1. How does the Foreign Tax Credit work for U.S. citizens living in Iceland?
The Foreign Tax Credit (FTC) is a tax benefit provided by the U.S. government to taxpayers, including U.S. citizens living abroad in countries like Iceland, to avoid double taxation on income earned in foreign countries. Here’s how the FTC works for U.S. citizens living in Iceland:
1. Income Inclusion: U.S. citizens are required to report their worldwide income to the IRS, which includes income earned in Iceland. This income is subject to U.S. taxation.
2. Foreign Tax Paid: If U.S. citizens in Iceland pay taxes to the Icelandic government on their income, they can utilize the FTC to offset their U.S. tax liability. This is to avoid being taxed twice on the same income.
3. Calculating the Credit: The FTC is calculated by determining the foreign taxes paid on income earned in Iceland and using that amount to reduce the U.S. tax owed on the same income. Taxpayers can claim a credit for the lower of the foreign tax paid or the U.S. tax attributable to the foreign income.
4. Form 1116: To claim the FTC, U.S. citizens living in Iceland must file Form 1116 with their U.S. tax return. This form calculates the allowable credit based on foreign income and taxes paid.
5. Carryover Provisions: If the foreign tax paid exceeds the U.S. tax owed, the excess can be carried back one year or forward up to ten years to offset U.S. tax liabilities in those years.
Overall, the Foreign Tax Credit is a valuable tool for U.S. citizens in Iceland to mitigate the impact of double taxation and ensure they are not taxed on the same income by both the U.S. and Icelandic governments.
2. What types of foreign taxes can be claimed for the Foreign Tax Credit in Iceland?
1. In Iceland, U.S. taxpayers can typically claim the Foreign Tax Credit for various types of taxes paid to the Icelandic government on income earned in Iceland. This includes taxes on income, profits, and capital gains, as well as taxes on dividends, interest, and royalties.
2. The Foreign Tax Credit can also be claimed for taxes paid on Icelandic social security contributions, property taxes, and any withholding taxes imposed by Iceland on U.S. taxpayers.
3. It’s important to note that only foreign taxes that are considered income taxes are eligible for the Foreign Tax Credit, so certain types of taxes, such as value-added taxes (VAT) or wealth taxes, may not qualify for the credit.
4. To claim the Foreign Tax Credit for taxes paid in Iceland, taxpayers must file Form 1116 with their U.S. tax return, providing details of the foreign taxes paid and demonstrating how they qualify for the credit based on the U.S. tax laws and tax treaties in place between the U.S. and Iceland.
3. Are there any specific rules or limitations for claiming the Foreign Tax Credit in Iceland?
Yes, there are specific rules and limitations for claiming the Foreign Tax Credit in Iceland as a U.S. citizen. Here are some key points to keep in mind:
1. Tax Treaty: The United States has a tax treaty with Iceland which helps to determine the eligibility and limitations of the Foreign Tax Credit. It is important to refer to the specific provisions of the treaty to understand how foreign taxes paid in Iceland can be credited against U.S. taxes.
2. Qualifying Taxes: Only certain types of taxes paid to Iceland are eligible for the Foreign Tax Credit. These typically include income taxes, but may not include taxes on items such as social security contributions or property taxes.
3. Limitations: There are limitations on the amount of foreign taxes that can be claimed as a credit on your U.S. tax return. The limitation is generally calculated based on the proportion of your foreign income to your total income.
4. Documentation: Proper documentation of the foreign taxes paid to Iceland is essential when claiming the Foreign Tax Credit. You will need to provide evidence of the taxes paid, such as receipts or official tax documents.
5. Currency Conversion: Foreign taxes paid in Icelandic krona must be converted to U.S. dollars using the exchange rate on the date the tax was paid. This exchange rate should be accurately documented for tax purposes.
Overall, claiming the Foreign Tax Credit for taxes paid to Iceland involves understanding the specific rules and limitations set forth in the tax treaty between the two countries, ensuring eligible taxes are properly documented, and adhering to the calculation methods specified by the IRS. It is recommended to consult with a tax professional or advisor familiar with international tax laws to ensure compliance and maximize the benefits of the Foreign Tax Credit.
