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Ez 1040 E-file

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Ez 1040 E-file

Ez 1040 e-file 4. Ez 1040 e-file   Unrelated Business Taxable Income Table of Contents IncomeExclusions Dues of Agricultural Organizations and Business Leagues DeductionsDirectly Connected Exploitation of Exempt Activity—Advertising Sales Modifications Partnership Income or Loss S Corporation Income or Loss Special Rules for Foreign Organizations Special Rules for Social Clubs, VEBAs, SUBs, and GLSOsIncome that is set aside. Ez 1040 e-file Special Rules for Veterans' Organizations Income From Controlled OrganizationsAddition to tax for valuation misstatements. Ez 1040 e-file Net unrelated income. Ez 1040 e-file Net unrelated loss. Ez 1040 e-file Control. Ez 1040 e-file Income from property financed with qualified 501(c)(3) bonds. Ez 1040 e-file Disposition of property received from taxable subsidiary and used in unrelated business. Ez 1040 e-file Income From Debt-Financed Property Debt-Financed PropertyAcquisition Indebtedness Computation of Debt-Financed Income Deductions for Debt-Financed Property Allocation Rules How to Get Tax Help The term “unrelated business taxable income” generally means the gross income derived from any unrelated trade or business regularly conducted by the exempt organization, less the deductions directly connected with carrying on the trade or business. Ez 1040 e-file If an organization regularly carries on two or more unrelated business activities, its unrelated business taxable income is the total of gross income from all such activities less the total allowable deductions attributable to all the activities. Ez 1040 e-file In computing unrelated business taxable income, gross income and deductions are subject to the modifications and special rules explained in this chapter. Ez 1040 e-file Whether a particular item of income or expense falls within any of these modifications or special rules must be determined by all the facts and circumstances in each specific case. Ez 1040 e-file For example, if the organization received a payment termed rent that is in fact a return of profits by a person operating the property for the benefit of the organization, or that is a share of the profits retained by the organization as a partner or joint venturer, the payment is not within the income exclusion for rents, discussed later under Exclusions. Ez 1040 e-file Income Generally, unrelated business income is taxable, but there are exclusions and special rules that must be considered when figuring the income. Ez 1040 e-file Exclusions The following types of income (and deductions directly connected with the income) are generally excluded when figuring unrelated business taxable income. Ez 1040 e-file Dividends, interest, annuities and other investment income. Ez 1040 e-file   All dividends, interest, annuities, payments with respect to securities loans, income from notional principal contracts, and other income from an exempt organization's ordinary and routine investments that the IRS determines are substantially similar to these types of income are excluded in computing unrelated business taxable income. Ez 1040 e-file Exception for insurance activity income of a controlled foreign corporation. Ez 1040 e-file   This exclusion does not apply to income from certain insurance activities of an exempt organization's controlled foreign corporation. Ez 1040 e-file The income is not excludable dividend income, but instead is unrelated business taxable income to the extent it would be so treated if the exempt organization had earned it directly. Ez 1040 e-file Certain exceptions to this rule apply. Ez 1040 e-file For more information, see section 512(b)(17). Ez 1040 e-file Other exceptions. Ez 1040 e-file   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), to interest or annuities received from a controlled corporation (discussed under Income From Controlled Organizations, later). Ez 1040 e-file Income from lending securities. Ez 1040 e-file   Payments received with respect to a security loan are excluded in computing unrelated business taxable income only if the loan is made under an agreement that:    Provides for the return to the exempt organization of securities identical to the securities loaned, Requires payments to the organization of amounts equivalent to all interest, dividends, and other distributions that the owner of the securities is entitled to receive during the period of the loan, Does not reduce the organization's risk of loss or opportunity for gain on the securities, Contains reasonable procedures to implement the obligation of the borrower to furnish collateral to the organization with a fair market value each business day during the period of the loan in an amount not less than the fair market value of the securities at the close of the preceding business day, and Permits the organization to terminate the loan upon notice of not more than 5 business days. Ez 1040 e-file   Payments with respect to securities loans include: Amounts in respect of dividends, interest, and other distributions, Fees based on the period of time the loan is in effect and the fair market value of the security during that period, Income from collateral security for the loan, and Income from the investment of collateral security. Ez 1040 e-file The payments are considered to be from the securities loaned and not from collateral security or the investment of collateral security from the loans. Ez 1040 e-file Any deductions that are directly connected with collateral security for the loan, or with the investment of collateral security, are considered deductions that are directly connected with the securities loaned. Ez 1040 e-file Royalties. Ez 1040 e-file   Royalties, including overriding royalties, are excluded in computing unrelated business taxable income. Ez 1040 e-file   To be considered a royalty, a payment must relate to the use of a valuable right. Ez 1040 e-file Payments for trademarks, trade names, or copyrights are ordinarily considered royalties. Ez 1040 e-file Similarly, payments for the use of a professional athlete's name, photograph, likeness, or facsimile signature are ordinarily considered royalties. Ez 1040 e-file However, royalties do not include payments for personal services. Ez 1040 e-file Therefore, payments for personal appearances and interviews are not excluded as royalties and must be included in figuring unrelated business taxable income. Ez 1040 e-file   Unrelated business taxable income does not include royalty income received from licensees by an exempt organization that is the legal and beneficial owner of patents assigned to it by inventors for specified percentages of future royalties. Ez 1040 e-file   Mineral royalties are excluded whether measured by production or by gross or taxable income from the mineral property. Ez 1040 e-file However, the exclusion does not apply to royalties that stem from an arrangement whereby the organization owns a working interest in a mineral property and is liable for its share of the development and operating costs under the terms of its agreement with the operator of the property. Ez 1040 e-file To the extent they are not treated as loans under section 636 (relating to income tax treatment of mineral production payments), payments for mineral production are treated in the same manner as royalty payments for the purpose of computing unrelated business taxable income. Ez 1040 e-file To the extent they are treated as loans, any payments for production that are the equivalent of interest are treated as interest and are excluded. Ez 1040 e-file Exceptions. Ez 1040 e-file   This exclusion does not apply to debt-financed income (discussed under Income From Debt-Financed Property, later) or to royalties received from a controlled corporation (discussed under Income From Controlled Organizations, later). Ez 1040 e-file Rents. Ez 1040 e-file   Rents from real property, including elevators and escalators, are excluded in computing unrelated business taxable income. Ez 1040 e-file Rents from personal property are not excluded. Ez 1040 e-file However, special rules apply to “mixed leases” of both real and personal property. Ez 1040 e-file Mixed leases. Ez 1040 e-file   In a mixed lease, all of the rents are excluded if the rents attributable to the personal property are not more than 10% of the total rents under the lease, as determined when the personal property is first placed in service by the lessee. Ez 1040 e-file If the rents attributable to personal property are more than 10% but not more than 50% of the total rents, only the rents attributable to the real property are excluded. Ez 1040 e-file If the rents attributable to the personal property are more than 50% of the total rents, none of the rents are excludable. Ez 1040 e-file   Property is placed in service when the lessee first may use it under the terms of a lease. Ez 1040 e-file For example, property subject to a lease entered into on November 1, for a term starting on January 1 of the next year, is considered placed in service on January 1, regardless of when the lessee first actually uses it. Ez 1040 e-file   If separate leases are entered into for real and personal property and the properties have an integrated use (for example, one or more leases for real property and another lease or leases for personal property to be used on the real property), all the leases will be considered as one lease. Ez 1040 e-file   The rent attributable to the personal property must be recomputed, and the treatment of the rents must be redetermined, if: The rent attributable to all the leased personal property increases by 100% or more because additional or substitute personal property is placed in service, or The lease is modified to change the rent charged (whether or not the amount of rented personal property changes). Ez 1040 e-file Any change in the treatment of rents resulting from the recomputation is effective only for the period beginning with the event that caused the recomputation. Ez 1040 e-file Exception for rents based on net profit. Ez 1040 e-file   The exclusion for rents does not apply if the amount of the rent depends on the