but do not write “Amended”
return (excluding extensions). Write Department of Treasury at the top of the form because this is the
“Filed pursuant to section 301.9100” at Internal Revenue Service first Form 8697 that you will file
the top of the amended return. Philadelphia, PA 19255-0001 separately).
Filing Instructions All others: If the original Form 8697 shows an
amount on the line for interest to be
If You Owe Interest (or No refunded to you and the corrected Form
Department of Treasury
Interest Is To Be Refunded to Internal Revenue Service 8697 shows an amount on the line for
You) Cincinnati, OH 45999-0001 interest you owe, you must:
Attach Form 8697 to your income tax 1. File the corrected Form 8697
return. The signature section of Form Complete the signature section of separately (with “Amended” written at
8697 does not have to be completed by Form 8697 following the instructions for the top) showing $0 interest to be
you or the paid preparer. the signature section of your income tax refunded and
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