Instructions For Form 8697 (Rev. 2013) (Page 2 of 7) in pdf

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.

required to file your income tax return

For partnerships (that are not closely

1. In the completion year if, for each

(including extensions). Keep a copy of

held), write “From Form 8697” and

prior contract year, the cumulative

Form 8697 and any attached schedules

include any interest due in the bottom

taxable income (or loss) actually

for your records.

margin of the tax return. Attach a check

reported under the contract is within

or money order for the full amount made

Filing a Corrected Form

10% of the cumulative look-back

payable to “United States Treasury.”

income (or loss). Cumulative look-back

8697

Write the partnership's employer

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

changes as a result of an error you

For S corporations that are not

estimated contract price and costs.

made, an income tax examination, or

closely held, include any interest due in

2. In a post-completion year if, as of

the filing of an amended tax return.

the amount to be entered for additional

the close of the post-completion year,

taxes (for example, 2012 Form 1120S,

When completing Part I, line 1, of the

the cumulative taxable income (or loss)

line 22c). Write on the dotted line to the

corrected Form 8697, follow the

under the contract is within 10% of the

left of the entry space “From Form 8697”

instructions on the form but do not enter

cumulative look-back income (or loss)

and the amount of interest due. A

the adjusted taxable income from Part I,

under the contract as of the close of the

closely held S corporation would also

line 3, of the original Form 8697. When

most recent year in which the look-back

follow these procedures following a

completing Part I, line 5 (or Part II,

method was applied to the contract (or

conversion from a C corporation for the

line 6), of the corrected Form 8697, do

would have been applied if the election

contracts entered into prior to the

not include the interest due, if any, from

had not been made).

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

with your tax return.

To make the election, attach a

For closely held pass-through

If both the original and corrected

statement to your timely filed income tax

entities, look-back interest is applied at

Forms 8697 show an amount on the line

return (determined with extensions) for

the owner level and not the entity level.

for interest you owe, file an amended

the first tax year of the election. Write at

For corporations, include the amount

income tax return.

the top of the statement

of interest due on the appropriate line of

If both the original and corrected

“NOTIFICATION OF ELECTION

Form 1120, Schedule J, Part I (for

Forms 8697 show an amount on the line

UNDER SECTION 460(b)(6).” Include

example, 2012 Form 1120, Schedule J,

for interest to be refunded to you, write

on the statement your name, identifying

line 9c).

“Amended” in the top margin of the

number, and the effective date of the

corrected Form 8697, and file it

election. Also identify the trades or

Look-back interest owed is not

separately.

businesses that involve long-term

subject to the estimated tax penalty.

contracts. Once made, the election

If your original Form 8697 shows an

See Regulations section 1.460-6(f)(2).

applies to all contracts completed

amount on the line for interest you owe

If Interest Is To Be Refunded to

during the election year and all later tax

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

refunded to you, you must:

Do not attach Form 8697 to your income

1.460-6(j) for more details. If you timely

1. File an amended income tax

tax return. Instead, file Form 8697

filed your return without making the

return showing $0 interest from Form

separately with the IRS at the applicable

election, you may make the election on

8697 and

address listed below.

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

If the original Form 8697 shows an

All others:

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

8697 shows an amount on the line for

Internal Revenue Service

You)

interest you owe, you must:

Cincinnati, OH 45999-0001

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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Instructions For Form 8697 (Rev. 2013) Page 2

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