income or profits derived by any person from the leased property, other than an amount based on a fixed percentage of the gross receipts or sales. Ez 1040 e-file Exception for income from personal services. Ez 1040 e-file   Payment for occupying space when personal services are also rendered to the occupant does not constitute rent from real property. Ez 1040 e-file Therefore, the exclusion does not apply to transactions such as renting hotel rooms, rooms in boarding houses or tourist homes, and space in parking lots or warehouses. Ez 1040 e-file Other exceptions. Ez 1040 e-file   This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later), or to interest, annuities, royalties and rents received from a controlled corporation (discussed under Income From Controlled Organizations, later), investment income (dividends, interest, rents, etc. Ez 1040 e-file ) received by organizations described in sections 501(c)(7), 501(c)(9), 501(c)(17), and 501(c)(20). Ez 1040 e-file See Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs, discussed later for more information. Ez 1040 e-file Income from research. Ez 1040 e-file   A tax-exempt organization may exclude income from research grants or contracts from unrelated business taxable income. Ez 1040 e-file However, the extent of the exclusion depends on the nature of the organization and the type of research. Ez 1040 e-file   Income from research for the United States, any of its agencies or instrumentalities, or a state or any of its political subdivisions is excluded when computing unrelated business taxable income. Ez 1040 e-file   For a college, university, or hospital, all income from research, whether fundamental or applied, is excluded in computing unrelated business taxable income. Ez 1040 e-file   When an organization is operated primarily to conduct fundamental research (as distinguished from applied research) and the results are freely available to the general public, all income from research performed for any person is excluded in computing unrelated business taxable income. Ez 1040 e-file   The term research, for this purpose, does not include activities of a type normally conducted as an incident to commercial or industrial operations, such as testing or inspecting materials or products, or designing or constructing equipment, buildings, etc. Ez 1040 e-file In addition, the term fundamental research does not include research conducted for the primary purpose of commercial or industrial application. Ez 1040 e-file Gains and losses from disposition of property. Ez 1040 e-file   Also excluded from unrelated business taxable income are gains or losses from the sale, exchange, or other disposition of property other than: Stock in trade or other property of a kind that would properly be includable in inventory if on hand at the close of the tax year, Property held primarily for sale to customers in the ordinary course of a trade or business, or Cutting of timber that an organization has elected to consider as a sale or exchange of the timber. Ez 1040 e-file   It should be noted that the last exception relates only to cut timber. Ez 1040 e-file The sale, exchange, or other disposition of standing timber is excluded from the computation of unrelated business income, unless it constitutes property held for sale to customers in the ordinary course of business. Ez 1040 e-file Lapse or termination of options. Ez 1040 e-file   Any gain from the lapse or termination of options to buy or sell securities is excluded from unrelated business taxable income. Ez 1040 e-file The exclusion applies only if the option is written in connection with the exempt organization's investment activities. Ez 1040 e-file Therefore, this exclusion is not available if the organization is engaged in the trade or business of writing options or the options are held by the organization as inventory or for sale to customers in the ordinary course of a trade or business. Ez 1040 e-file Exception. Ez 1040 e-file   This exclusion does not apply to unrelated debt-financed income, discussed later under Income From Debt-Financed Property. Ez 1040 e-file Gain or loss on disposition of certain brownfield property. Ez 1040 e-file   Gain or loss from the qualifying sale, exchange, or other disposition of a qualifying brownfield property (as defined in section 512(b)(19)(C)), which was acquired by the organization after December 31, 2005 and before January 1, 2011, is excluded from unrelated business taxable income and is excepted from the debt-financed rules for such property. Ez 1040 e-file See sections 512(b)(19) and 514(b)(1)(E). Ez 1040 e-file Income from services provided under federal license. Ez 1040 e-file   There is a further exclusion from unrelated business taxable income of income from a trade or business conducted by a religious order or by an educational organization maintained by the order. Ez 1040 e-file   This exclusion applies only if the following requirements are met. Ez 1040 e-file The trade or business must have been operated by the order or by the institution before May 27, 1959. Ez 1040 e-file The trade or business must provide services under a license issued by a federal regulatory agency. Ez 1040 e-file More than 90% of the net income from the business for the tax year must be devoted to religious, charitable, or educational purposes that constitute the basis for the religious order's exemption. Ez 1040 e-file The rates or other charges for these services must be fully competitive with the rates or other charges of similar taxable businesses. Ez 1040 e-file Rates or other charges for these services will be considered as fully competitive if they are neither materially higher nor materially lower than the rates charged by similar businesses operating in the same general area. Ez 1040 e-file Exception. Ez 1040 e-file    This exclusion does not apply to unrelated debt-financed income (discussed under Income From Debt-Financed Property, later). Ez 1040 e-file Member income of mutual or cooperative electric companies. Ez 1040 e-file   Income of a mutual or cooperative electric company described in section 501(c)(12) which is treated as member income under subparagraph (H) of that section is excluded from unrelated business taxable income. Ez 1040 e-file Dues of Agricultural Organizations and Business Leagues Dues received from associate members by organizations exempt under section 501(c)(5) or section 501(c)(6) may be treated as gross income from an unrelated trade or business if the associate member category exists for the principal purpose of producing unrelated business income. Ez 1040 e-file For example, if an organization creates an associate member category solely to allow associate members to purchase insurance through the organization, the associate member dues may be unrelated business income. Ez 1040 e-file Exception. Ez 1040 e-file   Associate member dues received by an agricultural or horticultural organization are not treated as gross income from an unrelated trade or business, regardless of their purpose, if they are not more than the annual limit. Ez 1040 e-file The limit on dues paid by an associate member is $148 for 2011. Ez 1040 e-file   If the required annual dues are more than the limit, the entire amount is treated as income from an unrelated business unless the associate member category was formed or availed of for the principal purpose of furthering the organization's exempt purposes. Ez 1040 e-file Deductions To qualify as allowable deductions in computing unrelated business taxable income, the expenses, depreciation, and similar items generally must be allowable income tax deductions that are directly connected with carrying on an unrelated trade or business. Ez 1040 e-file They cannot be directly connected with excluded income. Ez 1040 e-file For an exception to the “directly connected” requirement, see Charitable contributions deduction, under Modifications, later. Ez 1040 e-file Directly Connected To be directly connected with the conduct of an unrelated business, deductions must have a proximate and primary relationship to carrying on that business. Ez 1040 e-file For an exception, see Expenses attributable to exploitation of exempt activities, later. Ez 1040 e-file Expenses attributable solely to unrelated business. Ez 1040 e-file   Expenses, depreciation, and similar items attributable solely to the conduct of an unrelated business are proximately and primarily related to that business and qualify for deduction to the extent that they are otherwise allowable income tax deductions. Ez 1040 e-file   For example, salaries of personnel employed full-time to conduct the unrelated business and depreciation of a building used entirely in the conduct of that business are deductible to the extent otherwise allowable. Ez 1040 e-file Expenses attributable to dual use of facilities or personnel. Ez 1040 e-file   When facilities or personnel are used both to conduct exempt functions and to conduct an unrelated trade or business, expenses, depreciation, and similar items attributable to the facilities or personnel must be allocated between the two uses on a reasonable basis. Ez 1040 e-file The part of an item allocated to the unrelated trade or business is proximately and primarily related to that business and is allowable as a deduction in computing unrelated business taxable income if the expense is otherwise an allowable income tax deduction. Ez 1040 e-file Example 1. Ez 1040 e-file A school recognized as a tax-exempt organization contracts with an individual to conduct a summer tennis camp. Ez 1040 e-file The school provides the tennis courts, housing, and dining facilities. Ez 1040 e-file The contracted individual hires the instructors, recruits campers, and provides supervision. Ez 1040 e-file The income the school receives from this activity is from a dual use of the facilities and personnel. Ez 1040 e-file The school, in computing its unrelated business taxable income, may deduct an allocable part of the expenses attributable to the facilities and personnel. Ez 1040 e-file Example 2. Ez 1040 e-file An exempt organization with gross income from an unrelated trade or business pays its president $90,000 a year. Ez 1040 e-file The president