4. How is the Foreign Tax Credit calculated for income earned in Iceland?
The Foreign Tax Credit (FTC) for income earned in Iceland is calculated using Form 1116 (Foreign Tax Credit). To calculate the credit, the following steps would generally be taken:
1. Determine the total amount of foreign taxes paid to Iceland on the income earned. This can usually be found on your foreign tax statements or documentation provided by the Icelandic tax authorities.
2. Calculate the foreign tax credit limitation, which is the lesser of the foreign taxes paid or the U.S. tax liability on the same income. This ensures that you are not receiving a credit greater than the U.S. tax that would be owed on that income.
3. Fill out Form 1116 and include the relevant information about the foreign income earned in Iceland, the foreign taxes paid, and the foreign tax credit limitation.
4. The calculated foreign tax credit can then be used to reduce your U.S. income tax liability on the income earned in Iceland.
It is important to note that specific rules and limitations may apply when claiming the Foreign Tax Credit, so it is recommended to consult with a tax professional or refer to the IRS guidelines for detailed instructions on how to accurately calculate and claim the credit for income earned in Iceland.
5. Can I claim the Foreign Tax Credit for Icelandic social security taxes paid?
Yes, as a U.S. citizen, you generally can claim the Foreign Tax Credit (FTC) for Icelandic social security taxes paid. Here’s a breakdown of how this process typically works:
1. Eligibility: The FTC is designed to mitigate the potential issue of double taxation when income is earned in a foreign country and is subjected to taxation by both the foreign country and the United States. Social security taxes paid in Iceland would typically qualify for the FTC as they are considered an income tax in the U.S. tax system.
2. Form 1116: To claim the Foreign Tax Credit, you would need to file Form 1116 along with your U.S. federal income tax return. This form allows you to calculate the amount of credit you can claim based on the foreign taxes paid and the income earned in Iceland.
3. Limitations: There are certain limitations to the FTC, such as the foreign tax credit being limited to the amount of U.S. tax attributable to your foreign-sourced income. Additionally, there are specific rules and calculations that determine the FTC amount you can claim.
4. Documentation: It’s important to keep detailed records of the foreign taxes paid in Iceland to support your claim for the Foreign Tax Credit. Make sure to retain documentation such as pay stubs, W-2 forms, and any tax documents from Iceland’s tax authorities.
5. Consultation: Given the complexities of international tax matters, it’s recommended to consult with a tax professional or advisor who has expertise in foreign tax issues. They can help ensure that you properly navigate the Foreign Tax Credit rules and maximize your tax benefits while staying compliant with U.S. tax laws.
6. Are there any differences in claiming the Foreign Tax Credit for income from Icelandic sources versus other foreign sources?
When claiming the Foreign Tax Credit (FTC) for income from Icelandic sources compared to other foreign sources, there may be some differences to consider. Here are a few key points to keep in mind:
1. Treaty Benefits: The United States may have a tax treaty with Iceland that could impact the availability and calculation of the FTC for Icelandic income. It is important to review the specific provisions of the tax treaty to understand any differences or special rules that may apply to Icelandic income.
2. Foreign Tax Rates: The foreign tax rates in Iceland may differ from those in other countries where you earn income. The amount of foreign tax paid can impact the FTC calculation, so it is essential to consider the tax rates in Iceland when determining the credit amount.
3. Currency Conversion: If you are earning income in Iceland, you will need to convert the foreign taxes paid from Icelandic Krona to U.S. dollars for FTC purposes. The exchange rate used for this conversion can affect the FTC amount, so it is crucial to use the correct exchange rate as per IRS guidelines.
4. Income Sourcing Rules: The rules for determining the source of income may vary between Icelandic income and income from other foreign sources. Understanding these rules is crucial for correctly calculating the FTC for Icelandic income.
In conclusion, while the general principles of claiming the Foreign Tax Credit apply to income from Icelandic sources, there may be specific differences to consider due to factors such as tax treaties, foreign tax rates, currency conversion, and income sourcing rules. It is recommended to consult with a tax professional or refer to IRS guidelines when claiming the FTC for income from Iceland or any other foreign source.
