CCA 200910055: Form instructions control whether taxpayers may round dollar amounts

Plain-English summary

Treasury regulations allow amounts to be reported at the nearest whole dollar when the applicable form or instructions permit rounding. Amounts from one cent through 49 cents round down, while 50 cents through 99 cents round up. The advice also states that a taxpayer may elect at filing to report exact dollar amounts and that the election is irrevocable. Rounding an amount to zero does not necessarily remove an independent obligation to file the form. For the specific redacted interest amount, however, rounding to zero left nothing to report on Schedule B and no need to file that schedule solely because of that item.

Ruling snapshot

• Question: How do the rounding rules affect a small amount of interest income and the need to file Schedule B?
• Outcome: Advice given: follow the form instructions, and if the amount permissibly rounds to zero, that item alone need not appear on Schedule B.
• Key authorities: IRC §§ 6012(b) and 6102; Treas. Reg. §§ 301.6102-1(a) and 301.3102-1(b)(2), as cited in the advice.

Full text (IRS public release)

ID: CCA_2009011409470453 Number: 200910055
Release Date: 3/6/2009
Office: ----------------------------
UILC: 6102.00-00

From: --------------------
Sent: Wednesday, January 14, 2009 9:47:05 AM
To: --------------------
Cc:
Subject: Rounding Rules

Hello ----------

Per our conversation here is some basic information for your benefit when you talk to the taxpayer.

Treasury Reg. § 301.6102-1(a) provides that “to the extent permitted by any internal revenue form or instructions prescribed for use with respect to any internal revenue return, declaration, statement, other document, or supporting schedules, any amount required to be reported on such form shall be entered at the nearest whole dollar amount.” The instructions to any form shall indicate the extent to which whole dollars shall be entered. See § 301.6102-1(a). Thus, the form instructions should indicate if rounding is appropriate.

Rounding to the nearest dollar amount shall be done in accordance with the following examples:

Exact Amount
Reported Amount
$18.01 through $18.49
$18
$18.50
$19
$18.51 through $18.99
$19

See § 301.6102-1(a).

Alternatively, I.R.C. § 6012(b) allows a taxpayer to elect to report dollar amounts without regard to the rounding rules in § 301.6102-1(a), instead reporting the exact dollar amounts. The taxpayer must make this election “at the time of filing the return, declaration, statement, or other document.” Treas. Reg. § 301.3102-1(b)(2). The election is irrevocable. Id.

Generally speaking, if a taxpayer has an amount that is $0.49 or less and rounds down to zero, the zero figure may not negate the taxpayer’s reporting requirement. Depending upon the form, declaration, etc. there may be a requirement to file the form even if that amount on the form is zero.
2

If the taxpayer in this case is only concerned about $------of interest income, rounding down to zero would give the taxpayer no interest income. Thus, there would be nothing to report on the Schedule B regarding that particular interest income and no need to file a Schedule B based upon that particular income item.

If you have any questions or need clarification please feel free to contact me at ------------.

Have a good day,
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