devotes approximately 10% of his time to the unrelated business. Ez 1040 e-file To figure the organization's unrelated business taxable income, a deduction of $9,000 ($90,000 × 10%) is allowed for the salary paid to its president. Ez 1040 e-file Expenses attributable to exploitation of exempt activities. Ez 1040 e-file   Generally, expenses, depreciation, and similar items attributable to the conduct of an exempt activity are not deductible in computing unrelated business taxable income from an unrelated trade or business that exploits the exempt activity. Ez 1040 e-file (See Exploitation of exempt functions under Not substantially related in chapter 3. Ez 1040 e-file ) This is because they do not have a proximate and primary relationship to the unrelated trade or business, and therefore, they do not qualify as directly connected with that business. Ez 1040 e-file Exception. Ez 1040 e-file   Expenses, depreciation, and similar items may be treated as directly connected with the conduct of the unrelated business if all the following statements are true. Ez 1040 e-file The unrelated business exploits the exempt activity. Ez 1040 e-file The unrelated business is a type normally conducted for profit by taxable organizations. Ez 1040 e-file The exempt activity is a type normally conducted by taxable organizations in carrying on that type of business. Ez 1040 e-file The amount treated as directly connected is the smaller of: The excess of these expenses, depreciation, and similar items over the income from, or attributable to, the exempt activity; or The gross unrelated business income reduced by all other expenses, depreciation, and other items that are actually directly connected. Ez 1040 e-file   The application of these rules to an advertising activity that exploits an exempt publishing activity is explained next. Ez 1040 e-file Exploitation of Exempt Activity—Advertising Sales The sale of advertising in a periodical of an exempt organization that contains editorial material related to the accomplishment of the organization's exempt purpose is an unrelated business that exploits an exempt activity, the circulation and readership of the periodical. Ez 1040 e-file Therefore, in addition to direct advertising costs, exempt activity costs (expenses, depreciation, and similar expenses attributable to the production and distribution of the editorial or readership content) can be treated as directly connected with the conduct of the advertising activity. Ez 1040 e-file (See Expenses attributable to exploitation of exempt activities under Directly Connected, earlier. Ez 1040 e-file ) Figuring unrelated business taxable income (UBTI). Ez 1040 e-file   The UBTI of an advertising activity is the amount shown in the following chart. Ez 1040 e-file IF gross advertising income is . Ez 1040 e-file . Ez 1040 e-file . Ez 1040 e-file THEN UBTI is . Ez 1040 e-file . Ez 1040 e-file . Ez 1040 e-file More than direct advertising costs The excess advertising income, reduced (but not below zero) by the excess, if any, of readership costs over circulation income. Ez 1040 e-file Equal to or less than direct advertising costs Zero. Ez 1040 e-file   • Circulation income and readership costs are not taken into account. Ez 1040 e-file   • Any excess advertising costs reduce (but not below zero) UBTI from any other unrelated business activity. Ez 1040 e-file   The terms used in the chart are explained in the following discussions. Ez 1040 e-file Periodical Income Gross advertising income. Ez 1040 e-file   This is all the income from the unrelated advertising activities of an exempt organization periodical. Ez 1040 e-file Circulation income. Ez 1040 e-file   This is all the income from the production, distribution, or circulation of an exempt organization's periodical (other than gross advertising income). Ez 1040 e-file It includes all amounts from the sale or distribution of the readership content of the periodical, such as income from subscriptions. Ez 1040 e-file It also includes allocable membership receipts if the right to receive the periodical is associated with a membership or similar status in the organization. Ez 1040 e-file Allocable membership receipts. Ez 1040 e-file   This is the part of membership receipts (dues, fees, or other charges associated with membership) equal to the amount that would have been charged and paid for the periodical if: The periodical was published by a taxable organization, The periodical was published for profit, and The member was an unrelated party dealing with the taxable organization at arm's length. Ez 1040 e-file   The amount used to allocate membership receipts is the amount shown in the following chart. Ez 1040 e-file   For this purpose, the total periodical costs are the sum of the direct advertising costs and the readership costs, explained under Periodical Costs, later. Ez 1040 e-file The cost of other exempt activities means the total expenses incurred by the organization in connection with its other exempt activities, not offset by any income earned by the organization from those activities. Ez 1040 e-file IF . Ez 1040 e-file . Ez 1040 e-file . Ez 1040 e-file THEN the amount used to allocate membership receipts is . Ez 1040 e-file . Ez 1040 e-file . Ez 1040 e-file 20% or more of the total circulation consists of sales to nonmembers The subscription price charged nonmembers. Ez 1040 e-file The above condition does not apply, and 20% or more of the members pay reduced dues because they do not receive the periodical The reduction in dues for a member not receiving the periodical. Ez 1040 e-file Neither of the above conditions applies The membership receipts multiplied by this fraction:   Total periodical costs Total periodical costs Plus Cost of other exempt activities Example 1. Ez 1040 e-file U is an exempt scientific organization with 10,000 members who pay annual dues of $15. Ez 1040 e-file One of U's activities is publishing a monthly periodical distributed to all of its members. Ez 1040 e-file U also distributes 5,000 additional copies of its periodical to nonmembers, who subscribe for $10 a year. Ez 1040 e-file Since the nonmember circulation of U's periodical represents one-third (more than 20%) of its total circulation, the subscription price charged to nonmembers is used to determine the part of U's membership receipts allocable to the periodical. Ez 1040 e-file Thus, U's allocable membership receipts are $100,000 ($10 times 10,000 members), and U's total circulation income for the periodical is $150,000 ($100,000 from members plus $50,000 from sales to nonmembers). Ez 1040 e-file Example 2. Ez 1040 e-file Assume the same facts except that U sells only 500 copies of its periodical to nonmembers, at a price of $10 a year. Ez 1040 e-file Assume also that U's members may elect not to receive the periodical, in which case their dues are reduced from $15 a year to $6 a year, and that only 3,000 members elect to receive the periodical and pay the full dues of $15 a year. Ez 1040 e-file U's stated subscription price of $9 to members consistently results in an excess of total income (including gross advertising income) attributable to the periodical over total costs of the periodical. Ez 1040 e-file Since the 500 copies of the periodical distributed to nonmembers represent only 14% of the 3,500 copies distributed, the $10 subscription price charged to nonmembers is not used to determine the part of membership receipts allocable to the periodical. Ez 1040 e-file Instead, since 70% of the members elect not to receive the periodical and pay $9 less per year in dues, the $9 price is used to determine the subscription price charged to members. Ez 1040 e-file Thus, the allocable membership receipts will be $9 a member, or $27,000 ($9 times 3,000 copies). Ez 1040 e-file U's total circulation income is $32,000 ($27,000 plus the $5,000 from nonmember subscriptions). Ez 1040 e-file Periodical Costs Direct advertising costs. Ez 1040 e-file   These are expenses, depreciation, and similar items of deduction directly connected with selling and publishing advertising in the periodical. Ez 1040 e-file   Examples of allowable deductions under this classification include agency commissions and other direct selling costs, such as transportation and travel expenses, office salaries, promotion and research expenses, and office overhead directly connected with the sale of advertising lineage in the periodical. Ez 1040 e-file Also included are other deductions commonly classified as advertising costs under standard account classifications, such as artwork and copy preparation, telephone, telegraph, postage, and similar costs directly connected with advertising. Ez 1040 e-file   In addition, direct advertising costs include the part of mechanical and distribution costs attributable to advertising lineage. Ez 1040 e-file For this purpose, the general account classifications of items includable in mechanical and distribution costs ordinarily employed in business-paper and consumer-publication accounting provide a guide for the computation. Ez 1040 e-file Accordingly, the mechanical and distribution costs include the part of the costs and other expenses of composition, press work, binding, mailing (including paper and wrappers used for mailing), and bulk postage attributable to the advertising lineage of the publication. Ez 1040 e-file   In the absence of specific and detailed records, the part of mechanical and distribution costs attributable to the periodical's advertising lineage can be based on the ratio of advertising lineage to total lineage in the periodical, if this allocation is reasonable. Ez 1040 e-file Readership costs. Ez 1040 e-file   These are all expenses, depreciation, and similar items that are directly connected with the production and distribution of the readership content of the periodical. Ez 1040 e-file Costs partly attributable to other activities. Ez 1040 e-file   Deductions properly attributable to exempt activities other than publishing the periodical may not be allocated to the periodical. Ez 1040 e-file When expenses are attributable both to the periodical and to the organization's other activities, an allocation must be made on a reasonable basis. Ez 1040 e-file