7. Are there any forms or paperwork required to claim the Foreign Tax Credit for Icelandic taxes?
Yes, there are specific forms and paperwork required to claim the Foreign Tax Credit (FTC) for Icelandic taxes as a U.S. citizen. To claim the FTC for Icelandic taxes, you would need to file Form 1116 (Foreign Tax Credit) along with your individual tax return (Form 1040) with the IRS. Form 1116 is used to calculate the amount of foreign tax paid and to determine the credit that can be claimed on your U.S. tax return. In addition to Form 1116, you may also need to provide supporting documentation such as proof of payment of Icelandic taxes, any relevant tax forms from Iceland, and other documentation requested by the IRS to support your claim for the FTC.
It is important to ensure that all information provided is accurate and complete to avoid any discrepancies or issues with claiming the foreign tax credit for Icelandic taxes. Additionally, seeking guidance from a tax professional or accountant who is familiar with international tax matters can be beneficial in navigating the process of claiming the FTC for Icelandic taxes and ensuring compliance with U.S. tax laws.
8. Can I carry forward any excess Foreign Tax Credits from Iceland to future tax years?
Yes, as a U.S. citizen, you can carry forward any excess Foreign Tax Credits (FTCs) from Iceland to future tax years. The U.S. allows taxpayers to carry forward excess FTCs for up to 10 years, which means that if the FTCs generated from Iceland exceed your U.S. tax liability in a particular year, you can use the excess credits to offset U.S. tax in future years. This carryforward provision allows taxpayers to fully utilize foreign taxes paid in high-tax jurisdictions like Iceland over a longer period and avoid losing the benefit of those taxes. It is important to keep accurate records of your FTCs and follow the IRS guidelines to properly claim and carry forward these credits on your U.S. tax return.
9. Are there any special considerations for claiming the Foreign Tax Credit if I also pay U.S. taxes on my Icelandic income?
When claiming the Foreign Tax Credit (FTC) as a U.S. citizen who pays U.S. taxes on income earned in Iceland, there are several special considerations to keep in mind:
1. Income Sourcing: It is important to properly allocate your income between the U.S. and Iceland to determine the foreign taxes eligible for the FTC. The FTC generally applies to foreign taxes paid on income that is also subject to U.S. tax.
2. Treaty Eligibility: The U.S. may have a tax treaty with Iceland, which could affect how foreign taxes are credited against U.S. tax liability. Tax treaties often contain specific provisions related to the FTC, so it is important to review any treaty provisions that may apply.
3. Tax Calculation: When calculating your FTC, you will need to determine the amount of foreign tax paid on the income earned in Iceland. This amount will generally be used to offset or reduce your U.S. tax liability on that same income.
4. Documentation: It is crucial to maintain detailed records of the foreign taxes paid in Iceland to support your FTC claim. This includes keeping copies of tax returns, payment receipts, and any other relevant documentation.
5. Limitations: The FTC is subject to certain limitations, such as the foreign tax credit limitation, which may restrict the amount of foreign taxes that can be credited against U.S. tax liability.
In conclusion, when claiming the Foreign Tax Credit while also paying U.S. taxes on income earned in Iceland, it is essential to carefully consider these special considerations and ensure compliance with the relevant tax laws and regulations to maximize the benefit of the credit.
10. How do I report Foreign Tax Credit on my U.S. tax return when living in Iceland?
When reporting Foreign Tax Credit (FTC) on your U.S. tax return while living in Iceland, you can generally use Form 1116 to claim the credit for the foreign taxes paid. Here’s how you can report the FTC:
1. Determine the total amount of foreign taxes paid to Iceland during the tax year.
2. Calculate the FTC limit based on your U.S. tax liability on the foreign income.
3. Complete Form 1116, Foreign Tax Credit, to calculate the allowable credit.
4. Attach Form 1116 to your U.S. tax return (Form 1040) and report the amount of foreign tax credit claimed on the appropriate line.
It’s essential to keep documentation of the foreign taxes paid to support your FTC claim in case the IRS requests verification. Additionally, ensure that you meet all eligibility requirements and follow the IRS guidelines for claiming the Foreign Tax Credit to avoid any issues with your tax return.
11. Are there any tax treaties between the U.S. and Iceland that affect the Foreign Tax Credit?
Yes, there is a tax treaty between the United States and Iceland that affects the Foreign Tax Credit (FTC). The tax treaty between the two countries is aimed at preventing double taxation and fiscal evasion with respect to taxes on income. The provisions within this treaty outline the specific rules for claiming the Foreign Tax Credit for taxes paid to Iceland by U.S. citizens or residents. Here are a few key points regarding the impact of the U.S.-Iceland tax treaty on the Foreign Tax Credit:
1. The treaty provides guidelines on how the foreign tax credit is calculated and claimed for taxes paid to Iceland on income sourced from Iceland.
