8697 Interest Computation Under the Look-Back Method for Comp

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TREASURY/IRS AND OMB USE ONLY DRAFT

8697

Form
(Rev. December 2025)
Department of the Treasury
Internal Revenue Service

Interest Computation Under the Look-Back
Method for Completed Long-Term Contracts

OMB No. 1545-1031

Go to www.irs.gov/Form8697 for instructions and the latest information.

Attachment
Sequence No. 97

For the filing year beginning

, and ending

. See instructions.

Name

A Identifying number

Number, street, and apt., room, or suite no. If a P.O. box, see instructions.

B Check applicable box to show type of taxpayer:

City or town

State or province

ZIP or foreign postal code

Corporation

S corporation

Individual

Partnership

Estate or trust
C

If you were an owner of an interest in a pass-through entity (such as a partnership or an S corporation) that holds one or more long-term contracts to which this interest
computation relates, enter the name and employer identification number of the entity. Attach a schedule if there is more than one such entity.
Employer identification number

Name of entity

1

Regular Method (see instructions)

Taxable income or loss for the prior years shown on tax
return (or as previously adjusted) before net operating loss
or capital loss carrybacks (other than carrybacks that must
be taken into account to properly compute interest under
section 460) (see instructions). If you were required to file
Form 8697 for an earlier year, enter adjusted taxable
income for the prior years from line 3, Form 8697, for the
most recent filing year that affects the prior years
. .

Filing year

Redetermination years
(a)
Year ended

Year ended
mo.

yr.

mo.

yr.

(b)
Year ended
mo.

yr.

2

Adjustment to income to reflect the difference between:
(a) the amount of income required to be allocated for
post-February 1986 contracts completed or adjusted
during the tax year based on the actual contract price
and costs, and (b) the amount of income reported for such
contracts based on estimated contract price and costs.
See instructions and attach a schedule listing each
separate contract, unless you were an owner of an
interest in a pass-through entity reporting this amount
from Schedule K-1 or a similar statement . . . . .

3

Adjusted taxable income for look-back purposes.
Combine lines 1 and 2. If line 3 is a negative amount, see
instructions . . . . . . . . . . . . . .

4

Income tax liability on line 3 amount using tax rates in
effect for the prior years (see instructions) . . . . .

5

Income tax liability shown on return (or as previously
adjusted) for the prior years (see instructions). If you were
required to file Form 8697 for an earlier year, enter the
amount required to be reported on line 4, Form 8697, for
the most recent filing year that affects the prior years .

6

Increase or decrease in tax for the prior years on which
interest is due (or is to be refunded). Subtract line 5 from
line 4
. . . . . . . . . . . . . . .

7

Interest due on increase, if any, shown on line 6 (see
instructions) . . . . . . . . . . . . .

8

Interest to be refunded on decrease, if any, shown on
line 6 (see instructions) . . . . . . . . . .

9a

Net interest to be refunded to you. If line 8, column (c), is greater than line 7, column (c), enter the excess. File
Form 8697 separately. Do not attach it to your tax return (see instructions) . . . . . . . . . . . . .
b Routing number

c Type:

Checking

(c)
Totals
(Add columns (a)
and (b).)

Savings

d Account number
10

Net interest you owe. If line 7, column (c), is greater than line 8, column (c), enter the excess. File Form 8697 with your
tax return. See instructions for where to include this amount on your return . . . . . . . . . . . . .

For Privacy Act and Paperwork Reduction Act Notice, see instructions.

Cat. No. 64598V

Form 8697 (Rev. 12-2025) Created 5/22/25

DRAFT — DO NOT FILE

DRAFT — DO NOT FILE

Part I

TREASURY/IRS AND OMB USE ONLY DRAFT
Page 2

Form 8697 (Rev. 12-2025)

Part II

Adjustment to regular taxable income to reflect the
difference between: (a) the amount of such income
required to be allocated for post-February 1986 contracts
completed or adjusted during the tax year based on actual
contract price and costs, and (b) the amount of such
income reported for such contracts based on estimated
contract price and costs. See instructions and attach a
schedule listing each separate contract, unless you were
an owner of an interest in a pass-through entity reporting
this amount from Schedule K-1 or a similar statement .

2

Regular tax increase or decrease for prior years. Multiply
line 1 in each column by the applicable regular tax rate
(see instructions) . . . . . . . . . . . .

3

Adjustment to alternative minimum taxable income (AMTI)
to reflect the difference between: (a) AMTI required to be
allocated for post-February 1986 contracts completed or
adjusted during the tax year based on actual contract
price and costs, and (b) AMTI reported for such contracts
based on estimated contract price and costs. See
instructions and attach a schedule listing each separate
contract, unless you were an owner of an interest in a
pass-through entity reporting this amount from Schedule
K-1 or a similar statement . . . . . . . . .

4

Alternative minimum tax (AMT) increase or decrease for
prior years. Multiply line 3 in each column by the
applicable AMT rate (see instructions) . . . . . .

5

Enter the larger of line 2 or line 4. See instructions if either
amount is negative . . . . . . . . . . .

6

(a)
Year ended
mo.

yr.

(b)
Year ended
mo.

yr.

(d)
Totals
(Add columns (a),
(b), and (c).)

(c)
Year ended
mo.

yr.

Pass-through entities: Skip line 6 and enter on line 7 the
amount from line 5.
Overpayment ceiling. For each column in which line 5 is a
negative number, enter your total tax liability for the prior year,
as adjusted for past applications of the look-back method
and after net operating loss, capital loss, net section 1256
contracts loss, and credit carryovers and carrybacks to that
year. For each column in which line 5 is a positive number,
leave line 6 blank and enter on line 7 the amount from line 5

7

Increase or decrease in tax for the prior years on which
interest is due (or is to be refunded). Enter the smaller of
line 5 or line 6. Treat both numbers as positive when making
this comparison, but enter the amount as a negative number

8

Interest due on increase, if any, shown on line 7 (see
instructions) . . . . . . . . . . . . .

9

Interest to be refunded on decrease, if any, shown on
line 7 (see instructions) . . . . . . . . . .

10a

Date of each prior year to which interest
computation relates

DRAFT — DO NOT FILE

DRAFT — DO NOT FILE

1

Simplified Marginal Impact Method (SMIM) (see instructions)

Net interest to be refunded to you. If line 9, column (d), is greater than line 8, column (d), enter the excess. File
Form 8697 separately. Do not attach it to your tax return (see instructions) . . . . . . . . . . . . .
b Routing number

c Type:

Checking

Savings

d Account number
11

Net interest you owe. If line 8, column (d), exceeds line 9, column (d), enter the excess. File Form 8697 with your tax
return. See instructions for where to include this amount on your return . . . . . . . . . . . . . .

Signature(s). Complete this section only if you are filing this form by itself and not with your tax return.
Under penalties of perjury, I declare that I have examined this form, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true,
correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

Sign
Here
Paid
Preparer
Use Only

Your signature

Date

Spouse’s signature. If a joint return, both must sign

Date

Preparer’s name

Preparer’s signature

Date

PTIN
Check
if
self-employed

Firm’s name

Firm’s EIN

Firm’s address

Phone no.
Form 8697 (Rev. 12-2025)