The method of allocation will vary with the nature of the item, but once adopted, should be used consistently. Ez 1040 e-file Allocations based on dollar receipts from various exempt activities generally are not reasonable since receipts usually do not accurately reflect the costs associated with specific activities that an exempt organization conducts. Ez 1040 e-file Consolidated Periodicals If an exempt organization publishes more than one periodical to produce income, it may treat all of them (but not less than all) as one in determining unrelated business taxable income from selling advertising. Ez 1040 e-file It treats the gross income from all the periodicals, and the deductions directly connected with them, on a consolidated basis. Ez 1040 e-file Consolidated treatment, once adopted, must be followed consistently and is binding. Ez 1040 e-file This treatment can be changed only with the consent of the Internal Revenue Service. Ez 1040 e-file An exempt organization's periodical is published to produce income if: The periodical generates gross advertising income to the organization equal to at least 25% of its readership costs, and Publishing the periodical is an activity engaged in for profit. Ez 1040 e-file Whether the publication of a periodical is an activity engaged in for profit can be determined only by all the facts and circumstances in each case. Ez 1040 e-file The facts and circumstances must show that the organization carries on the activity for economic profit, although there may not be a profit in a particular year. Ez 1040 e-file For example, if an organization begins publishing a new periodical whose total costs exceed total income in the start-up years because of lack of advertising sales, that does not mean that the organization did not have as its objective an economic profit. Ez 1040 e-file The organization may establish that it had this objective by showing it can reasonably expect advertising sales to increase, so that total income will exceed costs within a reasonable time. Ez 1040 e-file Example. Ez 1040 e-file Y, an exempt trade association, publishes three periodicals that it distributes to its members: a weekly newsletter, a monthly magazine, and a quarterly journal. Ez 1040 e-file Both the monthly magazine and the quarterly journal contain advertising that accounts for gross advertising income equal to more than 25% of their respective readership costs. Ez 1040 e-file Similarly, the total income attributable to each periodical has exceeded the total deductions attributable to each periodical for substantially all the years they have been published. Ez 1040 e-file The newsletter carries no advertising and its annual subscription price is not intended to cover the cost of publication. Ez 1040 e-file The newsletter is a service that Y distributes to all of its members in an effort to keep them informed of changes occurring in the business world. Ez 1040 e-file It is not engaged in for profit. Ez 1040 e-file Under these circumstances, Y may consolidate the income and deductions from the monthly and quarterly journals in computing its unrelated business taxable income. Ez 1040 e-file It may not consolidate the income and deductions from the newsletter with the income and deductions of its other periodicals, since the newsletter is not published for the production of income. Ez 1040 e-file Modifications Net operating loss deduction. Ez 1040 e-file   The net operating loss (NOL) deduction (as provided in section 172) is allowed in computing unrelated business taxable income. Ez 1040 e-file However, the NOL for any tax year, the carrybacks and carryovers of NOLs, and the NOL deduction are determined without taking into account any amount of income or deduction that has been specifically excluded in computing unrelated business taxable income. Ez 1040 e-file For example, a loss from an unrelated trade or business is not diminished because dividend income was received. Ez 1040 e-file   If this were not done, organizations would, in effect, be taxed on their exempt income, since unrelated business losses then would be offset by dividends, interest, and other excluded income. Ez 1040 e-file This would reduce the loss that could be applied against unrelated business income of prior or future tax years. Ez 1040 e-file Therefore, to preserve the immunity of exempt income, all NOL computations are limited to those items of income and deductions that affect the unrelated business taxable income. Ez 1040 e-file   In line with this concept, an NOL carryback or carryover is allowed only from a tax year for which the organization is subject to tax on unrelated business income. Ez 1040 e-file   For example, if an organization just became subject to the tax last year, its NOL for that year is not a carryback to a prior year when it had no unrelated business taxable income, nor is its NOL carryover to succeeding years reduced by the related income of those prior years. Ez 1040 e-file   However, in determining the span of years for which an NOL may be carried back or forward, the tax years for which the organization is not subject to the tax on unrelated business income are counted. Ez 1040 e-file For example, if an organization was subject to the tax for 2009 and had an NOL for that year, the last tax year to which any part of that loss may be carried over is 2029, regardless of whether the organization was subject to the unrelated business income tax in any of the intervening years. Ez 1040 e-file   For more details on the NOL deduction, including property eligible for an extended carryback period, see sections 172 and 1400N, Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts, and Publication 4492-B, Information for Affected Taxpayers in the Midwestern Disaster Areas. Ez 1040 e-file Charitable contributions deduction. Ez 1040 e-file   An exempt organization is allowed to deduct its charitable contributions in computing its unrelated business taxable income whether or not the contributions are directly connected with the unrelated business. Ez 1040 e-file   To be deductible, the contribution must be paid to another qualified organization. Ez 1040 e-file For example, an exempt university that operates an unrelated business may deduct a contribution made to another university for educational work, but may not claim a deduction for contributions of amounts spent for carrying out its own educational program. Ez 1040 e-file   For purposes of the deduction, a distribution by a trust made under the trust instrument to a beneficiary, which itself is a qualified organization, is treated the same as a contribution. Ez 1040 e-file Deduction limits. Ez 1040 e-file   An exempt organization that is subject to the unrelated business income tax at corporate rates is allowed a deduction for charitable contributions up to 10% of its unrelated business taxable income computed without regard to the deduction for contributions. Ez 1040 e-file See the Instructions for Form 990-T for more information. Ez 1040 e-file    An exempt trust that is subject to the unrelated business income tax at trust rates generally is allowed a deduction for charitable contributions in the same amounts as allowed for individuals. Ez 1040 e-file However, the limit on the deduction is determined in relation to the trust's unrelated business taxable income computed without regard to the deduction, rather than in relation to adjusted gross income. Ez 1040 e-file   Contributions in excess of the limits just described may be carried over to the next 5 tax years. Ez 1040 e-file A contribution carryover is not allowed, however, to the extent that it increases an NOL carryover. Ez 1040 e-file Suspension of deduction limits for farmers and ranchers. Ez 1040 e-file   The limitations discussed above are temporarily suspended for certain qualified conservation contributions of property used in agriculture or livestock production. Ez 1040 e-file See the Instructions for Form 990-T for details. Ez 1040 e-file Specific deduction. Ez 1040 e-file   In computing unrelated business taxable income, a specific deduction of $1,000 is allowed. Ez 1040 e-file However, the specific deduction is not allowed in computing an NOL or the NOL deduction. Ez 1040 e-file   Generally, the deduction is limited to $1,000 regardless of the number of unrelated businesses in which the organization is engaged. Ez 1040 e-file Exception. Ez 1040 e-file   An exception is provided in the case of a diocese, province of a religious order, or a convention or association of churches that may claim a specific deduction for each parish, individual church, district, or other local unit. Ez 1040 e-file In these cases, the specific deduction for each local unit is limited to the lower of: $1,000, or Gross income derived from an unrelated trade or business regularly conducted by the local unit. Ez 1040 e-file   This exception applies only to parishes, districts, or other local units that are not separate legal entities, but are components of a larger entity (diocese, province, convention, or association) filing Form 990-T. Ez 1040 e-file The parent organization must file a return reporting the unrelated business gross income and related deductions of all units that are not separate legal entities. Ez 1040 e-file The local units cannot file separate returns. Ez 1040 e-file However, each local unit that is separately incorporated must file its own return and cannot include, or be included with, any other entity. Ez 1040 e-file See Title-holding corporations in chapter 1 for a discussion of the only situation in which more than one legal entity may be included on the same Form 990-T. Ez 1040 e-file Example. Ez 1040 e-file X is an association of churches and is divided into local units A, B, C, and D. Ez 1040 e-file Last year, A, B, C, and D derived gross income of, respectively, $1,200, $800, $1,500, and $700 from unrelated businesses that they regularly conduct. Ez 1040 e-file X may claim a specific deduction of $1,000 with respect to A, $800 with respect to B, $1,000 with respect to C, and $700 with respect to D. Ez 1040 e-file Partnership Income or Loss An organization may have unrelated business income or loss as a member of a partnership, rather than through direct