2. It may specify certain types of income that are eligible for the FTC and outline any limitations or restrictions on claiming the credit.
3. The treaty may also define the procedures for determining the creditable amount of tax paid to Iceland and address any potential issues related to claiming the credit on specific types of income.
4. Additionally, the treaty could outline mechanisms for resolving any disputes or ambiguities related to the application of the Foreign Tax Credit in the context of U.S.-Iceland tax relations.
Overall, the U.S.-Iceland tax treaty plays a significant role in shaping the rules and procedures for claiming the Foreign Tax Credit for taxes paid to Iceland by U.S. taxpayers, providing a framework for avoiding double taxation and ensuring fair tax treatment between the two countries.
12. Can I claim the Foreign Tax Credit for taxes paid to the Icelandic government on investment income?
Yes, as a U.S. citizen, you can generally claim the Foreign Tax Credit (FTC) for taxes paid to the Icelandic government on investment income. To qualify for the Foreign Tax Credit, the tax must be a legal and actual foreign tax liability that you paid or accrued, and you must have foreign source income to which the tax is related. Here are some key points to consider:
1. Eligibility: The FTC is available to U.S. taxpayers who have foreign source income and have paid foreign taxes on that income.
2. Form 1116: To claim the Foreign Tax Credit, you will need to file Form 1116 with your U.S. tax return. This form calculates the amount of the credit you are eligible for based on the foreign taxes paid.
3. Limitations: The Foreign Tax Credit is subject to limitations that may cap the amount of credit you can claim. These limitations are based on the amount of your foreign income and your total U.S. tax liability.
4. Carryover: If the foreign taxes paid exceed the limits in the current year, you may be able to carry over the excess credits to future years.
5. Documentation: It’s important to retain documentation of the foreign taxes paid to support your claim for the Foreign Tax Credit in case of an IRS audit.
In summary, you are generally able to claim the Foreign Tax Credit for taxes paid to the Icelandic government on investment income, as long as you meet the eligibility requirements and properly report the income and taxes paid on your U.S. tax return.
13. How does the Foreign Tax Credit interact with the Foreign Earned Income Exclusion for U.S. citizens living in Iceland?
For U.S. citizens living in Iceland, the Foreign Tax Credit (FTC) and the Foreign Earned Income Exclusion (FEIE) can be utilized to reduce the impact of double taxation on their foreign-earned income. Here’s how they interact:
1. Foreign Tax Credit: The FTC allows U.S. citizens living in Iceland to offset taxes paid to the Icelandic government against their U.S. tax liability. This credit is designed to avoid double taxation on the same income by providing a dollar-for-dollar reduction in the U.S. tax owed.
2. Foreign Earned Income Exclusion: The FEIE allows qualifying U.S. expats in Iceland to exclude a certain amount of their foreign-earned income from U.S. taxation. For tax year 2021, the maximum exclusion is $108,700 per taxpayer. This exclusion can be used in conjunction with the FTC to further reduce the overall tax burden on foreign income.
3. Interaction: U.S. citizens living in Iceland can choose to use either the FTC or the FEIE, or a combination of both, to minimize their U.S. tax liability on income earned in Iceland. It’s important to note that the FEIE applies only to earned income, while the FTC can be used for both earned and unearned income subject to foreign taxes.
4. Optimal Strategy: The optimal tax strategy will depend on various factors such as the amount of foreign tax paid, the nature of income, and individual circumstances. Taxpayers should carefully evaluate their options and seek professional advice to determine the most advantageous approach for minimizing their tax obligations while complying with U.S. tax laws.
14. Are there any special rules for claiming the Foreign Tax Credit for Icelandic capital gains taxes?
Yes, there are special rules for claiming the Foreign Tax Credit for Icelandic capital gains taxes. Here are some key points to consider:
1. Tax Treaty: The United States has a tax treaty with Iceland which may impact the eligibility and calculation of the Foreign Tax Credit for Icelandic capital gains taxes. It’s important to review the provisions of the tax treaty to determine any specific rules related to capital gains taxes.
