Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax

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refunded or applied to your next return by checking the

Corporation (including an LLC treated as a corporation)

appropriate box. The IRS may apply your overpayment to

— The president, vice president, or other principal officer.

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any past due tax account under your EIN. If line 7 is under

Partnership (including an LLC treated as a partnership)

$1, we will send a refund or apply it to your next return only

or unincorporated organization — A responsible and duly

on written request.

authorized member or officer having knowledge of its affairs.

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Single member limited liability company (LLC) treated

Line 8 — Monthly Summary of Federal Tax Liability.

as a disregarded entity — The owner of the limited liability

This is a summary of your monthly tax liability, not a

company (LLC).

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summary of deposits made. If line 4 is less than

Trust or estate — The fiduciary.

$2,500, do not complete line 8 or Form 945-A.

CAUTION

Form 945 may also be signed by a duly authorized agent

Complete line 8 only if you were a monthly schedule

of the taxpayer if a valid power of attorney has been filed.

depositor for the entire year and line 4 is $2,500 or more.

Alternative signature method. Corporate officers or

See Determining your deposit schedule on page 2.

duly authorized agents may sign Form 945 by rubber stamp,

mechanical device, or computer software program. For

The amount entered on line 8M must equal the

details and required documentation, see Rev. Proc.

amount reported on line 4.

2005-39. You can find Rev. Proc. 2005-39 on page 82 of

CAUTION

Internal Revenue Bulletin 2005-28 at

Report your liabilities on Form 945-A instead of on

irs-irbs/irb05-28.pdf.

line 8 if:

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Privacy Act and Paperwork Reduction Act Notice. We

You were a semiweekly schedule depositor

ask for the information on Form 945 to carry out the Internal

during 2006. Do not complete entries A through M of

Revenue laws of the United States. We need it to figure and

line 8. Instead, complete and file Form 945-A with

collect the right amount of tax. Sections 3402, 3405, and

Form 945.

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3406 of the Internal Revenue Code require taxpayers to pay

You were a monthly schedule depositor for 2006 and

over to the IRS federal income tax withheld from certain

during any month you accumulated nonpayroll taxes of

nonpayroll payments and distributions, including backup

$100,000 or more. Because this converted you to a

withholding. Form 945 is used to determine the amount of

semiweekly schedule depositor for the remainder of 2006

the taxes that you owe. Section 6011 requires you to

(and for 2007), you must report your liabilities on

provide the requested information if the tax applies to you.

Form 945-A for the entire year. Do not complete entries A

Section 6109 requires you to provide your employer

through M of line 8. For more information, see the $100,000

Next-Day Deposit Rule in section 11 of Pub. 15 (Circular E).

identification number (EIN). If you fail to provide this

information in a timely manner, you may be subject to

Third-Party Designee. If you want to allow any individual,

penalties and interest.

corporation, firm, organization, or partnership to discuss

your 2006 Form 945 with the IRS, check the “Yes” box in the

You are not required to provide the information requested

Third-Party Designee section of Form 945. Also, enter the

on a form that is subject to the Paperwork Reduction Act

name, phone number, and any five numbers that the

unless the form displays a valid OMB control number. Books

designee chooses as his or her personal identification

or records relating to a form or its instructions must be

number (PIN). The authorization applies only to the tax form

retained as long as their contents may become material in

upon which it appears.

the administration of any Internal Revenue law.

By checking the “Yes” box, you are authorizing the IRS

Generally, tax returns and return information are

to speak with the designee to answer any questions relating

confidential, as required by section 6103. However, section

to the information reported on your tax return. You are also

6103 allows or requires the Internal Revenue Service to

authorizing the designee to:

disclose or give the information shown on your tax return to

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Exchange information concerning your tax return with the

others described in the Code. For example, we may disclose

IRS and

your tax information to the Department of Justice for civil

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Request and receive written tax return information relating

and criminal litigation, and to cities, states, and the District of

to your tax return including copies of specific notices,

Columbia for use in administering their tax laws. We may

correspondence, and account transcripts.

also disclose this information to other countries under a tax

treaty, to federal and state agencies to enforce federal

You are not authorizing the designee to receive any

nontax criminal laws, or to federal law enforcement and

refund check, bind you to anything (including additional tax

intelligence agencies to combat terrorism.

liability), or otherwise represent you before the IRS. If you

want to expand the designee’s authorization or desire

The time needed to complete and file Form 945 will vary

automatic issuances of copies of notices, see Pub. 947,

depending on individual circumstances. The estimated

Practice Before the IRS and Power of Attorney.

average time is: Recordkeeping, 7 hr., 9 min.; Learning

about the law or the form, 47 min.; and Preparing and

The Third-Party Designee authorization is substantially

sending the form to the IRS, 56 min. If you have

equivalent to Form 8821, Tax Information Authorization, but

comments concerning the accuracy of these time estimates

automatically expires one year from the due date (without

or suggestions for making Form 945 simpler, we would be

regard to extensions) for filing your 2006 Form 945. If you or

happy to hear from you. You can write to the Internal

your designee desire to terminate the authorization, a

Revenue Service, Tax Products Coordinating Committee,

written statement conveying your wish to revoke the

SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,

authorization should be submitted to the IRS service center

IR-6406, Washington, DC 20224. Do not send Form 945 to

where the return was processed (see Where to file (without

this address. Instead, see Where to file on page 1.

a payment) on pages 1-2).

Who must sign. Form 945 must be signed as follows:

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Sole proprietorship — The individual who owns the

business.

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Instructions For Form 945 - Annual Return Of Withheld Federal Income Tax - 2006 Page 4

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