business dealings with the public. Ez 1040 e-file If so, it must treat its share of the partnership income or loss as if it had conducted the business activity in its own capacity as a corporation or trust. Ez 1040 e-file No distinction is made between limited and general partners. Ez 1040 e-file The organization is required to notify the partnership of its tax-exempt status. Ez 1040 e-file Thus, if an organization is a member of a partnership regularly engaged in a trade or business that is an unrelated trade or business with respect to the organization, the organization must include in its unrelated business taxable income its share of the partnership's gross income from the unrelated trade or business (whether or not distributed), and the deductions attributable to it. Ez 1040 e-file The partnership income and deductions to be included in the organization's unrelated business taxable income are figured the same way as any income and deductions from an unrelated trade or business conducted directly by the organization. Ez 1040 e-file The partnership is required to provide the organization this information on Schedule K-1. Ez 1040 e-file Example. Ez 1040 e-file An exempt educational organization is a partner in a partnership that operates a factory. Ez 1040 e-file The partnership also holds stock in a corporation. Ez 1040 e-file The exempt organization must include its share of the gross income from operating the factory in its unrelated business taxable income but may exclude its share of any dividends the partnership received from the corporation. Ez 1040 e-file Different tax years. Ez 1040 e-file   If the exempt organization and the partnership of which it is a member have different tax years, the partnership items that enter into the computation of the organization's unrelated business taxable income must be based on the income and deductions of the partnership for the partnership's tax year that ends within or with the organization's tax year. Ez 1040 e-file S Corporation Income or Loss An organization that owns S corporation stock must take into account its share of the S corporation's income, deductions, or losses in figuring unrelated business taxable income, regardless of the actual source or nature of the income, deductions, and losses. Ez 1040 e-file For example, the organization's share of the S corporation's interest and dividend income will be taxable, even though interest and dividends are normally excluded from unrelated business taxable income. Ez 1040 e-file The organization must also take into account its gain or loss on the sale or other disposition of the S corporation stock in figuring unrelated business taxable income. Ez 1040 e-file Special Rules for Foreign Organizations The unrelated business taxable income of a foreign organization exempt from tax under section 501(a) consists of the organization's: Unrelated business taxable income derived from sources within the United States but not effectively connected with the conduct of a trade or business within the United States, and Unrelated business taxable income effectively connected with the conduct of a trade or business within the United States, whether or not this income is derived from sources within the United States. Ez 1040 e-file To determine whether income realized by a foreign organization is derived from sources within the United States or is effectively connected with the conduct of a trade or business within the United States, see sections 861 through 865 and the related regulations. Ez 1040 e-file Special Rules for Social Clubs, VEBAs, SUBs, and GLSOs The following discussion applies to: Social clubs described in section 501(c)(7), Voluntary employees' beneficiary associations (VEBAs) described in section 501(c)(9), Supplemental unemployment compensation benefit trusts (SUBs) described in section 501(c)(17), and Group legal services organizations (GLSOs) described in section 501(c)(20). Ez 1040 e-file These organizations must figure unrelated business taxable income under special rules. Ez 1040 e-file Unlike other exempt organizations, they cannot exclude their investment income (dividends, interest, rents, etc. Ez 1040 e-file ). Ez 1040 e-file (See Exclusions under Income, earlier. Ez 1040 e-file ) Therefore, they are generally subject to unrelated business income tax on this income. Ez 1040 e-file The unrelated business taxable income of these organizations includes all gross income, less deductions directly connected with the production of that income, except that gross income for this purpose does not include exempt function income. Ez 1040 e-file The dividends received by a corporation are not allowed in computing unrelated business taxable income because it is not an expense incurred in the production of income. Ez 1040 e-file Losses from nonexempt activities. Ez 1040 e-file   Losses from nonexempt activities of these organizations cannot be used to offset investment income unless the activities were undertaken with the intent to make a profit. Ez 1040 e-file Example. Ez 1040 e-file A private golf and country club that is a qualified tax-exempt social club has nonexempt function income from interest and from the sale of food and beverages to nonmembers. Ez 1040 e-file The club sells food and beverages as a service to members and their guests rather than for the purpose of making a profit. Ez 1040 e-file Therefore, any loss resulting from sales to nonmembers cannot be used to offset the club's interest income. Ez 1040 e-file Modifications. Ez 1040 e-file   The unrelated business taxable income is modified by any NOL or charitable contributions deduction and by the specific deduction (described earlier under Deductions). Ez 1040 e-file Exempt function income. Ez 1040 e-file   This is gross income from dues, fees, charges or similar items paid by members for goods, facilities, or services to the members or their dependents or guests, to further the organization's exempt purposes. Ez 1040 e-file Exempt function income also includes income set aside for qualified purposes. Ez 1040 e-file Income that is set aside. Ez 1040 e-file   This is income set aside to be used for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Ez 1040 e-file In addition, for a VEBA, SUB, or GLSO, it is income set aside to provide for the payment of life, sick, accident, or other benefits. Ez 1040 e-file   However, any amounts set aside by a VEBA or SUB that exceed the organization's qualified asset account limit (determined under section 419A) are unrelated business income. Ez 1040 e-file Special rules apply to the treatment of existing reserves for post-retirement medical or life insurance benefits. Ez 1040 e-file These rules are explained in section 512(a)(3)(E)(ii). Ez 1040 e-file   Income derived from an unrelated trade or business may not be set aside and therefore cannot be exempt function income. Ez 1040 e-file In addition, any income set aside and later spent for other purposes must be included in unrelated business taxable income. Ez 1040 e-file   Set-aside income is generally excluded from gross income only if it is set aside in the tax year in which it is otherwise includible in gross income. Ez 1040 e-file However, income set aside on or before the date for filing Form 990-T, including extensions of time, may, at the election of the organization, be treated as having been set aside in the tax year for which the return was filed. Ez 1040 e-file The income set aside must have been includible in gross income for that earlier year. Ez 1040 e-file Nonrecognition of gain. Ez 1040 e-file   If the organization sells property used directly in performing an exempt function and purchases other property used directly in performing an exempt function, any gain on the sale is recognized only to the extent that the sales price of the old property exceeds the cost of the new property. Ez 1040 e-file The purchase of the new property must be made within 1 year before the date of sale of the old property or within 3 years after the date of sale. Ez 1040 e-file   This rule also applies to gain from an involuntary conversion of the property resulting from its destruction in whole or in part, theft, seizure, requisition, or condemnation. Ez 1040 e-file Special Rules for Veterans' Organizations Unrelated business taxable income of a veterans' organization that is exempt under section 501(c)(19) does not include the net income from insurance business that is properly set aside. Ez 1040 e-file The organization may set aside income from payments received for life, sick, accident, or health insurance for the organization's members or their dependents for the payment of insurance benefits or reasonable costs of insurance administration, or for use exclusively for religious, charitable, scientific, literary, or educational purposes, or the prevention of cruelty to children or animals. Ez 1040 e-file For details, see section 512(a)(4) and the regulations under that section. Ez 1040 e-file Income From Controlled Organizations The exclusions for interest, annuities, royalties, and rents, explained earlier in this chapter under Income, may not apply to a payment of these items received by a controlling organization from its controlled organization. Ez 1040 e-file The payment is included in the controlling organization's unrelated business taxable income to the extent it reduced the net unrelated income (or increased the net unrelated loss) of the controlled organization. Ez 1040 e-file All deductions of the controlling organization directly connected with the amount included in its unrelated business taxable income are allowed. Ez 1040 e-file Excess qualifying specified payments. Ez 1040 e-file   Excess qualifying specified payments received or accrued from a controlled entity are included in a controlling exempt organization's unrelated business taxable income only on the amount that exceeds that which would have been paid or accrued if the payments had been determined under section 482. Ez 1040 e-file Qualifying specified payments means any payments of interest, annuities, royalties, or rents received or accrued from the controlled organization pursuant to a binding written contract in effect on August 17, 2006, or to a contract which is