2. Income Sourcing: Capital gains derived from Icelandic sources may be subject to taxation in Iceland. The Foreign Tax Credit can generally be claimed for foreign taxes paid on income that is considered foreign source income for U.S. tax purposes.
3. FTC Limitation: The Foreign Tax Credit is subject to certain limitations, including the limitation based on the amount of foreign income taxes paid or accrued. Taxpayers need to ensure that the FTC claimed does not exceed the limit based on the total foreign taxes paid.
4. FTC Calculation: The calculation of the Foreign Tax Credit for Icelandic capital gains taxes will depend on various factors, including the amount of foreign tax paid, the type of income, and the taxpayer’s overall tax situation.
Overall, when claiming the Foreign Tax Credit for Icelandic capital gains taxes, it is essential to understand the specific rules and considerations that apply to this type of income to properly report and claim the credit on your U.S. tax return. Consulting with a tax advisor or expert familiar with international tax matters can also be beneficial in ensuring compliance with both U.S. and Icelandic tax laws.
15. Can I claim the Foreign Tax Credit for Icelandic taxes paid on rental income?
Yes, as a U.S. citizen, you can potentially claim the Foreign Tax Credit (FTC) for Icelandic taxes paid on rental income. To claim the FTC for taxes paid to Iceland, the taxes must be considered an income tax or a tax in lieu of an income tax. If the Icelandic taxes you paid on rental income qualify as an income tax, you can typically claim a credit on your U.S. tax return for the foreign taxes paid, reducing your U.S. tax liability. To claim the credit, you would generally need to file IRS Form 1116 and meet certain requirements such as the income being taxable in both the U.S. and Iceland, and the tax paid must not be refunded. It is important to consult with a tax professional or advisor with expertise in international tax matters to ensure compliance with all applicable rules and regulations when claiming the Foreign Tax Credit for Icelandic taxes.
16. Are there any situations where I may not be eligible to claim the Foreign Tax Credit for Icelandic taxes?
There are several situations where you may not be eligible to claim the Foreign Tax Credit for Icelandic taxes as a U.S. citizen:
1. Income Not Subject to U.S. Tax: If the income earned in Iceland is not subject to U.S. tax, you may not be eligible to claim the Foreign Tax Credit. The FTC is designed to alleviate the burden of double taxation on income that is also taxed by both the U.S. and the foreign country.
2. Passive Income Limitations: The Foreign Tax Credit is generally limited to the amount of U.S. tax that would be imposed on the same income. If your foreign taxes paid exceed this limit, you may not be able to claim the full credit for Icelandic taxes.
3. Income Sourced in Other Countries: If the income earned in Iceland is also considered to be sourced in another country, you may face limitations or restrictions on claiming the Foreign Tax Credit for Icelandic taxes.
4. Foreign Tax Haven Restrictions: If Iceland is considered a foreign tax haven by the IRS, special rules and limitations may apply to your ability to claim the Foreign Tax Credit for Icelandic taxes.
It is important to consult with a tax professional or accountant familiar with international tax laws to determine your specific eligibility to claim the Foreign Tax Credit for Icelandic taxes in your individual circumstances.
17. How does the Foreign Tax Credit affect my overall U.S. tax liability as a U.S. citizen living in Iceland?
As a U.S. citizen living in Iceland, the Foreign Tax Credit (FTC) can have a significant impact on your overall U.S. tax liability. The FTC is designed to reduce the double taxation that can occur when both the U.S. and a foreign country assert the right to tax the same income. Here’s how the FTC affects your U.S. tax liability in Iceland:
1. Credit for Foreign Taxes Paid: The FTC allows you to offset the U.S. tax you owe by the amount of income tax you paid to Iceland on the same income. This means that if you’ve already paid taxes on your income in Iceland, you can claim a credit for those taxes against your U.S. tax liability.
2. Limitations on the Foreign Tax Credit: There are limitations on the amount of the FTC you can claim, based on the amount of your foreign income and the U.S. tax rate. If your foreign income is greater than the foreign tax credit limitation, you may not be able to fully offset your U.S. tax liability with the credit.
3. Carryover and Carryback: If you cannot use the full amount of the FTC in a given tax year, you may be able to carry over the excess to future years or elect to carry it back to the previous tax year. This allows you to maximize the benefit of the credit over time.
