Tax Tips

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Ten Things to Know about the Taxpayer Advocate Service

1. The Taxpayer

Advocate Service (TAS) is an independent organization within the IRS and is your voice at the IRS.

2. We help taxpayers whose problems are causing financial difficulty. This includes businesses as well as individuals.

3. You may be eligible for

problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn’t working as it should.

4. As a taxpayer, you have rights

that the IRS must respect. We’ll help you understand those rights and ensure that they’re protected in any contacts with the IRS.

5. If you qualify for our help,

you’ll be assigned to one advocate who will be with you at every turn. And our service is always free.

6. We have at least one local taxpayer advocate office in every state, the District of Columbia and Puerto Rico. You can call your advocate, whose number is in your local directory, in Publication 1546, Taxpayer Advocate Service — Your Voice at the IRS, and on our website at www.irs.gov/advocate. You can also call us toll-free at 1-877-777-4778.

7. Our tax toolkit at www.TaxpayerAdvocate.irs.gov has basic tax information, details about tax credits (for individuals and businesses), and lots more.

8. TAS also handles large-scale or systemic problems that affect many taxpayers. If you know of one of these broader issues, please report it to us at www.irs.gov/sams.

9. You can get updates at:

10. TAS is here to help you because when you’re dealing with

a tax problem, the worst thing you can do is nothing at all!

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Bartering is the trading of one product or service for another. Often there is no exchange of cash. Small businesses sometimes barter to get products or services they need. For example, a plumber might trade plumbing work with a dentist for dental services.If you barter, you should know that the value of products or services from bartering is taxable income.

Here are four facts about bartering:

1. Barter exchanges. A barter exchange is an organized marketplace where members barter products or services. Some exchanges operate out of an office and others over the Internet. All barter exchanges are required to issue Form 1099-B, Proceeds from Broker and Barter Exchange Transactions. The exchange must give a copy of the form to its members who barter and file a copy with the IRS.

2. Bartering income. Barter and trade dollars are the same as real dollars for tax purposes and must be reported on a tax return. Both parties must report as income the fair market value of the product or service they get.

3. Tax implications. Bartering is taxable in the year it occurs. The tax rules may vary based on the type of bartering that takes place. Barterers may owe income taxes, self-employment taxes, employment taxes or excise taxes on their bartering income.

4. Reporting rules. How you report bartering on a tax return varies. If you are in a trade or business, you normally report it on Form 1040,  Schedule C, Profit or Loss from Business.

For more information, see the Bartering Tax Center in the business section on IRS.gov.