a renewal, under substantially similar terms of a binding written contract in effect on August 17, 2006, and the payments are received or accrued before January 1, 2012. Ez 1040 e-file   If a controlled participant is not required to file a U. Ez 1040 e-file S. Ez 1040 e-file income tax return, the participant must ensure that the copy or copies of the Regulations section 1. Ez 1040 e-file 482-7 Cost Sharing Arrangement Statement and any updates are attached to Schedule M of any Form 5471, Information Return of U. Ez 1040 e-file S. Ez 1040 e-file Persons With Respect To Certain Foreign Corporations, any Form 5472, Information Return of a 25% Foreign-Owned U. Ez 1040 e-file S. Ez 1040 e-file Corporation or a Foreign Corporation Engaged in a U. Ez 1040 e-file S. Ez 1040 e-file Trade or Business, or any Form 8865, Return of U. Ez 1040 e-file S. Ez 1040 e-file Persons With Respect to Certain Foreign Partnerships, filed for that participant. Ez 1040 e-file Addition to tax for valuation misstatements. Ez 1040 e-file   Under section 512(b)(13)(E)(ii), the tax imposed on a controlling organization will be increased by 20 percent of the excess qualifying specified payments that are determined with or without any amendments or supplements, whichever is larger. Ez 1040 e-file See section 512(b)(13)(E)(ii) for more information. Ez 1040 e-file Net unrelated income. Ez 1040 e-file   This is: For an exempt organization, its unrelated business taxable income, or For a nonexempt organization, the part of its taxable income that would be unrelated business taxable income if it were exempt and had the same exempt purposes as the controlling organization. Ez 1040 e-file Net unrelated loss. Ez 1040 e-file   This is: For an exempt organization, its NOL, or For a nonexempt organization, the part of its NOL that would be its NOL if it were exempt and had the same exempt purposes as the controlling organization. Ez 1040 e-file Control. Ez 1040 e-file   An organization is controlled if: For a corporation, the controlling organization owns (by vote or value) more than 50% of the stock, For a partnership, the controlling organization owns more than 50% of the profits or capital interests, or For any other organization, the controlling organization owns more than 50% of the beneficial interest. Ez 1040 e-file For this purpose, constructive ownership of stock (determined under section 318) or other interests is taken into account. Ez 1040 e-file   As a result, an exempt parent organization is treated as controlling any subsidiary in which it holds more than 50% of the voting power or value, whether directly (as in the case of a first-tier subsidiary) or indirectly (as in the case of a second-tier subsidiary). Ez 1040 e-file Income from property financed with qualified 501(c)(3) bonds. Ez 1040 e-file If any part of a 501(c)(3) organization's property financed with qualified 501(c)(3) bonds is used in a trade or business of any person other than a section 501(c)(3) organization or a governmental unit, and such use is not consistent with the requirements for qualified 501(c)(3) bonds under section 145, the section 501(c)(3) organization is considered to have received unrelated business income in the amount of the greater of the actual rental income or the fair rental value of the property for the period it is used. Ez 1040 e-file No deduction is allowed for interest on the private activity bond. Ez 1040 e-file See sections 150(b)(3) and (c) for more information. Ez 1040 e-file Disposition of property received from taxable subsidiary and used in unrelated business. Ez 1040 e-file A taxable 80%-owned subsidiary corporation of one or more tax-exempt entities is generally subject to tax on a distribution in liquidation of its assets to its exempt parent (or parents). Ez 1040 e-file The assets are treated as if sold at fair market value. Ez 1040 e-file Tax-exempt entities include organizations described in sections 501(a), 529, and 115, charitable remainder trusts, U. Ez 1040 e-file S. Ez 1040 e-file and foreign governments, Indian tribal governments, international organizations, and similar non-taxable organizations. Ez 1040 e-file A taxable corporation that transfers substantially all of its assets to a tax-exempt entity in a transaction that otherwise qualifies for nonrecognition treatment must recognize gain on the transaction as if it sold the assets at fair market value. Ez 1040 e-file However, such a transfer is not taxable if it qualifies as a like-kind exchange under section 1031 or an involuntary conversion under section 1033. Ez 1040 e-file In such a case the built-in appreciation is preserved in the replacement property received in the transaction. Ez 1040 e-file A corporation that changes status from taxable to tax-exempt is treated generally as if it transferred all of its assets to a tax-exempt entity immediately before the change in status (thus subjecting it to the tax on a deemed sale for fair market value). Ez 1040 e-file This rule does not apply where the taxable corporation becomes exempt within 3 years of formation, or had previously been exempt and within several years (generally a period of 3 years) regains exemption, unless the principal purpose of the transactions is to avoid the tax on the change in status. Ez 1040 e-file In the transactions described above, the taxable event is deferred for property that the tax-exempt entity immediately uses in an unrelated business. Ez 1040 e-file If the parent later disposes of the property, then any gain (not in excess of the amount not recognized) is included in the parent's unrelated business taxable income. Ez 1040 e-file If there is partial use of the assets in unrelated business, then there is partial recognition of gain or loss. Ez 1040 e-file Property is treated as disposed if the tax-exempt entity no longer uses it in an unrelated business. Ez 1040 e-file Losses on the transfer of assets to a tax-exempt entity are disallowed if part of a plan with a principal purpose of recognizing losses. Ez 1040 e-file Income From Debt-Financed Property Investment income that would otherwise be excluded from an exempt organization's unrelated business taxable income (see Exclusions under Income earlier) must be included to the extent it is derived from debt-financed property. Ez 1040 e-file The amount of income included is proportionate to the debt on the property. Ez 1040 e-file Debt-Financed Property In general, the term “debt-financed property” means any property held to produce income (including gain from its disposition) for which there is an acquisition indebtedness at any time during the tax year (or during the 12-month period before the date of the property's disposal, if it was disposed of during the tax year). Ez 1040 e-file It includes rental real estate, tangible personal property, and corporate stock. Ez 1040 e-file Acquisition Indebtedness For any debt-financed property, acquisition indebtedness is the unpaid amount of debt incurred by an organization: When acquiring or improving the property, Before acquiring or improving the property if the debt would not have been incurred except for the acquisition or improvement, and After acquiring or improving the property if: The debt would not have been incurred except for the acquisition or improvement, and Incurring the debt was reasonably foreseeable when the property was acquired or improved. Ez 1040 e-file The facts and circumstances of each situation determine whether incurring a debt was reasonably foreseeable. Ez 1040 e-file That an organization may not have foreseen the need to incur a debt before acquiring or improving the property does not necessarily mean that incurring the debt later was not reasonably foreseeable. Ez 1040 e-file Example 1. Ez 1040 e-file Y, an exempt scientific organization, mortgages its laboratory to replace working capital used in remodeling an office building that Y rents to an insurance company for nonexempt purposes. Ez 1040 e-file The debt is acquisition indebtedness since the debt, though incurred after the improvement of the office building, would not have been incurred without the improvement, and the debt was reasonably foreseeable when, to make the improvement, Y reduced its working capital below the amount necessary to continue current operations. Ez 1040 e-file Example 2. Ez 1040 e-file X, an exempt organization, forms a partnership with A and B. Ez 1040 e-file The partnership agreement provides that all three partners will share equally in the profits of the partnership, each will invest $3 million, and X will be a limited partner. Ez 1040 e-file X invests $1 million of its own funds in the partnership and $2 million of borrowed funds. Ez 1040 e-file The partnership buys as its sole asset an office building that it leases to the public for nonexempt purposes. Ez 1040 e-file The office building costs the partnership $24 million, of which $15 million is borrowed from Y bank. Ez 1040 e-file The loan is secured by a mortgage on the entire office building. Ez 1040 e-file By agreement with Y bank, X is not personally liable for payment of the mortgage. Ez 1040 e-file X has acquisition indebtedness of $7 million. Ez 1040 e-file This amount is the $2 million debt X incurred in acquiring the partnership interest, plus the $5 million that is X's allocable part of the partnership's debt incurred to buy the office building (one-third of $15 million). Ez 1040 e-file Example 3. Ez 1040 e-file A labor union advanced funds, from existing resources and without any borrowing, to its tax-exempt subsidiary title-holding company. Ez 1040 e-file The subsidiary used the funds to pay a debt owed to a third party that was previously incurred in acquiring two income-producing office buildings. Ez 1040 e-file Neither the union nor the subsidiary has incurred any further debt in acquiring or improving the property. Ez 1040 e-file The union has no outstanding debt on the property. Ez 1040 e-file The subsidiary's debt to the union is represented by a demand note on which the subsidiary makes payments whenever it has the available cash. Ez 1040 e-file The books of the union and the subsidiary list the outstanding debt as interorganizational indebtedness. Ez 1040 e-file Although the subsidiary's