In conclusion, as a U.S. citizen living in Iceland, the Foreign Tax Credit can help reduce your overall U.S. tax liability by allowing you to offset taxes paid to Iceland against your U.S. tax bill. It’s important to understand the rules and limitations of the credit to ensure you are taking full advantage of this tax benefit.
18. Can I claim the Foreign Tax Credit for Icelandic taxes paid on income from a foreign partnership or corporation?
Yes, as a U.S. citizen, you can potentially claim the Foreign Tax Credit (FTC) for Icelandic taxes paid on income from a foreign partnership or corporation. To claim the FTC for foreign taxes paid to Iceland, the following conditions must be met:
1. The taxes paid to Iceland must be income taxes or taxes in lieu of income taxes.
2. The income giving rise to the foreign tax must be included in your U.S. tax return.
3. To claim the foreign tax credit, you would need to file IRS Form 1116, which is used to calculate the amount of credit you can claim for foreign taxes paid.
4. The credit is generally limited to the lesser of the foreign taxes paid or the U.S. tax on the same income. Any excess foreign taxes paid can sometimes be carried forward or back to other tax years.
It is advisable to consult with a tax professional or accountant familiar with international tax laws to ensure compliance and maximize any potential tax benefits when claiming the Foreign Tax Credit for Icelandic taxes paid on income from a foreign partnership or corporation.
19. Are there any differences in claiming the Foreign Tax Credit for Icelandic inheritance or gift taxes?
When it comes to claiming the Foreign Tax Credit (FTC) for Icelandic inheritance or gift taxes, there are some important differences to consider compared to other types of foreign taxes. Here are some key points to note:
1. Eligibility: In general, the Foreign Tax Credit allows U.S. citizens and residents to offset U.S. tax on income earned in foreign countries by claiming a credit for foreign taxes paid on that income. However, when it comes to inheritance or gift taxes in Iceland, the rules can vary as these are not taxes typically associated with income.
2. Credit Limitation: Unlike income taxes, which are usually eligible for the Foreign Tax Credit without limitation, certain types of foreign taxes, such as inheritance or gift taxes, may face limitations in terms of the amount that can be claimed for credit against U.S. tax liability.
3. Timing and Reporting: It is important to consider the timing of the payment of Icelandic inheritance or gift taxes in relation to the U.S. tax year for which the Foreign Tax Credit is being claimed. Proper reporting and documentation of the foreign taxes paid are crucial for claiming the credit accurately.
4. Consultation: Given the complexities involved in claiming the Foreign Tax Credit for non-income related taxes such as inheritance or gift taxes, seeking advice from a tax professional or advisor with expertise in international tax matters, and specifically Icelandic tax laws, can be highly beneficial to ensure compliance and optimize tax benefits.
In conclusion, while the general principles of the Foreign Tax Credit apply, claiming the credit for Icelandic inheritance or gift taxes may involve unique considerations and limitations that warrant careful attention and expert guidance.
20. Are there any common errors or misconceptions to avoid when claiming the Foreign Tax Credit for Icelandic taxes?
When claiming the Foreign Tax Credit for Icelandic taxes, there are several common errors and misconceptions to avoid:
1. Not Understanding Eligible Taxes: One common mistake is not realizing which taxes qualify for the Foreign Tax Credit. In the case of Iceland, only taxes that are considered income, war profits, or excess profits taxes are eligible for the credit. Other types of taxes, such as value-added tax (VAT) or property taxes, do not qualify.
2. Failure to Separate Passive and General Category Income: Taxpayers often fail to separate their passive income (such as interest, dividends, and royalties) from their general category income when calculating the Foreign Tax Credit. This separation is crucial as there are different limitations and rules that apply to each category.
3. Incorrect Calculation of FTC Limitation: Another common error is miscalculating the limitation on the Foreign Tax Credit. Taxpayers must determine the limit separately for passive and general category income, taking into account factors like the foreign tax paid, the U.S. tax liability, and the total foreign income.
4. Not Considering Carryover Provisions: Taxpayers may overlook the option to carry forward any unused foreign tax credits to future years. This can be beneficial in cases where the credit exceeds the current year’s tax liability or when there are limitations on the amount that can be claimed in a single year.
Avoiding these common errors and misconceptions can help taxpayers correctly claim the Foreign Tax Credit for Icelandic taxes and avoid potential issues with the IRS.