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Irs 886-a Form: What You Should Know
As we have noted in this issue, Form 886A has two main use cases. Its application to people claiming Taxpayer Identification Number (TIN) Exempt status is a fairly obvious one. Form 886A is also commonly used to explain non-monetary items that you are required to file, and you never received a Form 860 because your non-monetary item never met the requirements for a Form 856. You can also use Form 886A to explain the “expectation of a refund” since it shows that the return has to include all deductions you claimed, and all tax credits and deductions that you claimed, including the Earned Income Tax Credit (ETC), the American Opportunity Free Credit (AFDC), the student loan interest deductions, and any tax benefits derived from your spouse's or dependent's health coverage. The second use of Form 886A is that if a return will be filed in a foreign country, an Explanation of Items need to be attached to provide you with further instructions. We have included many examples of our cases where a refund was mailed to us on the correct Form 886A, with an explanation of what happened with the refund. We expect Form 886A forms are used more often than other documents in the IRS system. Let's look at a few additional examples. Example 1 — Form 8063 — Application for Employment Tax Credit This example is from a large state company that made and mailed out over 400,000 paper forms, and we will use the case documents to illustrate what IRS calls an “explanation of items.” The first line is the employer's name. You are not employed in the United States. The second line is the year of establishment. We assume this employer is based out of Ireland. The third line is the city of establishment. It is probably not surprising because this is how the paper forms are sent out in Ireland. The fourth line is the place of employment of the company's representative. This could be the president of the company, but often involves other employees as well. The fifth line is the name of the taxpayer. This taxpayer is the taxpayer who filed Form 8063. The last two lines (sixth and seventh) are the employee identification number for the taxpayer. The sixth line is the employee's social security number. The last two lines are the total earnings of all persons employed by the firm. The second line is the taxpayer's gross wages.
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