books show a debt to the union, it is not the type subject to the debt-financed property rules. Ez 1040 e-file In this situation, the very nature of the title-holding company and the parent-subsidiary relationship shows this debt to be merely a matter of accounting between the two organizations. Ez 1040 e-file Accordingly, the debt is not acquisition indebtedness. Ez 1040 e-file Change in use of property. Ez 1040 e-file   If an organization converts property that is not debt-financed property to a use that results in its treatment as debt-financed property, the outstanding principal debt on the property is thereafter treated as acquisition indebtedness. Ez 1040 e-file Example. Ez 1040 e-file Four years ago a university borrowed funds to acquire an apartment building as housing for married students. Ez 1040 e-file Last year, the university rented the apartment building to the public for nonexempt purposes. Ez 1040 e-file The outstanding principal debt becomes acquisition indebtedness as of the time the building was first rented to the public. Ez 1040 e-file Continued debt. Ez 1040 e-file   If an organization sells property and, without paying off debt that would be acquisition indebtedness if the property were debt-financed property, buys property that is otherwise debt-financed property, the unpaid debt is acquisition indebtedness for the new property. Ez 1040 e-file This is true even if the original property was not debt-financed property. Ez 1040 e-file Example. Ez 1040 e-file To house its administration offices, an exempt organization bought a building using $600,000 of its own funds and $400,000 of borrowed funds secured by a pledge of its securities. Ez 1040 e-file The office building was not debt-financed property. Ez 1040 e-file The organization later sold the building for $1 million without repaying the $400,000 loan. Ez 1040 e-file It used the sale proceeds to buy an apartment building it rents to the general public. Ez 1040 e-file The unpaid debt of $400,000 is acquisition indebtedness with respect to the apartment building. Ez 1040 e-file Property acquired subject to mortgage or lien. Ez 1040 e-file   If property (other than certain gifts, bequests, and devises) is acquired subject to a mortgage, the outstanding principal debt secured by that mortgage is treated as acquisition indebtedness even if the organization did not assume or agree to pay the debt. Ez 1040 e-file Example. Ez 1040 e-file An exempt organization paid $50,000 for real property valued at $150,000 and subject to a $100,000 mortgage. Ez 1040 e-file The $100,000 of outstanding principal debt is acquisition indebtedness, as though the organization had borrowed $100,000 to buy the property. Ez 1040 e-file Liens similar to a mortgage. Ez 1040 e-file   In determining acquisition indebtedness, a lien similar to a mortgage is treated as a mortgage. Ez 1040 e-file A lien is similar to a mortgage if title to property is encumbered by the lien for a creditor's benefit. Ez 1040 e-file However, when state law provides that a lien for taxes or assessments attaches to property before the taxes or assessments become due and payable, the lien is not treated as a mortgage until after the taxes or assessments have become due and payable and the organization has had an opportunity to pay the lien in accordance with state law. Ez 1040 e-file Liens similar to mortgages include (but are not limited to): Deeds of trust, Conditional sales contracts, Chattel mortgages, Security interests under the Uniform Commercial Code, Pledges, Agreements to hold title in escrow, and Liens for taxes or assessments (other than those discussed earlier in this paragraph). Ez 1040 e-file Exception for property acquired by gift, bequest, or devise. Ez 1040 e-file   If property subject to a mortgage is acquired by gift, bequest, or devise, the outstanding principal debt secured by the mortgage is not treated as acquisition indebtedness during the 10-year period following the date the organization receives the property. Ez 1040 e-file However, this applies to a gift of property only if:    The mortgage was placed on the property more than 5 years before the date the organization received it, and The donor held the property for more than 5 years before the date the organization received it. Ez 1040 e-file   This exception does not apply if an organization assumes and agrees to pay all or part of the debt secured by the mortgage or makes any payment for the equity in the property owned by the donor or decedent (other than a payment under an annuity obligation excluded from the definition of acquisition indebtedness, discussed under Debt That Is Not Acquisition Indebtedness, later). Ez 1040 e-file   Whether an organization has assumed and agreed to pay all or part of a debt in order to acquire the property is determined by the facts and circumstances of each situation. Ez 1040 e-file Modifying existing debt. Ez 1040 e-file   Extending, renewing, or refinancing an existing debt is considered a continuation of that debt to the extent its outstanding principal does not increase. Ez 1040 e-file When the principal of the modified debt is more than the outstanding principal of the old debt, the excess is treated as a separate debt. Ez 1040 e-file Extension or renewal. Ez 1040 e-file   In general, any modification or substitution of the terms of a debt by an organization is considered an extension or renewal of the original debt, rather than the start of a new one, to the extent that the outstanding principal of the debt does not increase. Ez 1040 e-file   The following are examples of acts resulting in the extension or renewal of a debt: Substituting liens to secure the debt, Substituting obligees whether or not with the organization's consent, Renewing, extending, or accelerating the payment terms of the debt, and Adding, deleting, or substituting sureties or other primary or secondary obligors. Ez 1040 e-file Debt increase. Ez 1040 e-file   If the outstanding principal of a modified debt is more than that of the unmodified debt, and only part of the refinanced debt is acquisition indebtedness, the payments on the refinanced debt must be allocated between the old debt and the excess. Ez 1040 e-file Example. Ez 1040 e-file An organization has an outstanding principal debt of $500,000 that is treated as acquisition indebtedness. Ez 1040 e-file The organization borrows another $100,000, which is not acquisition indebtedness, from the same lender, resulting in a $600,000 note for the total obligation. Ez 1040 e-file A payment of $60,000 on the total obligation would reduce the acquisition indebtedness by $50,000 ($60,000 x $500,000/$600,000) and the excess debt by $10,000. Ez 1040 e-file Debt That Is Not Acquisition Indebtedness Certain debt and obligations are not acquisition indebtedness. Ez 1040 e-file These include the following. Ez 1040 e-file Debts incurred in performing an exempt purpose. Ez 1040 e-file Annuity obligations. Ez 1040 e-file Securities loans. Ez 1040 e-file Real property debts of qualified organizations. Ez 1040 e-file Certain Federal financing. Ez 1040 e-file Debt incurred in performing exempt purpose. Ez 1040 e-file   A debt incurred in performing an exempt purpose is not acquisition indebtedness. Ez 1040 e-file For example, acquisition indebtedness does not include the debt an exempt credit union incurs in accepting deposits from its members or the debt an exempt organization incurs in accepting payments from its members to provide them with insurance, retirement, or other benefits. Ez 1040 e-file Annuity obligation. Ez 1040 e-file   The organization's obligation to pay an annuity is not acquisition indebtedness if the annuity meets all the following requirements. Ez 1040 e-file It must be the sole consideration (other than a mortgage on property acquired by gift, bequest, or devise that meets the exception discussed under Property acquired subject to mortgage or lien, earlier in this chapter) issued in exchange for the property received. Ez 1040 e-file Its present value, at the time of exchange, must be less than 90% of the value of the prior owner's equity in the property received. Ez 1040 e-file It must be payable over the lives of either one or two individuals living when issued. Ez 1040 e-file It must be payable under a contract that: Does not guarantee a minimum nor specify a maximum number of payments, and Does not provide for any adjustment of the amount of the annuity payments based on the income received from the transferred property or any other property. Ez 1040 e-file Example. Ez 1040 e-file X, an exempt organization, receives property valued at $100,000 from donor A, a male age 60. Ez 1040 e-file In return X promises to pay A $6,000 a year for the rest of A's life, with neither a minimum nor maximum number of payments specified. Ez 1040 e-file The amounts paid under the annuity are not dependent on the income derived from the property transferred to X. Ez 1040 e-file The present value of this annuity is $81,156, determined from IRS valuation tables. Ez 1040 e-file Since the value of the annuity is less than 90 percent of A's $100,000 equity in the property transferred and the annuity meets all the other requirements just discussed, the obligation to make annuity payments is not acquisition indebtedness. Ez 1040 e-file Securities loans. Ez 1040 e-file   Acquisition indebtedness does not include an obligation of the exempt organization to return collateral security provided by the borrower of the exempt organization's securities under a securities loan agreement (discussed under Exclusions earlier in this chapter). Ez 1040 e-file This transaction is not treated as the borrowing by the exempt organization of the collateral furnished by the borrower (usually a broker) of the securities. Ez 1040 e-file   However, if the exempt organization incurred debt to buy the loaned securities, any income from the securities (including income from
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Tax Relief for Victims of Hurricane Irene in New Jersey

E-file to Remain Open for Hurricane Irene Victims through Oct. 31

Updated 9/7/11 to add the following counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Salem, Sussex, Union and Warren.

NJ-2011-42, Sept. 1, 2011

MOUNTAINSIDE, N.J. — Victims of Hurricane Irene that began on Aug. 27, 2011 in parts of New Jersey may qualify for tax relief from the Internal Revenue Service.

The President has declared the following counties a federal disaster area: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Aug. 27, and on or before Oct. 31, have been postponed to Oct. 31, 2011. This includes corporations and other businesses that previously obtained an extension until Sept. 15 to file their 2010 returns, and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter, normally due Sept. 15.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Aug. 27, and on or before Sept. 12, as long as the deposits are made by Sept. 12, 2011.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request this tax relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Oct. 31 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Aug. 27 and on or before Oct. 31.

The IRS also gives affected taxpayers until Oct. 31 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Aug. 27 and on or before Oct. 31.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Aug. 27 and on or before Sept. 12 provided the taxpayer makes these deposits by Sept. 12.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.
Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New Jersey/Hurricane Irene” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040.

Related Information

Page Last Reviewed or Updated: 24-Mar-2014

The Ez 1040 E-file

Ez 1040 e-file 5. Ez 1040 e-file   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Ez 1040 e-file You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. Ez 1040 e-file By selecting the method that is best for you, you will have quick and easy access to tax help. Ez 1040 e-file Free help with your tax return. Ez 1040 e-file   You can get free help preparing your return nationwide from IRS-certified volunteers. Ez 1040 e-file The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Ez 1040 e-file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Ez 1040 e-file Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Ez 1040 e-file In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Ez 1040 e-file To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Ez 1040 e-file gov, download the IRS2Go app, or call 1-800-906-9887. Ez 1040 e-file   As part of the TCE program, AARP offers the Tax-Aide counseling program. Ez 1040 e-file To find the nearest AARP Tax-Aide site, visit AARP's website at www. Ez 1040 e-file aarp. Ez 1040 e-file org/money/taxaide or call 1-888-227-7669. Ez 1040 e-file For more information on these programs, go to IRS. Ez 1040 e-file gov and enter “VITA” in the search box. Ez 1040 e-file Internet. Ez 1040 e-file    IRS. Ez 1040 e-file gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Ez 1040 e-file Download the free IRS2Go app from the iTunes app store or from Google Play. Ez 1040 e-file Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Ez 1040 e-file Check the status of your 2013 refund with the Where's My Refund? application on IRS. Ez 1040 e-file gov or download the IRS2Go app and select the Refund Status option. Ez 1040 e-file The IRS issues more than 9 out of 10 refunds in less than 21 days. Ez 1040 e-file Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Ez 1040 e-file You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Ez 1040 e-file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Ez 1040 e-file Use the Interactive Tax Assistant (ITA) to research your tax questions. Ez 1040 e-file No need to wait on the phone or stand in line. Ez 1040 e-file The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Ez 1040 e-file When you reach the response screen, you can print the entire interview and the final response for your records. Ez 1040 e-file New subject areas are added on a regular basis. Ez 1040 e-file  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Ez 1040 e-file gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Ez 1040 e-file You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Ez 1040 e-file The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Ez 1040 e-file When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Ez 1040 e-file Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Ez 1040 e-file You can also ask the IRS to mail a return or an account transcript to you. Ez 1040 e-file Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Ez 1040 e-file gov or by calling 1-800-908-9946. Ez 1040 e-file Tax return and tax account transcripts are generally available for the current year and the past three years. Ez 1040 e-file Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Ez 1040 e-file Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Ez 1040 e-file If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Ez 1040 e-file Check the status of your amended return using Where's My Amended Return? Go to IRS. Ez 1040 e-file gov and enter Where's My Amended Return? in the search box. Ez 1040 e-file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Ez 1040 e-file It can take up to 3 weeks from the date you mailed it to show up in our system. Ez 1040 e-file Make a payment using one of several safe and convenient electronic payment options available on IRS. Ez 1040 e-file gov. Ez 1040 e-file Select the Payment tab on the front page of IRS. Ez 1040 e-file gov for more information. Ez 1040 e-file Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Ez 1040 e-file Figure your income tax withholding with the IRS Withholding Calculator on IRS. Ez 1040 e-file gov. Ez 1040 e-file Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Ez 1040 e-file Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Ez 1040 e-file gov. Ez 1040 e-file Request an Electronic Filing PIN by going to IRS. Ez 1040 e-file gov and entering Electronic Filing PIN in the search box. Ez 1040 e-file Download forms, instructions and publications, including accessible versions for people with disabilities. Ez 1040 e-file Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Ez 1040 e-file gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Ez 1040 e-file An employee can answer questions about your tax account or help you set up a payment plan. Ez 1040 e-file Before you visit, check the Office Locator on IRS. Ez 1040 e-file gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Ez 1040 e-file If you have a special need, such as a disability, you can request an appointment. Ez 1040 e-file Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Ez 1040 e-file Apply for an Employer Identification Number (EIN). Ez 1040 e-file Go to IRS. Ez 1040 e-file gov and enter Apply for an EIN in the search box. Ez 1040 e-file Read the Internal Revenue Code, regulations, or other official guidance. Ez 1040 e-file Read Internal Revenue Bulletins. Ez 1040 e-file Sign up to receive local and national tax news and more by email. Ez 1040 e-file Just click on “subscriptions” above the search box on IRS. Ez 1040 e-file gov and choose from a variety of options. Ez 1040 e-file Phone. Ez 1040 e-file    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Ez 1040 e-file Download the free IRS2Go app from the iTunes app store or from Google Play. Ez 1040 e-file Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Ez 1040 e-file gov, or download the IRS2Go app. Ez 1040 e-file Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Ez 1040 e-file The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Ez 1040 e-file Most VITA and TCE sites offer free electronic filing. Ez 1040 e-file Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Ez 1040 e-file Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Ez 1040 e-file Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Ez 1040 e-file If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Ez 1040 e-file The IRS issues more than 9 out of 10 refunds in less than 21 days. Ez 1040 e-file Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Ez 1040 e-file Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Ez 1040 e-file The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Ez 1040 e-file Note, the above information is for our automated hotline. Ez 1040 e-file Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Ez 1040 e-file Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Ez 1040 e-file You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Ez 1040 e-file It can take up to 3 weeks from the date you mailed it to show up in our system. Ez 1040 e-file Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Ez 1040 e-file You should receive your order within 10 business days. Ez 1040 e-file Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Ez 1040 e-file If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Ez 1040 e-file Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Ez 1040 e-file The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Ez 1040 e-file These individuals can also contact the IRS through relay services such as the Federal Relay Service. Ez 1040 e-file Mail. Ez 1040 e-file   You can send your order for forms, instructions, and publications to the address below. Ez 1040 e-file You should receive a response within 10 business days after your request is received. Ez 1040 e-file Internal Revenue Service 1201 N. Ez 1040 e-file Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Ez 1040 e-file The Taxpayer Advocate Service (TAS) is your voice at the IRS. Ez 1040 e-file Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Ez 1040 e-file   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Ez 1040 e-file We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Ez 1040 e-file You face (or your business is facing) an immediate threat of adverse action. Ez 1040 e-file You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Ez 1040 e-file   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Ez 1040 e-file Here's why we can help: TAS is an independent organization within the IRS. Ez 1040 e-file Our advocates know how to work with the IRS. Ez 1040 e-file Our services are free and tailored to meet your needs. Ez 1040 e-file We have offices in every state, the District of Columbia, and Puerto Rico. Ez 1040 e-file   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Ez 1040 e-file irs. Ez 1040 e-file gov/Advocate, or call us toll-free at 1-877-777-4778. Ez 1040 e-file   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Ez 1040 e-file If you know of one of these broad issues, please report it to us through our Systemic Advisory Management System at www. Ez 1040 e-file irs. Ez 1040 e-file gov/Advocate/Systemic-Advocacy-Management-System-SAMS. Ez 1040 e-file Low Income Taxpayer Clinics. Ez 1040 e-file    Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Ez 1040 e-file Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Ez 1040 e-file Visit www. Ez 1040 e-file irs. Ez 1040 e-file gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Ez 1040 e-file Prev  Up  Next   Home   More Online Publications